Her Majesty’s Revenue & Customs (HMRC), the UK government department responsible for tax collection, has seen the number of interactions with its chatbot service surge from just under 200,000 in the financial year just before the pandemic hit (FY 19/20), to nearly 2.5 million in the year that followed, FY 20/21 – a total rise of 1,150 per cent.
This is according to Freedom of Information (FOI) act research conducted by a Parliament Street think tank. The data revealed that in the most recent financial year, chatbot interaction had cooled slightly, but was still significantly higher than pre-pandemic levels, at 846,937. This represents a total of 3,275,046 separate chatbot interactions since the start of covid-19.
Parliament Street researchers and third party experts concluded that the significant uptick in chatbot interactions was a result of covid-19 and lockdown, where demand for tax relief services and revenue support surged.
This increased demand for digital services was also reflected in HMRC’s recent hike in IT budget. Over the last 12 months alone, over £1billionn (£1,074,700,000) was spent on IT. For comparison, in FY 20/21, HMRC’s tax budget was just over £900million, and in FY 19/20 it was just over £700million.
This represents a total IT budget increase of 54 per cent, from FY 19/20, to the most recent financial year, FY 21/22.
HMRC has been commended for their chatbot system, by implementing separate webchat links for every service on their page, such as VAT, Child Benefit or Income Tax, in an effort to streamline and personalise its customer service efforts throughout the pandemic.
Suvish Viswanathan, head of marketing at Zoho Europe, commented, “Over lockdown, chatbots became part of the solution that helped large organisations deal with the onslaught of online requests that were coming in every day to ease the burden on under-resourced teams and to placate customers with either a simple resolution or to encourage them that the process is underway to deal with their enquiry while they wait for a live customer service agent.
“However, chatbot platforms are still evolving. They can often offer guided conversations and are sometimes unable to understand the purpose of a customer’s complaint or request. Until these kinks are ironed out, it’s essential that businesses looking to provide a positive customer experience do so with a combination of chatbots for basic requests, and have an option to switch to human support at the right time.
“It is also vital for the data gathered to be connected to other systems, such as customer service management tools, to complete a sophisticated and holistic online customer service process. This will play a vital role in ensuring follow-ups can be made methodically and efficiently. It can ensure seamless customer interaction with continued conversations at different parts of their journey with a brand, rather than having to start from scratch each time. The right approach to chatbots drives deeper consumer engagement, reduces waiting times and generally improves customer satisfaction.”
Niall Crosby, CEO, CTO and founder of AG Grid, commented, “When used correctly, chatbots can play a vital role in alleviating organisations of thousands of basic customer services requests. However, the ‘one-size-fits-all’ policy typically associated with chatbots, where it’s impossible to get a human response to a bespoke issue, can lead to frustration and a poor customer experience.
“In this case, it’s positive to see that HMRC have understood the value of investing in its chatbot programme so that it does not fall into this category. Other organisations which are inundated with customer services requests should follow suit, particularly as the demand for digital and on-demand support continues to rise.”