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Why Conversational AI Is So Much More Than a Chatbot

ORAI's blog on Chatbots Vs Conversational AI- What's the difference?
Chatbot V/S Conversational AI

Conversational AI vs chatbot can be confusing because, they can both mean the same thing to some people, but they may mean something completely different to others.

These terms are often interchangeable, which is fine up to a point. Their differences are important in business settings and more so overall.

Chatbots are easy to understand for most people, but conversational AI is more complex and technical. This is where differentiation really comes in.

Let us explore the similarities and differences between conversational AI and chatbots.

What is a Chatbot?

Chatbots are software programs that simulate human-like conversations with users via text. Chatbots tend to be rule-based. This means that they can only answer a set of questions (mostly FAQs), which is what distinguishes them from conversational AI. It means the answers are predetermined and there is little room for error during the conversation.

Chatbots are being increasingly used by businesses worldwide to provide user support across multiple channels. Chatbots can be frustrating for users who do not understand the context of conversations.

What is Conversational AI?

Conversational AI differs from chatbots that are pre-determined, and rule-based. Conversational AI uses Natural Language Processing, Natural Language Understanding and Deep Learning to provide a dynamic and more flexible user experience than chatbots.

Conversational AI goes far beyond a conventional chatbot and sets the new standard for the customer experience to deliver a more personalized customer experience while lowering the cost to serve.

A Study predicts that the global Conversational AI market will grow to $32.62 billion by 2030. This is compared to its current value of $5.78billion in 2020.

Conversational AI can respond to text and speech inputs. This technology is used in customer service to interact with customers in a human-like manner. You can interact with the bot through a messaging channel, or via a voice assistant over the phone. Conversational AI uses substantial amounts of training data to help deep learning algorithms understand human language and determine user intent.

Chatbots vs Conversational AI

Automated messaging technology can help brands provide quick customer service, regardless of whether you use chatbots that are rule-based or any other type of conversational AI.

Chatbots can only perform a few functions. This is most often limited to answering basic questions. Conversational AI allows chatbots to interpret human language better and provide more personal, two-way interactions with customers to meet modern customer expectations.

Based on what we know so far, chatbots need conversational AI technology to grow smarter and more powerful. However, not all chatbots employ conversational AI technology.

Chatbot v/s conversational AI


Conversational AI

Basic Chatbot

Natural Language Understanding


Basic keyword recognition

Multichannel/ Omnichannel

Single channel



Machine Learning



Dialog State Management

Integrated Processes/Workflows

Data/System Integration

Simple/limited integration

Identity & Access Management

Security Management

Online 24/7

Dynamic, context-based navigation

Button-focused navigation

Unlimited scalability

Limited improvement capacity

Broad scope

Narrow scope

3rd-party integration support

Limited understanding

Self-improving over time

Consistently high-resolution rates

Entity extraction

User authentication

Voice and conversational IVR

Privacy & security compliant

*Not all these features are necessarily part of a conversational AI solution

Which One is Better for Your Business?

Conversational AI is the best choice if you want to increase user satisfaction, engage users, and reduce human agent workload by automating support across multiple platforms via both voice and text.

Conversational AI agents can automate up to 80% of query resolution without any human intervention.

Benefits of Conversational AI for your Business

  • Understand Human Factor

  • Sentiment Analysis

  • Improve Employee Productivity

  • Enhance service speed

  • Minimize Operating Expenses

  • Better Conversion Ration

  • Easy Scalability

  • Optimal Data Collection

  • Omnichannel Presence

  • Superior Approach to Global Market

Final Thoughts

Chatbots are a fantastic way to get started, especially when you are using text-based communication. However, Conversational AI is the only way to provide real value to customers.

Brands use conversational AI across their channels to provide hyper-personalized conversations for customers in real time.

ORAI is a Conversational AI platform that recognizes the needs and demands of the present market and has devised solutions that smoothen the functioning of a business and accentuate customer relationships.

Swapnil Jain

CEO-ORAI Robotics


Stay in contact with ORAI

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