Virtual Agents

We are increasingly seeing a new employee supporting companies’ customer service efforts—virtual agents. You have likely run into them before. They often include those “Let’s talk” or “chat with us” functions on the bottom right corner of a website or the automated voice in phone calls asking you to summarize your problem in a few keywords. You probably find them annoying, yearning for a human customer service representative who can recognize the nuance of your problem. Despite our frustration, these virtual agents are quickly becoming our first point of contact with any organization. So, what are they, exactly?

Virtual agents are, in essence, a software or bot that mimics human actions through automation without needing human involvement. They achieve dialogue, text, or voice, to interact with users through the direction of pre-set rules and data that is fed into the software. The capabilities of virtual agents are thanks to natural language processing (NLP), machine learning, and robotic process automation (RPA). So, their ability to maintain an interaction with humans makes them useful for routine customer service. 

In addition to virtual agents, you may have also heard the term “chatbot.” A chatbot is a subset of a virtual agent describing a computer program that can mimic a text-based conversation in real-time. An example would be Bank of America’s Erica, an AI-powered chatbot designed to assist customers with a range of banking-related services like transaction history inquiries. The interactions are instructed by a set of pre-programmed inputs that lead to a corresponding answer in the flow of a decision tree. Virtual agents are not just extremely sophisticated chatbots. They have the power to understand the intention behind a freeform text or speech from users and automate a response while continuously improving its performance. In a nutshell, chatbots respond while virtual agents comprehend, learn, and perform.

Sometimes, the term “virtual agents” is also mixed up with “virtual assistants.” Virtual assistants are what we describe as digital products like Apple’s Siri or Amazon’s Alexa. Obviously, they aren’t humans providing service remotely.

From your experience with these digital products, you are probably thinking that virtual agents and virtual assistants are the same thing. Yes, they are both self-automated systems that imitate human activity. But on a technicality, a virtual agent works for an enterprise with commercialized systems.¹ So, while Siri or Alexa functions as a personal assistant on your device, a true virtual agent functions as a business assistant, automating services for customers and employees. But for this article, we are going to talk about all types of virtual agents, including virtual assistants.

Here is a table summarizing the different tasks they complete:

Virtual agent technology is powered by a mix of natural language processing, robotic process automation (RPA), and intelligent search. But more recently, AI technology and machine learning have been incorporated into virtual agent technology. Integrating machine learning with virtual agent technology opened an avenue for virtual agents to continuously grow and improve their understanding of human language. We have since passed the era of scripted responses and have stepped into a time in technology where unpredicted human queries can be analyzed and genuine responses can be provided.

Advances in AI technology make virtual agents capable of responding to a wider range of requests compared to traditional virtual agents. It is especially thanks to natural language processing technology that AI virtual agents can analyze any form of text or speech with greater accuracy. Interactions with traditional chatbots, on the other hand, are limited to a predetermined set of rules and predefined terms. This makes conversations with AI agents seem natural and feel almost as though you are speaking to a human.

Given just how powerful virtual agents are nowadays, it makes sense that businesses opt to use them to support and enhance their operations. Virtual agents come in types and can be customized based on the business’s specific needs and the resources available to maintain them. For example, a company can combine virtual agents with their customer service department as an integrated solution to address long waiting times for a human agent. Or, a company can use a virtual agent in the onboarding of new hires as an end-to-end solution to address the shortage of available trainers.