A bot is any software that performs an automated task; however we are interested in the class of bots that live online in chat platforms or on social media called chatbots. Chatbot is a programme which communicates to user through messaging interface. It is a virtual user that simulates a conversation with another human. There need not be any programmes coded for using chatbots.

There are different platforms where we can make use of chatbots: Messenger, Skype, Wechat and Telegram.

How Amazon Chatbot works:

With an increase in the ease of online shopping, people are facing issues which come along with it. To always make a call to customer service and reporting problem to them is another burdensome process.

At last companies like Amazon are beginning to realize the damaging effects a phrase (“Your Call Is Important to Us”) like this can have on their brand. Hence the retail giant appears to be building its chatbots. Now we can directly chat on our issues with the customer service in the app itself. This trend is beneficial because it can be used to drive sales through customer interaction and because it streamlines customer relationship management (CRM).We can directly type our query and we instantly get a response  which saves useful time of people.

How Chatbot Work ???

There are two types of chatbot, one functions based on a set of rules, and the other more advanced version uses machine learning.

Chatbot that functions based on rules:

  • This bot is very very limited. It can only respond to very specific commands. If you say the wrong thing, it doesn’t know what you mean.
  • This bot is only as smart as it is programmed to be.

Chatbot that functions using machine learning:

  • This bot has an artificial brain AKA artificial intelligence. People don’t have to be ridiculously specific when you are talking to it. It understands language, not just commands.
  • This bot continuously gets smarter as it learns from conversations it has with people.

Banking Chatbot:

Today’s companies are racing towards AI  to make it a big part of their digital strategy, particularly in banking sector, it is changing the phase of communication interface between banking personals and customers in an effective way by adopting Artificial Intelligence.

Banking firms must engage with their customers in the right way, and at the right place and time. A good integration of chatbots as part of the engagement process can provide customers with quick and personalized interactions, using machine learning and artificial intelligence as a foundation.

There are many reasons to use a chatbot for customer engagement in banking.

  • Cost savings. Chatbots are relatively inexpensive to develop and maintain compared to the human equivalent.
  • Ease of use. Chatbots are easier to use than a traditional banking app.
  • Conversational interface. Customers are looking for speed and personalization when interacting with their financial institution. At the same time, they don’t want the impersonal experience of email or online forms.
  • Financial advice. It can track spending habits, provide credit scores, set and manage budgets and tell the consumer where they are spending their money, for better money management.
  • 24/7 digital support. A 24/7 instant chat feature is expected by the increasingly digital ‘always-on’ consumer.

Limitations of Chatbots:

  • The dialogue capability can be limited to very a very specific set or format of questions that are established by the chatbot development team. This limitation is quickly diminishing as the technology is being tested and implemented.
  • Chatbots have significant limitations based on accents and languages. For organizations in multi-lingual regions, this limitation becomes a more significant barrier.
  • Chatbots cannot hold the conversation which means it cannot answer multiple question at the same time.
  • Not all consumers are familiar with or comfortable with chatbots because their limited understanding.
  •  The expansion of chatbot capabilities is limited by the ability to hire trained teams or partner with organizations familiar with this rather new technology.

Banks in India using chatbots:


SBI, which is India’s largest public-sector bank with 420 million customers, is embarking on its AI journey from the point of view of both employees and customers. SBI has launched SIA, an AI-powered chat assistant that addresses customer enquiries instantly and helps them with everyday banking tasks just like a bank representative. Since its launch, the chatbot has responded to millions of queries from thousands of customers. SIA is setup to handle nearly 10,000 enquiries per second or 864 million in a day. That is nearly 25% of the queries processed by Google every day. Deployment of this size is arguably the first of its kind in India and even across the world. SBI claims that SIA continuously learns with each interaction and gets better over time. Currently, SIA can address enquiries on banking products and services. It is trained with a large set of past customer questions and is said to aptly handle frequently asked questions.


HDFC Bank has developed an AI-based chatbot Eva.Since its launch in March this year, Eva (which stands Electronic Virtual Assistant) has addressed over 2.7 million customer queries, interacted with over 530,000 unique users, and held 1.2 million conversations.Eva can assimilate knowledge from thousands of sources and provide simple answers in less than 0.4 seconds. With the launch of Eva, the bank’s customers can get information on its products and services instantaneously. It removes the need to search, browse or call. Eva also becomes smarter as it learns through its customer interactions. Eva would be able to handle real banking transactions as well, which would enable HDFC Bank to offer the true power of conversational banking to its customers.


ICICI Bank launched its AI-based chatbot, named iPal. Since its launch, the chatbot has interacted with 3.1 million customers, answering about 6 million queries, with a 90 percent accuracy rate, the bank said.

The services offered by iPal are divided into three broad categories, most of which are mapped to the iMobile app.

Category 1: It involves FAQs, which are simple questions that you may want to ask your bank executive for which there are simple, structured answers. You ask the queries and the bot will give you the correct response, and it learns along the way.

Category 2: It involves financial transactions, wherein you can make fund transfers from person-to-person, pay your bills or recharge your mobile phone bills using queries.

Category 3: It involves helping people discover new features. These are simple how-to tasks such as how to reset your ATM pin, which is a bit more evolved and is like interacting with your bank executive.


Private sector lender Axis Bank  has launched a virtual assistant for customers armed with proprietary artificial intelligence and machine learning algorithms and named it Axis Aha. The chatbot is designed to provide relevant and contextual responses to customer queries and even helps make transactions on the chat window itself. Customers can initiate transactions either through voice or chat. Currently hosted on the home page of the bank website Axis Aha can perform diverse actions like fund transfer, bill payments, recharges and also manage card limits, block credit and debit cards, besides others. The voice and chat interface also provides customers an opportunity to query on any of his banking needs. Axis bank is seeing significant improvement in efficiency, time and cost savings.


Typically, a chat bot will communicate with a real person, but applications are being developed in which two chat bots can communicate with each other. 
In banking, chatbots and virtual assistants are some of the industry’s newest tools designed to simplify the interaction between humans and computers.
They are also used in applications such as eCommerce customer service, call centers and Internet gaming. 
Chatbots automation opportunities are huge, as they can conduct processes by means of the natural language dialogue.

About Rashi Agarwal:
Rashi is B.Sc in Eco hons.  Currently she is working as Analyst Intern with NikhilGuru Consulting Analytics Service LLP (Nikhil Analytics), Bangalore.

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