The terms chatbot, AI chatbot and virtual agent are often used interchangeably, which can cause confusion. While the technologies these terms refer to are closely related, subtle distinctions yield important differences in their respective capabilities.
Chatbot is the most inclusive, catch-all term. Any software simulating human conversation, whether powered by traditional, rigid decision tree-style menu navigation or cutting-edge conversational AI, is a chatbot. Chatbots can be found across nearly any communication channel, from phone trees to social media to specific apps and websites.
AI chatbots are chatbots that employ a variety of AI technologies, from machine learning—comprised of algorithms, features, and data sets—that optimize responses over time, to natural language processing (NLP) and natural language understanding (NLU) that accurately interpret user questions and match them to specific intents. Deep learning capabilities enable AI chatbots to become more accurate over time, which in turn enables humans to interact with AI chatbots in a more natural, free-flowing way without being misunderstood.
Virtual agents are a further evolution of AI chatbot software that not only use conversational AI to conduct dialogue and deep learning to self-improve over time, but often pair those AI technologies with robotic process automation (RPA) in a single interface to act directly upon the user’s intent without further human intervention.
To help illustrate the distinctions, imagine that a user is curious about tomorrow’s weather. With a traditional chatbot, the user can use the specific phrase “tell me the weather forecast.” The chatbot says it will rain. With an AI chatbot, the user can ask, “What’s tomorrow’s weather lookin’ like?” The chatbot, correctly interpreting the question, says it will rain. With a virtual agent, the user can ask, “What’s tomorrow’s weather lookin’ like?”—and the virtual agent not only predicts tomorrow’s rain, but also offers to set an earlier alarm to account for rain delays in the morning commute.