Conversational Systems Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Conversational Systems Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The conversational system market is projected to grow at 15.7% CAGR during the forecast period of 2021-2026. Conversational systems are intelligent machine solutions that can understand language and conduct a verbal or written conversation with customers. These systems are aimed at improving the customer experience by boosting interaction. The availability of large amounts of data and increasing, data-related complexities in the enterprises have expected to drive the demand of the conversational system solutions in the market. Further, the requirement of AI-enabled systems to mimic human brains is one of the crucial parameters responsible for the development of the industry.

Key Highlights

• The usage of conversational systems is increasing because of deep neural networks, machine learning, and other advancements in AI technologies. Conversational systems, such as chatbots are used for various applications across several end-user verticals, such as retail, BFSI, energy & power, etc. One primary consumer-facing application is a conversational system as a personal assistant. It helps consumers accomplish various tasks; for instance, Apple’s Siri is offering an intuitive interface for connected homes or cars.
• Through conversational software platforms, an organization can simplify and reimagine business processes, and reduce and automate business workflows through context-aware intelligence systems. These platforms enable users and systems to have meaningful interactions and work in tandem to meet business objectives.
• Another use on the rise is virtual assistants adopting the role of the customer service agent. For enterprises, virtual assistants are improving customer and brand experience with a more consumer-friendly approach. For example, in the recent past, SBI Card, one of the largest credit card issuers, launched a live electronic assistant for customer support and services. The virtual assistant will enhance the customer experience by giving instant and relevant responses to customer queries.
• Retail companies are incorporating their conversational system application to various widely-used messaging apps to offer rich customer experience. Retail outlets, such as Domino’s, are leveraging artificial intelligence and machine learning through chatbots, wherein a user can place an order directly through messenger.
• According to IBM, 265 billion customer requests are recorded per year, and businesses spend nearly USD 1.3 trillion to address them. The company forecasts that using chatbots could help save up to 30% of this cost. These factors will boost the growth of the conversational system market over the forecast period.
• In March 2020, Haptik Infotech Pvt Ltd, in collaboration with the Indian Government, launched MyGov Corona Helpdesk, which is the official Government of India chatbot on WhatsApp before the infamous lockdown. The action here was one of the very first initiatives by the Government of India to raise awareness among the Indian Citizens. The users can send a message on Whatsapp for queries related to COVID-19. Users can access additional resource links provided by the chatbot to learn about the COVID-19 consequences, preventive measures, etc.

Key Market TrendsBFSI Industry is Expected to Grow at a Significant Rate Over the Forecast Period

• In the banking and financial verticals, the attempt to mitigate the need for live call centers and slit excess costs is significantly visible, owing to the introduction of conversational platforms.
• For instance, Citi, one of the banking giants across the world, announced the launch of chatbot in Hong Kong in the recent past, wherein customers could check their recent transactions and account balances through Facebook messenger. This is expected to have a massive impact on the growth of the market and compel other banking institutions to offer a similar service and not to lose the market share over the next six years.
• In September 2019, YES Bank, an Indian Private sector bank, introduced YES ROBOT, an artificial intelligence-enabled chatbot, to support its customers. Developed by Microsoft, YES ROBOT enables customers to perform financial and non-financial banking transactions by using conversational AI, which has extensive financial knowledge.
• Many tier-I investment banks have technology and operations spread across the globe with a dedicated help desk providing 24x7 support. The conversational systems can be deployed to address repetitive support requests like password reset, access to IT systems, etc.
• By implementing the conversational platforms, organizations will be able to provide consistent service to employees, less operational costs, and free up helpdesk staff to focus on core tasks. For example, Credit Suisse has recently deployed a chatbot to handle routine helpdesk requests.

North America Geographic Segment is Expected to Hold a Significant Share Throughout the Forecast Period

• The primary driver for the growth of the North America geographic segment is the significant presence of technology providers and the increasing usage of cutting technology-enabled bot solutions across major industries. These players present in the region are focusing on the development of innovative solutions to stay in the competitive market landscape.
• In May 2020, NVIDIA announced the release of NVIDIA Jarvis. This GPU-accelerated application framework offers companies the opportunity to use video and speech data to build state-of-the-art (SOA) conversational AI services customized for their industry, customers, and products.
• The players in the region are also entering into strategic partnerships to earn a competitive edge over its competitors. For instance, in January 2020, Vonage entered into a partnership with Artificial Solutions, a significant provider of enterprise-strength conversational AI. The newly formed alliance has introduced a new connector that integrates Vonage's API solutions with Teneo, a conversational AI analytics platform.
• The increasing research and development activities in the region are also contributing to the growth of the North American geography segment. Microsoft Research's NLP Group has developed a dialogue generative pre-trained transformer (DialoGPT), a pre-trained deep-learning NLP model for automatic conversation response generation. The newly developed model was trained on over 147 million dialogues and achieved state-of-the-art results on several benchmarks.

Competitive Landscape

The identity analytics market is moderately competitive and consists of a significant number of global and regional players. These players account for a considerable share in the market and focus on expanding their client base across the globe. These vendors are focusing more on the research and development investment, strategic partnerships, and other organic & inorganic growth strategies to earn a competitive edge throughout the forecast period.

• April 2020 : Google LLC’s Google Cloud launched an AI-enabled chatbot. The chatbot is called the “Rapid Response Virtual Agent program.” The chatbot program is designed for Google Cloud customers to get a more quick response to queries regarding the COVID-19. The conversational system has also designed for enterprises that need to be able to provide information related to the pandemic to their customers, like government agencies and public health organizations, as well as BFSI and retail industries.
• March 2020 : Microsoft announced that the United States Centers for Disease Control and Prevention (CDC) is using Microsoft’s Healthcare chatbot service to empower its COVID-19 assessment bot. The CDC’s Coronavirus-related bot was meant to assess symptoms and risk factors quickly and suggest several courses of action.

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