Conversational AI: Trends to Watch in 2023
After several years of steady growth, 2023 marks the year when the global conversational AI (CAI) market should really take off. Analysts expect CAI adoption to expand more than 22% this year alone, with longer term growth likely to exceed $14 billion by 2025.
What are the key drivers of this explosive growth in the CAI market? Let’s take a closer look at the top CAI trends to follow – both in 2023 and beyond.
Trend #1: IVAs and Automation
Intelligent voice assistants (IVAs) process the words a user speaks and converts them into digital data that software can reliably analyze. Advances in IVAs could not be more timely. Right now, according to Gartner, more than 70% of business professionals regularly interact with conversational platforms. Moreover, Gartner estimates that one in 10 agent interactions will be automated by 2026, an increase from the current 1.6% rate of AI-automated interactions.
Clearly, IVAs and the automation they provide are increasingly critical. This is especially true for those cutting-edge companies that have wisely made multichannel communication a central part of their support model. If IVAs drive the CAI platform that lies at the heart of multichannel communication strategies, then the IVA has fully moved from “nice-to-have” to “must-have” status. Any business that wants to stay competitive, reduce operational costs, and take its customer service to the next level should take note.
Trend #2: Natural Language Understanding (NLU) Model Improvements
Another key development in the CAI market involves improvements in Natural Language Understanding (NLU) models. NLUs are already adding value, but advances in the technology will greatly enhance its delivery of a more human-like conversational experience.
Many consumers are already familiar with products that provide text-to-speech and human voice. These market offerings blur the lines between what customers interpret as a computer conversation and a live human agent. The current approach typically involves a service that connects to an “off-the-shelf” NLU platform offered by one of the big tech companies. What really excites CAI market analysts is the prospect of IVA service providers developing their own sophisticated NLU platform and using that to augment the off-the-shelf NLUs. The language and accuracy of conversations using this approach greatly exceeds what providers can achieve using just off-the-shelf NLUs. Companies will continue leveraging existing “off-the-shelf” technology, but we will also see businesses finding ways to utilize their own intellectual property to drive a more meaningful, human-like experience.
Conversational AI is the key to augmenting existing technology with a company’s IP. This integration will enable voice-enabled self service, a feature that customers are demanding, and the ability to handle complex voice interactions.
Trend #3: Actionable Intelligence
Another burgeoning Conversational AI trend in 2023 relates to data, analytics and “actionable intelligence” around the conversational sides of a business. Hundreds of thousands of voice and conversational transactions, or events, equates to millions upon millions of data points and bits of information. This data could be aggregated and served back to the company proactively to enable more informed decisionmaking about the business or business operations.
Actionable intelligence provides multiple points of value. Perhaps most prominently, it helps companies provide a better customer service experience by providing greater – and faster – understanding of why a customer is reaching out and at what frequency. This intelligence prompts recommendations for actions that companies can take. These actions might include updating a particular communication point or proactively reaching out to a customer, informing them about their account, a transaction or other notification. This empowers companies, business managers, or owners to take action that increases customer satisfaction with the brand and increases revenue opportunities.
These are a few value points that will drive the CAI market in 2023. The benefits of Conversational AI are compelling, and companies are waking up to the value of deploying IVA in their business – both in 2023 and beyond.
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