Published: 5 Minutes read

Chatbots Vs Conversational AI: What’s the difference?

Chatbots and Conversational AI tools are proving to be integral solutions to increasing engagement and developing lasting relationships with their clients, prospects, and employees while reducing service costs.

The global Conversational AI market size is projected to reach $32.62 billion by 2030

But is there a significant difference between them both? Which of the two technologies is best suited to support our company goals? These are questions we frequently get from our clients.

Although “Chatbots” and “Conversational AI” are often used interchangeably, they are not the same. Let’s simplify everything for you so you can choose which one will best optimise your internal processes and overall engagement experience.

So what’s the difference between a chatbot and conversational AI?

We start by looking at their definitions.

Chatbots are computer applications that replicate human conversations to improve customer experiences. Some employ Artificial Intelligence and Natural Language Processing (NLP) techniques to understand user questions and transmit pre-written responses in real-time, while others work according to pre-established conversational flows.

Conversational AI (also known as Conversational Artificial Intelligence) is a much broader term for AI-based communication tools, including chatbots and virtual assistants (e.g., Siri, Alexa, Cara). Conversational AI platforms require various technologies, including Deep Machine Learning and Natural Language Processing (NLP), to work together to recognise speech and text inputs, replicate human interactions and deliver intelligent conversational flows.

What is a chatbot platform?

Rule-based and AI chatbots are the two main types of chatbot platforms used today.

Rule-based chatbots

Also known as script-based chatbots, they are ideal for answering Frequently asked questions (FAQs) and addressing basic customer queries through messaging apps or website chat interfaces. They are the most common type of chatbot available in the market.

Rule-based chatbots function according to predefined rules and workflows, much like automated phone menus where users must choose from various options to find the information they require. However, they cannot answer questions beyond the scope of what was programmed. Similar to a flowchart, rule-based chatbots map out conversations and responses in anticipation of what a user might ask. (If the customer asks for “A”, respond with “B”)

Chatbot Overview

AI Chatbots

Artificial intelligence (AI)-based chatbots and virtual assistants analyse questions using natural language processing and machine learning to determine their context, intent and sentiment before formulating a response. Contrary to rule-based chatbots, which are limited to queries that fall within their predefined parameters, AI chatbots can continuously learn from user interactions and respond to complex questions in a human-like manner.

What is a Conversational AI platform?

It refers to a branch of Artificial Intelligence technologies that rely on Natural Language Processing (NLP), Natural Language Understanding (NLU), Deep Machine Learning (ML) algorithms, and Predictive Analytics to analyse and respond better to speech and text inputs in a human-like way. Simply put, conversational AI is the mind that directs the actions of a chatbot or a virtual assistant.

Unlike chatbots, it is capable of performing more complex tasks, such as:

  • Analysing large volumes of structured and unstructured data sets.
  • Automating Routine Administrative Tasks
  • Identifying Patterns in user queries using intelligent deep search
  • Determining the intent behind user queries using NLP
  • Delivering less constrained, personalised support experiences for users with intelligent interactions

68% of customers believe that AI bots provide quick solutions.

Conversational AI platforms, such as Galvia, go beyond simple chatbot responses by stepping up and taking care of less intensive routine tasks, for example: dealing with cancellations, upgrading plans, preparing reports, triggering alerts and reminders – giving employees and teams the freedom to focus on more higher-level, complex activities that matter. Book a demo here to see for yourself!

How are they related?

From what we have learned above, Chatbots are a type of Conversational AI technology, but not all chatbots use Conversational AI. Traditional rule-based chatbots can only perform a limited number of pre-determined tasks and are not powered by Conversational AI.

Conversational AI enhances the chatbot’s ability to understand human language more accurately and provide tailored user interactions.

Which solution is better suited for your organisation?

The answer to this depends on your individual business goals and requirements. A typical chatbot would provide a straightforward way to address frequently asked questions from your students or clients. However, Conversational AI platforms are the best option for you if you’re considering the broader picture and want to increase customer satisfaction, increase student/employee engagement, decrease employee workload, and receive real-time insights into user sentiment.

Getting Started

As innovations in Artificial Intelligence, Machine Learning, and Natural Language Understanding further advance, Conversational AI will continue to evolve and become more sophisticated. However, developing a solution in-house can be both expensive and time-consuming. This is why we recommend partnering with the right AI solution provider to build tailored AI-powered chatbots and deliver hyper-personalised conversations.

Trusted by industry-leading clients, Galvia’s next-generation conversational AI platform allows businesses to create and deploy Smart, affordable, low-code AI-powered chatbots fully customised to your requirements and can be quickly deployed on-cloud or on-premise.

Sign up for a free demo of our Conversational AI platform and deliver meaningful engagements while unlocking business growth.

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