The benefits of implementing RPA in finance RPA bots: Unattended vs. attended vs. hybrid

virtual agent

A virtual agent (sometimes called an intelligent virtual agent (IVA), virtual rep or chatbot) is a software program that uses scripted rules and, increasingly, artificial intelligence applications to provide automated service or guidance to humans.

Virtual agents are most commonly used by organizations in their customer service functions to answer routine customer queries, fulfill standard requests and/or handle simple problems. For example, virtual agents are often used for initial customer interactions with call centers or click-to-chat features on websites.

Virtual agents are also used in some organizations to handle employee-driven needs. For example, virtual agents are commonly deployed within the IT function to provide help desk-type services, such as employee requests for resetting computer passwords. They can also be used in organizations to guide employees through work tasks or processes.

In this way, a virtual agent is akin to a digital assistant, an application program that understands natural language voice commands and is also deployed to fulfill people's needs or help them complete tasks.

Technology research and advisory firm Gartner predicted that 25% of customer service and support operations will use virtual assistants across their engagement channels in 2020, up from less than 2% in 2017. In addition, 25% of digital workers will use virtual assistants in their tasks on a daily basis by 2021, compared with less than 2% in 2019, according to Gartner.

Virtual agent vs. virtual assistant

The terms virtual agent and virtual assistant are often used interchangeably with each other, as well as with the term "chatbot." Although all three are types of computerized aid offered to serve people in various capacities, there are some subtle (although not definitive or universally accepted) distinctions between each of the terms.

Virtual agent and virtual assistant are more closely aligned terms and, thus, more likely to be used interchangeably. However, many associate the term virtual assistant with Apple's Siri, Amazon's Alexa and Google Assistant -- all platforms that draw on the internet and other technologies to perform internet searches and digital tasks, such as updating calendars or checking weather forecasts in response to a user's request. The term virtual agent, on the other hand, is more commonly associated with organizational use, where agents are put to work assisting customers or employees.

What are the core capabilities of a virtual agent?
Virtual agents perform repeatable tasks and can deliver 24/7 customer service.

A chatbot is a specific type of virtual agent -- a conversational agent -- with capabilities to "chat" either via email or messaging or voice. However, the term "chatbot" does not encompass the wider array of virtual agent capabilities that might also include visual representations such as a hologram, as well as other additional characteristics beyond verbal communication.

The term "virtual agent" can also refer to a human agent who works remotely from his or her employer's location to serve customers.

How virtual agents work

Virtual agent technologies initially emerged in the first decade of the 2000s. At the most basic level, virtual agent technologies work on a preprogrammed scripted model.

Organizations could create virtual agents that were scripted to respond in specific ways to specific human requests. Organizations generally identified the particular workflows that would be handled by the virtual agents, mapping out what a virtual agent should do based on each specific request or inquiry made by a person. Organizations then created the scripts to have the agent respond as needed to each request, which the agent could identify by predetermined keywords that had been programmed into the platform. In other words, the virtual agent would identify the keywords and respond with the scripted response that in its computerized analysis best matches the keywords.

As such, these virtual agents could handle routine tasks where an inquiry or request could be met with a predictable response. Organizations programmed their virtual agents to turn over the customer interaction to human agents when requests hit a certain point in the workflow or when the inquires digressed from the script.

In the second decade of the 2000s, particularly toward the latter half, virtual agent platforms incorporated machine learning, natural language processing and artificial intelligence to create intelligent virtual agents that could handle more types of queries, as well as less predictable inquiries, requests and workflows.

These intelligent virtual agent platforms can also connect with back-end systems, thereby providing more personalized responses to the customers or employees who are interacting with the agent systems. Moreover, the AI capabilities built into these platforms enable these agents to "learn," so they can become more efficient and effective as they work, and they can also develop the capacity to handle a wider range of tasks.

Virtual agent capabilities

As virtual agent software has improved in the second half of the 2010s with advances in AI and cognitive computing programs, virtual agents have moved far beyond interactive voice response (IVR) systems. In fact, the technological advances have enabled virtual agents to understand customer intent and can provide personalized answers to customer questions in a humanlike manner.

However, virtual agents still typically communicate with customers via email or live chat on corporate websites. Companies may also use an avatar to provide a visual representation of the virtual agent.

Additionally, most companies as of 2020 still use virtual agents to handle highly repeatable tasks. For complicated tasks, live customer service agents are required. In the world of customer relationship management (CRM) software, virtual agents are used to provide 24/7 customer service, including answering questions on accounts, help with a password, providing recommendations or following up on sales and marketing leads via email correspondence.

For example, a virtual sales agent can be used to email potential customers to request a meeting with a live sales agent. When a customer agrees to a meeting, the virtual agent can obtain a phone number and collect the information a sales rep might need to conduct a live conversation.

This is enormously useful for sales and marketing teams, as they typically only focus on leads deemed "high quality." With a virtual agent, all leads can be followed up on, which could result in higher sales. In addition, virtual agents cost significantly less than human employees.

How to use a virtual agent

Companies interested in adopting virtual agent software through a cloud service provider or software vendor must invest time and resources into "training" the virtual agent. This initial setup period may take months to complete, depending on the level of confidence the company desires. Virtual agents are based on machine learning technology, which improves over time as the system ingests more data and "learns" through continued use.

Virtual agents can only provide information that has been "fed" to the AI system, and if the system contains bad data, customers will receive false information. This makes the setup phase critical. The initial time investment is worthwhile when it results in reduced call volume and frees up live agents to focus on complex customer service tasks, while simultaneously providing a good customer experience.

Carnegie Mellon professor discusses her work on making bots socially aware.

There are a number of cloud-based virtual agent platforms that are pretrained for customer service tasks. These programs require no coding or machine learning knowledge; instead, users configure the virtual agent to suit their business needs and branding.

IBM's Watson Virtual Agent, for example, is trained to understand common customer service requests in the myriad ways customers ask questions. And as with any software-as-a-service platform, Watson Virtual Agent doesn't require installation and improvements are added automatically.

Virtual agent benefits

Virtual agents can deliver a number of benefits to the organizations that use this technology, including the ability to:

  • expand to round-the-cloud automated service for customers, as well as employees, without having to hire full-time workers.
  • respond more quickly and more consistently to customer inquiries or employee requests by scaling the virtual agents to meet anticipated needs.
  • better ensure compliance with standards as virtual agents follow only programmed set of actions.

Such benefits, while each individually important, together also help organizations deliver not only better user or customer experience but also deliver that improved experience at a lower cost and with more consistency than by adding more human agents.

Moreover, virtual agents, by handling the routine and mundane requests, can allow human agents to focus on the more complex tasks that require more skills and critical thinking. This, too, helps organizations improve customer experience by helping ensure human agents are available to take on those tasks more readily rather than if their time was focused on handling the rote requests.

Intelligent virtual agents can deliver even more benefits to an organization. According to the Everest Group, a research firm, IVAs can now help with payment collections, cross-selling, upselling, customer retention and customer acquisition. Everest Group said these additional capabilities can serve specialized needs in various industries, including banking, insurance, healthcare, travel and hospitality, as well as in different organizational functions, such as human resources.


Most consumers and many workers today have interacted with a virtual chat agent or agent system.

Workers who have used an automated system to reset their computer passwords, for example, were likely interacting with an agent system.

Similarly, customers who have clicked on a website's messaging interface, such as the chat feature, were also likely interacting with an agent system.

The use of some virtual agents has also made headlines, as when airports in the 2010s tested hologram virtual agents to respond to passengers' requests for information.

Live virtual agents

Although the term "virtual agent" is increasingly referring exclusively to computerized agent systems, the term occasionally still refers to human agents who work virtually, meaning they're located separate from the organization's offices and thus working virtually. These agents are typically connected to call center (or contact center) customer service. Other industries which typically hire human virtual agents include the insurance and travel industries.

This was last updated in January 2020

Next Steps

Read our ultimate guide to robotic process automation software.

The rise of RPA bots and the role of C-level decision makers

RPA use cases that take RPA to next level

Continue Reading About virtual agent

Dig Deeper on Customer service and contact center

Content Management
Unified Communications
Data Management
Enterprise AI