More and more companies are using chatbots – and it is becoming harder to tell the difference between chatbots and people. But what is a chatbot? What does the future hold? And how many jobs will they threaten?

By Mark Richards.

When I started researching today’s article the first thing I came across was a BBC piece from 2011. It asked what was then a very fashionable question: ‘Are call centres the factories of the 21st Century?’

According to the 2011 article:

…Only 8% of jobs are now in the manufacturing sector, according to the Office for National Statistics. At the same time the rise of the call centre – known in the industry as contact centres – has seemed unstoppable. More people have worked in call centres than ever worked in the mining industry and now over one million people are employed in contact centres.

That was 2011 – before we even started getting bombarded with PPI calls… So what is the situation now?

There are currently around 6,200 customer service centres in the UK, employing over 1.3m people (equivalent to roughly 4% of the UK’s workforce). The finance sector claims the largest share of that employing around 230,000 people with – whatever you might think – the percentage of outbound sales calls declining steadily over the past ten years.

Go back two years and the call centre industry was optimistic, with ContactBabel’s report on the industry saying that “contact centres will evolve to become one of the UK’s most important sectors in coming years.”

But now that may all be about to change, as more and more companies and organisations use chatbots – and as it becomes harder to tell whether you are speaking to a chatbot or a real person.

What is a chatbot?

A chatbot – also known as a talkbot or chatterbot – is a computer programme or artificial intelligence application which conducts a conversation via audio or text. The aim of a chatbot is to convincingly simulate how a human being would behave in a conversation and – as most people know – are typically used for customer service and/or supplying information.

The original chatbots mostly relied on keywords within the question being asked, and then offered a reply with the most matching keywords – or similar word pattern – from a pre-populated database.

Increasingly, though, they are using sophisticated natural language processing systems, bringing them much closer to ‘real’ human interaction – and therein lies the threat to thousands of jobs.

How long have they been around?

As always with a technological subject, the answer is, ‘a lot longer than you think.’ The term was first coined in 1994 – inevitably in the US – and the first chatterbot was called Julia.

Today most chatbots are accessed via virtual assistants such as Google Assistant or Amazon’s Alexa, via messaging apps, or the websites and apps of companies and organisations.

What about the future?

Earlier this year there was the annual Google developer conference/jamboree in California. On show was Google’s virtual assistant software which – worryingly – is now so fluent that it can make calls and hold conversations without the listener realising it is not human. Here is the link, decide for yourself…

Whether you are convinced by the Google assistant or not it is clearly a huge leap forward from the voice synthesis we have had so far. We have all watched YouTube videos narrated by a synthesised voice and it is very clear that it is not a human voice.

With the natural speech patterns of the Google assistant, allied to increasingly sophisticated artificial intelligence, the writing must be on the wall for thousands of call centre jobs.

Is it good news for the UK economy?

Business woman is in correspondence with a chatbot.

Clearly not. Although the average salary in call centres may be low – industry estimates put it at around £23,600 which is about £8,000 below the national average – an industry which accounts for 4% of the UK workforce is clearly important.

We got a glimpse into the future earlier this year when Virgin Media announced that it would be closing its call centre in Swansea, which currently employs 800 people. The local MP protested that the much of the economy of the town – especially for young people – was reliant on the call centre industry, something in which Swansea is not alone.

Current estimates are that around 46,000 jobs will go before 2021, with the finance sector being particularly badly hit. The utility companies could also be affected as brands such as Lumo offer cheaper gas and electricity deals to a customer willing to manage their energy account via an app – and almost certainly get any information they need from a chatbot.

A recent study in the US showed that the use of chatbots decreased the cost of dealing with customers’ queries from an average of $15-20 per query to just a dollar. No business is going to reject that type of potential saving and, according to this infographic, more and more businesses are planning to build and use them. To use banking as an example, at the moment around 20% of customer interactions with a chatbot are deemed to be successful (that is, no human intervention is required). By 2022 as chatbots continue to improve, it is expected that the ‘success rate’ will have risen to 80%.

What will chatbots be able to do in the future?

Space only permits three predictions, and I had better start with the bad news. Chatbots are going to become expert marketers. Their ability to pick up on keywords as you text or instant message – and AI’s ability to cross-reference that with your previous purchasing history (think Amazon’s ‘customers who bought this also bought X’ here…) is going to lead to very personal and specifically targeted marketing messages.

Secondly, the pace of development of chatbots will accelerate rapidly, with Facebook now allowing third-party developers to build chatbots within their messenger platform. Within 10 years chatbots will be indistinguishable from humans – so they will not only be supplying you with information, they will be presenting podcasts and radio shows as well.

Lastly – but obviously most importantly, a chatbot will be able to order a pizza for you. Just tell the virtual assistant on your phone you would like a double meat feast from Domino’s and it will phone them for you. It may even speak to Domino’s chatbot to place the order. And your pizza could be delivered by a drone. Humans – who needs ’em?