HMRC registers more than 3 million chatbot exchanges since the start of the pandemic

Interaction with chatbots has increased during the pandemic, with lockdowns and increased IT budget cited as key drivers.

Her Majesty’s Revenue & Customs (HMRC) has recorded more than 3 million chatbot trades since the start of the COVID-19 pandemic, according to the result of an FOI from Parliament Street

The Parliament Street think tank found that the number of interactions with the HMRC chatbot service rose from just under 200,000 in the 19/20 financial year to nearly 2.5 million in 20/21, a total increase of 1,150%.

Although interaction with chatbots declined slightly in the most recent fiscal year, it was still well above pre-pandemic levels at 846,937.

In total, this represents a total of 3,275,046 distinct chatbot interactions since the start of COVID-19.

Increase in digital demand and budget

Parliament Street researchers and third-party experts concluded that the significant increase in chatbot interactions was the result of COVID-19 and the lockdown, where demand for tax relief and income support services has increased.

Additionally, the increased demand for digital services has been reflected in the recent increase in HMRC’s IT budget – over £1bn (£1,074,700,000) has been spent on IT over the past 12 month, compared to just over £900million being its fiscal budget for FY20/21.

This represents a total IT budget increase of 54% from FY19/20 to the most recent FY21/22.

“During lockdown, chatbots have become part of the solution that has helped large organizations cope with the onslaught of online requests that were coming in every day to ease the burden on underfunded teams and appease customers with a simple resolution or to encourage them that the process is underway to process their request while they wait for a live customer service agent,” said Suvish Viswanathan, Head of Marketing at Zoho Europe.

“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 issues are addressed, it’s critical that businesses looking to deliver a positive customer experience do so with a combination of chatbots for basic inquiries, and have the ability to transition to human support at the right time.

“It is also essential that the data collected is 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 that follow-ups can be carried out methodically and efficiently. This can ensure seamless interaction with customers with ongoing conversations at different stages of their journey with a brand, rather than having to start from scratch each time.

“The right approach to chatbots boosts consumer engagement, reduces wait 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 relieving organizations of thousands of basic customer service requests.

“However, the ‘one size fits all’ policy typically associated with chatbots, where it’s impossible to get a human response to a bespoke problem, can lead to frustration and poor customer experience.

“In this case, it is positive to see that HMRC has understood the value of investing in its chatbot program to avoid falling into this category. Other organizations that are inundated with customer service requests should follow suit, especially as demand for digital and on-demand support continues to rise.


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