What is Conversational AI?

Overview of Conversational AI

Conversational AI

Conversational AI technology uses artificial intelligence to parse voice input, determine intent and respond accordingly. It allows customers to interact more naturally than commonly used menu-driven automated self-service solutions. It can be used to address inbound customer inquiries, as well as making outbound outreach to customers.

Through the use of natural language processing (NLP), conversational AI delivers a customer service experience that enables customers to ask questions or make requests in natural conversation instead of speaking simple keywords or pressing numbers when prompted.

When interactive voice response (IVR) systems are paired with conversational AI to create intelligent virtual agents (IVAs), they deliver significant improvements in customer experience, as well as more improved and efficient business workflows.

Customers benefit from a streamlined customer experience where they can simply state their needs and get an answer immediately from an IVA. No more navigating phone trees and trying to select the right option to get to a destination. Now, a customer can simply speak to the IVA and get directed to the right resource. Customers are able to immediately get to the point without getting frustrated and “zeroing out” to escape the IVR in order to access a live agent.

Conversational AI improves contact center metrics such as call containment, first call resolution and average call handling time. This means higher customer satisfaction, improved business process efficiencies and cost savings.

What can conversational AI do?

No matter the industry, IVAs with conversational AI can be trained to handle all of the applications that traditional IVR systems might handle. Some examples include checking an account balance, following up on a claim status, tracking an order, making a payment, resetting a password, etc.

Properly trained conversational AI can also handle many tasks that are too complex for traditional IVR systems, and would otherwise require a live agent. For example, conversational AI can help a customer reschedule an appointment, while a traditional IVR system might only be capable of providing an appointment notification.

According to TechTarget, The most obvious use cases for conversational AI are chatbots or digital assistants that answer repetitive questions. However, augmented analytics platforms are also taking advantage of conversational AI to allow more people in an organization to interact with data. Instead of typing an SQL query, a business user can simply type a natural language query which is answered in natural language.

Adding the Human Touch

Conversational AI can detect when customers are struggling and need agents to step in and help. For example, some customers may be very comfortable filing an insurance claim with an IVA that collects the claim details. Others may feel more comfortable or need the guidance and compassion of a live agent to help them work through the claims process. IVAs can identify these customers by their tone of voice or cadence and escalate the calls accordingly to a live agent.

Business Impact

Conversational AI has become mainstream with popular digital assistants like Siri and Alexa. Now, it's growing in business applications as a way to enhance customer service. Customers can receive answers to commonly asked questions or take action to complete common activities in a more efficient manner which increases customer satisfaction. By using IVAs, businesses save time and money.

Businesses are even implementing conversational AI into their internal systems to help with human resources (HR) activity, remote work reporting and other tasks. Fast-growing companies can use IVAs to hire staff when the hiring process is time-consuming, or human agents cannot get a good return on investment (ROI), as per G2.

Conversational AI as an Expanding Market

Conversational AI is a growing market as developers explore and expand its use. It will affect most businesses in the years to come. Here are a few interesting statistics:

  • Gartner estimates the 2021 conversational artificial intelligence platform market is $3.8 billion, growing 55% year over year. Conversational AI platform providers must explore a holistic view to differentiation and not just product-based differentiation.
  • According to Deloitte, the global conversational AI market is set to grow by 22% between 2022 and 2025 and is estimated to reach $14 billion by 2025.
  • According to Gartner, By 2022, 70% of white-collar workers will interact with conversational platforms on a daily basis. This expected growth is on par with the increase of millennials in the workplace. Because chatbots cater to millennials’ demand for instant, digital connections that keep them up to date at all times, millennials will likely have a large impact on how well and how quickly organizations adopt the technology.

Benefits of Conversational AI


Improved Customer Experience

IVRs provide easy, efficient, 24/7 customer self-service.

When conversational AI is added to an IVR, customers can do more, faster. They spend less time on the phone, avoid navigating the tedious menus and bypass the hold times associated with waiting for a live agent. Customers can say exactly what they want and get an immediate response in natural language.

Conversational AI engines also make it easy to offer support in multiple languages, providing services in customers’ native languages.


Lower Costs

Most companies consider their call center to be a “cost center.” Hiring and training live agents and ensuring that PCI-compliance is met, if needed, are costly endeavors.

Automating those tasks with IVAs allows businesses to contain more calls and free up live agents who are then able to provide better, high-touch service to customers with complex problems.

Hosting a conversational AI solution on our HIPAA- and PCI-compliant cloud allows you to process payments or personal health information outside the scope of your call center. By diverting the collection of sensitive information from live agents to automated systems, businesses are able to de-scope from complex and costly compliance requirements.


Power and Flexibility

AI Fusion is a standalone voice processing environment that can access each of the major AI engines - Nuance, Google, Amazon, IBM, Etc. - at each instance of a dialog to interpret a single utterance.

By combining the engines in one environment, developers get the best AI engine options without being locked into a single vendor.