A short guide to conversational AI | NTT DATA

Thu, 03 September 2020

A short guide to conversational AI

Convesational AIThe world is in the midst of a conversational AI revolution. Users are rapidly adopting voice assistants and chatbots as a means of interacting with brands and acquiring support and information. Millennials and Gen Z, two highly important consumer segments, are especially willing to engage with bots.

Conversational technologies provide a huge opportunity to improve efficiency and encourage intelligence across all channels. Nevertheless, many businesses are still not sure how to begin applying conversational AI, what benefits they might expect, and how bots are already being used in the world today. In the guide below, I explore some of the central issues in the sector and the key trends to be aware of.

What it means

Conversational AI describes any artificial intelligence which facilitates conversations in natural language between humans and computers. While the term “conversational AI” encompasses a whole range of technologies – from Chatbots to Voice Apps, to Cognitive IVR, to Virtual Avatars – ultimately, these are all designed with the same central objective in mind: enhancing the customer experience.

The industry

The conversational AI market is predicted to grow from $4.2 billion in 2019 to $15.7 billion in 2024 – although since this value was calculated almost a year before COVID-19 and the changes the pandemic has ushered in, these numbers could be significant underestimates.

This burgeoning market will create new employment. One example I find particularly fascinating is the idea of a “ChatBot Coach”, who ensures that chatbots are answering frequently asked questions accurately and that users are satisfied with their experience.

Business benefits

At NTT DATA, we believe that conversational AI plays a fundamental role in the customer care journey and in delivering service excellence. To that end, it can be a huge differentiator that drives savings, customer experience, customer loyalty, and long-term profitability.

One of the major ways that conversational AIs can support businesses is in meeting customer service expectations: today, customers expect their brands to resolve their issues as fast as possible and with little to no hassle. Virtual assistants help build a reliable, always on and easy to access customer service.

Another key battleground for conversational AI is personalisation: conversational AI enables businesses to provide tailored experiences that learn from past interactions and the context around the user in a particular moment in time. In doing so, it generates an incredible amount of data and through which organisations can capture “intent”, which in turn can be leveraged to develop a competitive advantage.

Major trends

The pandemic has encouraged businesses and consumers to try new forms of engagement. Some of our clients are rapidly embracing conversational AI to support their care journeys – launching text and/or voice-based virtual assistants to relieve pressure from their contact centres and keep operations lean.

Voice assistants are another trend worth highlighting: whilst Alexa, Cortana, Google Assistant and Siri are big with US and European consumers, Xiao AI (used with the Xiaomi smart speaker) and DuerOS (produced by Baidu) are dominating the Chinese market. And it’s not just about smart speakers: voice assistants have started entering the automotive market (Tmall Genie by Alibaba will soon feature in Audi, Honda, and Renault cars, as announced in CES Asia 2019), as well as consumer appliances and wearable devices like smartwatches. Brands with products in all of these sectors around are racing to develop Alexa skills, Google Actions, and other voice assistant capabilities to provide meaningful voice experiences for the users.

Trends in retail

Chris Messina, the inventor of the hashtag, coined the term “conversational commerce” back in 2015 to refer to the intersection of messaging apps and sales. The idea is a relatively simple one: users can engage with their favourite brands – and specifically with a human representative, a chatbot, or a mix of the two – directly through chat apps like Facebook Messenger, WhatsApp, Apple Business Chat, and others, and can complete a purchase without leaving the app.

Though straightforward, it’s a concept which has exploded in relevance since its creation. As my colleague Tom Winstanley argued in a recent blog post, the retail environment is moving beyond multi-channel towards digital-first experiences. In this evolution from offline to online shopping, the idea of conversational commerce is rapidly coming into its own.

Conversational commerce, like many other forms of conversational AI, enables businesses to meet customers exactly where they are. As such, it’s a direct challenge to the old paradigm of companies forcing customers to come to their own touchpoints.

In the COVID-19 world in which we live, this “we come to you” proposition has never been stronger. However, even with the pandemic taken out of the question, conversational commerce is an alluring offering for Millennials and Gen Z who are more accustomed to online and multi-channel buying journeys.

Humanising conversational AI

Making conversational AI feel human is of utmost importance, even if we all know that it's really just a set of clever algorithms. Conversational design is the technology that achieves that, encouraging users to continue to interact with the agent, and motivating users to return to the AI when they’re in need of assistance. AIs that people can connect with on an emotional level are more engaging and drive adoption.

To build human-like AIs, conversational designers consider invisible elements, such as the assistant’s name, its personality, mood and tone of voice, as well as the visible ones, such as the visual appearance and colour palette of an AI assistant.

Organisational efficiency

Chatbots can be integrated with most messaging platforms regularly used by businesses (Microsoft Teams, Slack, and so on) and help teams work more efficiently. Thanks to the use of conversational AI, people can focus on the right thing at the right time, and have easy access to the information they need.

The ability to improve efficiency using conversational AI is something that NTT DATA Group is particularly interested in. The company recently achieved second place in EMEA in the global SAP Virtual Hackathon 2020 by focusing on employees’ onboarding and reducing HR business partners’ administrative tasks.

To find out more about NTT DATA’s work with conversational AI, please contact silvia.digregorio@nttdata.com.

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