Conversational AI Technology

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What is Conversational AI technology?

Definition of conversational AI

Conversational AI is a set of technologies that enables computers to recognize the human language, differentiate one language from another, understand what is being said, determine the right answer and respond in a way that mimics human conversation.

In short, conversational AI is the technology that enables computers to communicate the way we, “Humans”, do.

Which forms can conversational AI technology take?

By bridging the gap between human and computer language, conversational AI allows technologies that use artificial intelligence to interact with people in a human way. As a consequence, conversational can take several forms, such as:

  • Chatbots
  • Dynamic search such as FAQs
  • Virtual Personal Assistants (Amazon Alexa, Apple’s Siri, and Google Home)
  • Etc…

Conversational AI solutions can be offered over both text and voice modalities and hence various channels and devices that offer support these modalities – from SMS and web chat for text modality to phone call and smart speakers for voice modality.

How does conversational AI technology work?

Conversational AI uses Natural Language Processing combined with AI algorithms to engage in contextual dialogue by processing and contextualizing the written or spoken word in order to figure out the best way to handle and respond to user input. This process usually happens in three steps, as follows.

Step #1: Understand what the user’s intent

First, the application receives information input from the user, which can be either written text or spoken phrases. The AI then uses Natural Language Understanding (NLU) in order to understand the meaning of a question regardless of grammatical mistakes, spelling mistakes, jargon or slang. This capability is very different from recognizing a keyword or phrase and answering with a canned response that was scripted for that specific keyword.

Step #2: Select the correct answer

Based on its understanding of the user’s intent, the AI then must determine the appropriate answer in its knowledge base.

Step #3: Deliver the answer

Finally, the AI uses Natural Language Generation (NLG), the other part of NLP, to generate the appropriate response in a format that is easily understood by the user. Depending on which channel is used, the answer can be delivered by text or through voice, using speech synthesis or text to speech.

What are the benefits of conversational AI technology?

Conversational AI technology can bring a lot of benefits to both the company and customer support departments.

But the main benefit is probably to the users, as it represents a very simple way for them to get answers to their questions, without having to reach out to a human customer representative. And when you consider both the waiting time and cost associated with getting in touch with customer support through a phone call, this clear and easy alternative path to information can only be seen as an improvement.


Conversational AI solutions are available 24/7, enabling companies to quickly support their customers outside of normal business hours, and customers to get answers to their questions, no matter what time of day they’re searching. By doing so, it also reduces the need for tickets, callbacks, and queues and acts as a deflection tool.

Improves productivity

By automating answers to tier-1 questions, conversational AI frees customer support employees from time-consuming repetitive queries and enables them to focus on more complex and high-value issues.

Reduces costs

As we’ve seen, conversational AI improves service resolution time and agent productivity, as a consequence, costs go down. In a pandemic era as we’re currently experiencing, conversational AI and automation are also cost-effective ways to manage the explosion of incoming inquiries. Indeed, it requires a minimal upfront investment, deploys rapidly, and acts as a deflection tool, which is less costly than having to scale up and recruit additional support agents.

Increases revenue

Because it delivers responses in seconds, eliminates wait times, provides timely, accurate, and tailored experiences on your customer’s terms, conversational AI technology increases customer satisfaction and drives engagement and loyalty, which in turn, increases revenue.

Generates insights

Conversational AI technology allows companies to capture new sources of data on customer behavior, language, and engagement. These insights are precious and can lead to product or service improvement and even new product developments.

Conversational AI technology main challenges

As for every technology, conversational AI is not perfect and faces some challenges.

Constantly changing communication

Human ways of communicating are always evolving. Whether it is through dialects, sarcasm, emojis, or slang, technology needs to keep up with these changes in order to constantly improve communication between humans and machines.

Security and privacy

Conversational AI technology may sometimes have to deal with sensitive personal information that can be hacked and stolen. Therefore, it must be designed with security in mind to ensure that privacy is respected and all personal details are kept confidential.

Discovery and adoption

Although conversational AI technology is increasingly present in our everyday lives, some people are still not comfortable using this technology. Consequently, potential users need to be educated in order to better apprehend this technology and understand how valuable it can be.

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