Transform user experience with Conversational AI

What is Conversational AI?

Conversational Artificial Intelligence (AI) is a set of technologies, like chatbots and virtual assistants, that enables machines to process, understand, and respond naturally to text or voice inputs. They use high volumes of data, machine learning (ML), and natural language processing (NLP) to recognize speech and text inputs, understand intent, decipher various languages, and respond in a way that mimics human conversation.

When building a successful Conversational application, it's crucial to integrate context, personalization, and relevance within the interaction between computer and human. Moreover, Conversational Design is a discipline that uses principles based on human-to-human interaction to design flows that sound and feel natural to users when interacting with a conversational AI solution.

“Hi, can you add espresso beans to my grocery list?”

user icon for natural language processing

User Query

Representation NLP, DL, ML Representation NLP, DL, ML

“Sure! I have added Espresso beans to your grocery list.”

conversational ai voice bot receiving command

Bot Reply

How does Conversational AI work?

Conversational AI combines several technologies, including ML, NLP, Automated Speech Recognition (ASR), natural language understanding (NLU), to process each written or spoken word and figure out the best way to respond and learn to get better from every user interaction. Conversational Intelligence software applications are changing the way businesses interact with their customers, enhancing responsiveness and personalization.

Process showing How conversational AI works

Components of Conversational AI

Conversational AI consists of four key steps: input processing, input analysis, output generation, and reinforcement learning. Unstructured data transformed into a machine-readable format, which is then analyzed to generate and give an appropriate response. Over time, the underlying machine learning algorithms learn and improve the quality of response. These four steps are further detailed below:

Input Processing

Input Processing

First, a user provides either a text or voice input through a website or an application. For spoken words, automatic speech recognition (ASR), also known as speech recognition, will convert it into the text to be read by the computer

Input Analysis

Input Analysis

Next, the conversation engine will use natural language processing (NLP) to decipher the meaning and derive the text's intent.

Output Generation

Output Generation

During this step, the application formulates a response based on intent using Dialog Management. Further, natural language generation (NLG), a part of NLP, orchestrates and converts the response into a human-understandable format.

Reinforcement Learning

Reinforcement Learning

Finally, machine learning (ML) algorithms learn from experience and refine response overtime to provide a better response.

Components of Conversational AI

What are the benefits of Conversational AI?

For businesses across various industries, conversational AI is a cost-efficient solution to create a smarter omnichannel experience for their customers. It enables you to meet the customers' needs and address their requests while reducing cost and efforts.


Unlike other forms of interaction, conversations are the preferred medium for people with diverse technical knowledge and physical abilities. Applications based on conversational user interfaces could be a technological gateway to a wide variety of audiences.

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Ease of Use

Ease of Use

Conversing is a natural, easy, and quick way for customers to interact with a business, eliminating the tedious tasks of searching, clicking, and swiping to find what they need.

Increased sales and engagement

Conversational AI tools enable businesses to provide real-time information to their end-users, leading to improved customer experience, increased customer loyalty, and additional revenue through referrals.

Increased sales and engagement


Conversational AI chatbots can have one-on-one interactions with customers, offering personalized recommendations based on the user's past interactions and even cross-sell products that the user may prefer.

What are the use cases of Conversational AI?

People often have online chatbots and voice assistants on mind when they talk about conversational artificial intelligence. Most conversational AI apps have sophisticated algorithms built into their backend to ensure that they offer human-like experiences. While an AI-powered voice assistant is the most popular application of Conversational AI, there are many other use cases across several industries.

  • Customer Support
  • Banking and Finance
  • Retail and Commerce
  • Healthcare

Businesses are using online chatbots to answer frequently asked questions (FAQs), provide personalized recommendations, cross-sell or upsell products, and more, enhancing customers' experience throughout the sales cycle. Some of the examples include messaging bots on e-commerce sites and automated tasks performed by virtual assistants.

Repetitive tasks like gathering and processing data can be automated using conversational banking solutions, improving customer engagement and understanding customers' likes and dislikes. Banks are seeking such automated solutions to provide quick and seamless financial assistance to their customers. With conversational AI solution, you can enable the digital transformation of your financial business.

"Whether a customer at home, instore, or waiting in line for a cup of coffee, retail conversational solutions deliver a personalized multichannel experience to help them get things on the move. From navigating an e-commerce website to placing orders on a mobile app, conversational AI makes it easier for your customers to find what they are looking for, fast. For instance, AI assistants can help users navigate different categories, find specific products, and even place the order, boosting conversion rate and revenue for businesses."

From gathering patients data for pattern recognition to performing accurate diagnostics, contextual AI assistants can automate many healthcare tasks. For example, conversational solutions for medical assistance can help patients choose the right health plan, schedule appointments, ask questions regarding medication, and more, reducing human intervention significantly and cutting down on the response time.

Challenges of Conversational AI Solutions

Although businesses began adopting conversational solutions in recent years, conversational AI has many hurdles to overcome like any new technological innovations in its infancy. Let's look into some of the challenges businesses face when implementing such AI applications.

Ever-changing communication

Ever-changing communication

Whether a user gives input in text or voice, processing language can be a challenge for conversational AI because there are factors impacting communication between a human and a machine, including dialects, accents, sarcasm, slang, and emotions.

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privacy & security

Privacy and security

As conversational AI collects and deals with enormous amounts of user data, it is vulnerable to security breaches. Conversational AI apps must be designed with high security and privacy standards to build trust among end-users and increase usage over time.

discover & adoption

Discover and adoption

Although AI chatbots and voice assistants are being used increasingly by the general population, there're still industries and use cases where users need education on how these technologies can simplify their tasks and lead to a better experience.

Conversational AI and is a SaaS-based Conversational AI platform that brings together all the tools needed to develop conversational AI apps in one place. Conversational solutions can revolutionize user experience and empower businesses to manage operations smoothly, be it customer support, lead generation, or updating buyers on their orders.

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