What are Conversational AI Agents?
Conversational AI agents, also known as virtual assistants or chatbots, depending on their level of sophistication, are technologies with text and or speech recognition capabilities that provide human-like responses to human inquiries.
For a conversational AI agent to function efficiently, it needs to understand the meaning behind the request from the human user and then match this meaning (or intent) to its database of prepared responses. Advanced conversational AI agents are capable of learning from these requests over time to respond in more improvised ways. They can do this through a subdivision of AI called Machine Learning.
The aspect of Artificial Intelligence most directly related to the functionality of Conversational AI agents is Natural Language Processing – a hybrid of linguistics and AI that aims to teach computers the capacity to understand text and provide spoken words just as a human can. When spoken words, rather than text, is the input that the computer receives, the technology that enables the computer to understand the input is more specifically called Automated Speech Recognition.
Conversational AI vs Chatbots vs Virtual Assistants
These terms are often used interchangeably. However, they mean different things and are defined in terms of their complexity.
Chatbots are the most superficial level of Conversational AI agents as they mostly function as “question-and-answer” systems designed to provide exact responses to question matches.
Virtual AI agents are in the middle bracket. They not only provide answers to questions but they also have a wider functionality range such as small talk. Common examples are the technologies we interact with daily e.g. Siri, Alexa, Cortana.
Virtual Assistants occupy the uppermost level and are designed to go beyond isolated conversations to ensure a smooth flow of interactions. They are also built for specialized purposes and typically have a dedicated database that handles specific conversations with a higher level of advancement.
The Rise of Conversational AI
Conversational AI agents are becoming more popular today. We live in a fast-paced world where everyone wants quick solutions. A survey by PSFK discovered that no fewer than 74% of consumers turn to chatbots in the search for quick answers.
Existing economic forecasts favor the continued ascension of this technology as Markets and Markets projects that the global Conversational AI market will reach $15.7 billion in 2024 from $4.2 billion in 2019. Much of this spending will be directed towards the development of chatbots which is estimated will be worth $7.5 billion by 2024 from $1.2 billion in 2018.
Conversational AI in Finance
Already, with the advent of mobile banking services, banks and other financial institutions have developed automated platforms to communicate with customers and execute simple tasks. These platforms have taken off well with users in the digital age and provide a base through which conversational AI can be employed to improve customer relations and engage in communication more effectively than traditional chatbots have done.
By moving away from scripted responses, conversational AI can use advanced technology such as ML, NLP and others to learn from previous discussions with customers and develop appropriate responses to future inquiries. Such communication platforms can be equipped with audio-text conversions and vice versa to further humanize and enhance the customer experience.
Connecting conversational AI platforms to analytics can help to pool data which can later be applied by financial institutions to determine what services are in higher demand and new ways to grow their customer base and generate revenue. By doing this, service options will be gradually expanded by institutions.
Conversational agents are capable of providing automated responses to customers 24/7 on platforms for account inquiries, payments, statements and other simple tasks. More complex tasks and inquiries can be directed to appropriate human agents for response and resolution. By doing this, scarce human resources and expertise can be committed more efficiently to situations and unwanted delays can be avoided.
Conversational AI also has the potential to be integrated into personal finance management and offer customized services to customers who need to be walked through available services. Providing services like this will make institutions more attractive to customers and encourage the use of AI based services.
Conversational AI can be instrumental for propelling the finance industry to a new level of development which prioritizes customer satisfaction in ways to improve service delivery and reduce operating costs, leading to increased revenue generation and encouraging economic growth.