What is Conversational AI?

We all remember conversing with a Chatbot at some point in our lives. 

And we also remember having to then connect with a Human because the chatbot couldn’t understand our query. It was simply too complex for the Bot to decipher. The customer support executive, however, could easily understand our intent and satisfy us with an appropriate solution. 

Now imagine a Chatbot who can play the customer support executive as naturally as a human can! It can understand our intent. Go through the multiple layers of a question. And give personalized solutions in a language we understand! That is the perfect example of high-level conversational AI! 

#DYK there is an entire discipline dedicated to Conversational Design? 

Conversational Design concerns designing flows that seem real & human-like. 

How does Conversational AI work?

Simply put, It allows computers to process text or voice into a language they understand. The machines then are able to understand the questions and respond to them aptly. 

There are 4 major components of a smart conversational AI:  

  • NLP (Natural Language Processing) 
  • NLU (Natural Language Understanding) 
  • Machine Learning 
  • Speech Recognition 

All these features work in a constant loop to understand, analyze, and respond to humans. Additionally, machine learning helps computers remember new words, phrases, contexts so that they continue building their database. And get better at responding in a more personalized manner. 

The whole purpose of developing it is to give users the same kind of conversation experience with machines as they have with real humans. 

How does coversational AI works

What is the difference between Conversational AI and a Chatbot?

Usually, chatbots are these basic software programs that answer people’s questions through a chat-based interface. Websites install them with predesigned questions & answers flow to navigate visitors to the desired action. 

Whereas, conversational AI is more context-based. It is designed to give users a conversational experience with computers. Like how you would have with another human! They use various artificial intelligence technologies to make computers talk with us in a smarter and more natural way. 

The most basic difference between the two is that Conversational AI is AI-based and chatbots are rule-based.  

Conversational AI Vs Chatbot

Importance of NLU in Conversation AI

NLU stands for natural language understanding. A question changes meaning with changing contexts. While a human can understand the intent behind a question, machines usually fail to do the same. 

NLU comes under the bracket of NLP (Natural Language Processing and conversational AI. It helps conversational AI mark patterns in human language, understand user’s intent, and give them apt solutions accordingly. Conversational AI is developed so that computers can understand the intent of the user in both written and spoken. 

Conversational AI, NLU, & NLP, together with help computers to interpret human language by understanding the basic speech parts. 

Different versions of Conversational AI 

From Facebook Messenger to WhatsApp to websites, brands are deploying conversational AI everywhere! Making visitors aware of their products/services, learn about their numerous benefits and reach a positive decision. Also, it is, by responding aptly and on time, helping brands curate & deliver a “WOW” customer experience. Every time! 

So, here are the 3 different types of Conversational AI that are great for your business: 

  1. Voice Assistants: Think of Alexa! How she recognises & responds to your voice commands. Usually, you have to speak out loud to the voice assistant to have it perform a function. Such as “Play Blinding lights by weeknd” or “Set the alarm for tomorrow”. So, Businesses can use them to answer customers’ questions related to their brand. 
  2. Mobile Assistant- Mobile assistants like Siri or Google are no different than Alexa or any other voice assistant. However, they are present in one’s mobile and act by converting speech to text. People might use them to place orders from their phones when they are busy. Brands have to stay prepared for that! 
  3. Chatbots: Chatbot is different from all kinds of conversational AI because it actually converses with customers. It keeps asking them relevant questions until they have reached the solution that they were looking for. Developers are continuously trying to make chatbots more contextual so they can give smart personalised solutions. 

Industries  that are using  Conversational AI

According to a report by marketsandmarkets “The global conversational AI market size is expected to grow from USD 4.8 billion in 2020 to USD 13.9 billion by 2025, at a Compound Annual Growth Rate (CAGR) of 21.9% during the forecast period”. 

Presently, businesses around the world are using it mostly in the form of chatbots only. However, there still are many other forms in which different industries are deploying this technology for benefit. 

Some of the industries employing are: 

Customer Support: There is no industry other than customer support that is utilising conversational AI fully to give customers a great time. Lately, customer support executives have been using AI laced chatbots to answer customers’ doubts. 

Human Resource: From training the employees to having them on-board to keeping their records, the Human Resource industry has been utilising conversational AI to optimize their internal processes. 

Healthcare: While conversational AI can make healthcare more accessible and economical for the common man, it can also help streamline management processes at hospitals. 

Software: It makes working in the office very easy. From correcting your spellings to making a search online, it helps you deal with both simple & complex questions. 

Internet of Things: IoT is the next big thing, and conversational AI makes a very integral part of the chain. Devices like Alexa use automated speech recognition to talk with consumers.  

Wrapping up

With more interactions with humans, Conversational AI will continue to move towards perfection. It is quite possible that in the coming future this technology becomes as effective as a human representative. It might even converse or provide solutions based on the emotional state of the consumer. From Healthcare to Human resources to Food, every industry today can use & experiment with conversational AI to grow multifolds. 


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