We’re halfway through 2025, and if there’s one thing the year has made clear — conversational AI isn’t just a trend. It’s infrastructure.

From text-based chatbots to voice-first agents that understand, respond, and act autonomously, conversational AI is now embedded across industries — quietly powering customer support, sales, internal workflows, and more. And as we move toward 2026, the next wave of innovation is already taking shape.

The global demand is fuelled by a few undeniable shifts:

• Customers expect 24/7, human-like conversations — across channels.

• Businesses are automating repetitive queries to free up human teams for complex cases.

• And generative AI is making conversations smarter, more context-aware, and more emotionally attuned.

According to global forecasts, the conversational AI market is set to grow substantially — spanning managed services, voice-first agents, hybrid deployments, and multimodal interfaces. Whether it’s a banking assistant that helps users transfer money via voice or an eCommerce bot that remembers your past orders and tone, the use cases are expanding — and fast.

In this blog, we’ll unpack the latest trends, use cases, and forecasts shaping the conversational AI space in 2025 and what businesses can expect heading into 2026.

Let’s dive in.

What Trends Can You Expect in Conversational AI in 2023 and Beyond?

The Merge Between Generative AI and Conversational AI

AI is abuzz with excitement about the possibilities of combining Conversational AI and Generative AI. We uncover a number of compelling benefits as we explore this uncharted territory, including the following:

• elevated levels of creativity
• superior personalisation, and
• enhanced efficiency. 

The possibilities are endless, and we can only anticipate the combination of Generative AI and Conversational AI to be the next big thing in the realm of AI trends. 

Trends in Conversational AI: What 2025 Tells Us About the Road Ahead

As we step into the second half of 2025, it’s clear that conversational AI isn’t just maturing—it’s multiplying. From how businesses deploy these systems to the kinds of interactions customers expect, several key shifts are reshaping the landscape.

1. Solutions Lead the Pack

Within the conversational AI ecosystem, the solutions segment—which includes advanced AI chatbots, virtual assistants, and automation platforms—holds the lion’s share of the market. Why? Because businesses are investing heavily in internal deployment to streamline customer support, automate FAQs, and enable always-on service. Features like OpenAI’s GPT Mentions, launched in 2024, are making it easier to embed intelligent agents directly into existing workflows.

These solutions aren’t just supporting—they’re actively resolving customer issues, thanks to integrated data, robust APIs, and generative AI capabilities.

2. Chatbots Dominate… but IVAs Are Catching Up

Chatbots remain the most widely adopted form of conversational AI in 2025, thanks to their rapid evolution in natural language understanding and their expanding use cases across eCommerce, BFSI, and telecom. However, intelligent virtual assistants (IVAs) are gaining ground fast, driven by generative AI and the ability to execute more complex, multi-turn conversations. Expect IVAs to lead the charge in proactive service and task automation in the coming years.

3. Cloud Deployments Take Centre Stage

The shift to the cloud is accelerating. Businesses prefer cloud-based conversational AI platforms for their scalability, lower maintenance costs, and frequent updates. These systems are often the first to roll out advanced machine learning and NLP features. Cloud deployment not only speeds up integration but also makes it easier to experiment with new use cases across marketing, support, and sales.

4. Text Is Still King—But Voice Is Rising Fast

Text-based bots remain the default across most industries due to their ease of use and platform compatibility. But the voice-based segment is clocking the fastest growth rate, fuelled by advancements in ASR (automatic speech recognition) and growing consumer preference for hands-free, conversational experiences.

Voice AI is especially critical in sectors like healthcare, banking, and customer care, where speed and clarity matter. Multimodal bots—those that combine voice, text, and even visual inputs—are beginning to bridge these interactions more fluidly.

5. NLP Tops the Technology Stack

Among core technologies, natural language processing (NLP) continues to dominate, helping bots parse meaning, detect emotion, and respond contextually. However, automatic speech recognition (ASR) is the fastest climber in terms of growth, particularly in voice-led journeys where understanding diverse speech patterns and accents is critical. Machine learning and deep learning remain foundational, especially as bots learn and adapt from every interaction.

6. Retail & eCommerce Lead Industry Adoption

In terms of industry use, retail and eCommerce remain the heaviest adopters of conversational AI in 2025. Whether it’s handling order queries, sending proactive notifications, or offering personalised product suggestions—AI chatbots are directly influencing purchase decisions and improving retention. Other high-growth sectors include healthcare, telecom, and banking, all of which demand high-volume, always-on support.

7. Large Enterprises Dominate, But SMEs Catching Up

While large enterprises hold the majority market share due to their resources and complex needs, SMEs are growing rapidly. With the rise of no-code and low-code platforms, small businesses now have affordable access to tools that previously required enterprise-scale investment. Expect this trend to reshape AI adoption in the mid-market.

8. North America Leads the Way

Geographically, North America continues to lead the global conversational AI market. With a mature tech ecosystem, strong venture capital presence, and a customer base that expects instant digital support, the region accounts for over a quarter of global revenue. However, Asia and MENA are closing in, driven by mobile-first users and government investments in AI infrastructure.

Trends Across Industries

BFSI

Chatbots equipped with conversational AI can transform how customers interact with banks, providing tailored support for…

• account management
• transaction inquiries, and 
• loan applications.

Conversational AI is also predicted to team up with biometric authentication technologies to ensure robust security measures, thwarting fraudsters at every turn.

Real Estate

We can estimate that Conversational AI will provide customers with a more engaging property search experience, using machine learning to recommend ideal properties based on customer preferences.

Conversational AI might also enable virtual property tours and streamlined virtual transactions, taking customer service to new heights.

eCommerce

Conversational AI-powered chatbots are all set to revolutionise online shopping by providing personalised customer service and support, including real-time order tracking and hassle-free returns.

Conversational AI will also simplify voice-based purchases and payments, making shopping a breeze for customers. 

EdTech

Conversational AI-powered chatbots are predicted to deliver personalised student/teacher support, including course registration and scheduling assistance.

Conversational AI might also be able to analyse student-teacher performance and learning style to provide tailored study recommendations and content.

Retail

Chatbots equipped with conversational AI will provide a more personalised shopping experience, offering product recommendations, reviews, and purchasing advice.

Conversational AI will take virtual styling to new heights and enable voice-based purchasing and payments, simplifying the shopping experience and increasing customer satisfaction.

Conversational AI Predictions – What Do The Numbers Say?

1. The conversational AI market was valued at USD 11.58 billion in 2024 and is expected to grow to USD 41.39 billion by 2030, expanding at a compound annual growth rate (CAGR) of 23.7% between 2025 and 2030. (Grandviewresearch)

2. North America is projected to lead the conversational AI market in 2024, contributing 26.1% to the global revenue share.

3. Within the region, the U.S. maintained a dominant position in the conversational AI landscape throughout 2024.

4. Based on components, solutions accounted for the largest share of the global conversational AI revenue in 2024, contributing 61.1%.

5. Among the different types, chatbots emerged as the top segment in 2024, capturing a significant portion of market revenue.

6. In terms of deployment, on-premises solutions held the majority share of the global market in 2024.

2. Brace yourself for the AI revolution as the global AI market is set to reach new heights, projected to hit a staggering $308 billion by 2026. The compound annual growth rate of 39.7% from 2020 to 2026 is a clear indication that the potential of AI is unstoppable. (marketsandmarkets)

3. With the highest adoption rates expected in the healthcare, finance, and manufacturing sectors, the adoption rate of AI is set to soar to 60% in 2025. As the world becomes increasingly digitised, AI adoption is becoming essential for businesses across all industries. (marketsandmarkets)

4. Get ready to witness a revolutionary change in contact centres as conversational artificial intelligence (AI) deployments are set to reduce agent labour costs by a whopping $80 billion by 2026, according to Gartner. Inc. (Gartner)

5. The future of customer support interactions is here, as chatbots are projected to perform 17.85% of them. As AI technology becomes more sophisticated, businesses can look forward to significant cost savings and greater efficiency. (Gartner)

6. AI-powered chatbots are the future of customer service, sales, and marketing applications, with a staggering projected revenue of $9.4 billion by 2024. As businesses seek to remain competitive in an ever-changing landscape, AI chatbots provide a powerful tool to enhance the customer experience. (prnewswire)

7. With 23% of customer service organisations already using AI chatbots as their preferred brand communication channel, the potential of AI chatbots is becoming increasingly evident. Businesses can look forward to improved efficiency, enhanced customer satisfaction, and greater cost savings with the integration of AI chatbots. (Salesforce)

8. With the advent of AI chatbots, brace yourself for reduced customer service costs by up to 30%. As businesses look for ways to optimize their operations and cut costs, AI chatbots provide a powerful solution to help achieve this objective. (IBM)

9. As customer expectations continue to evolve, AI chatbots that provide 24/7 service are becoming increasingly popular. In fact, 64% of consumers consider 24/7 service to be the most helpful chatbot functionality. As businesses seek to provide exceptional customer experiences, AI chatbots that provide round-the-clock service will become essential. (The Chatbot)

10. The future looks bright for the chatbot market, with projected revenue of $454.8 million by 2027, up from $40.9 million in 2018. As AI technology continues to evolve, businesses across all industries can look forward to integrating AI chatbots to improve their operations and provide better customer experiences. (Statistica)

Emerging Trends in Conversational AI: What’s Happening in 2025 and What to Expect in 2026

While 2025 showed us where conversational AI is thriving, 2026 will be about where it’s going next. From richer interactions to more human-like conversations, the upcoming year promises innovation shaped by real business needs and user behaviour.

1. Hyper-Personalisation at Scale

In 2026, users won’t just want bots that respond—they’ll expect bots that remember. Hyper-personalisation uses real-time data, browsing behaviour, CRM history, and even previous support queries to craft responses that feel tailored to the individual.

Imagine a user asking a banking chatbot for investment advice. Instead of a generic response, the bot recalls their last query, understands their portfolio type, and tailors recommendations accordingly. That’s the level of intelligence businesses will need to stay relevant.

2. Multimodal Experiences

Text-only bots are quickly giving way to multimodal conversational AI—where voice, visuals, text, and even gestures come together. This flexibility creates more immersive, intuitive experiences across industries.

For example, a telecom customer could describe a connectivity issue verbally, upload a screenshot for clarity, and get an instant solution—all within one seamless chat window. In 2026, multimodal interfaces won’t be a “nice-to-have”—they’ll be standard in high-touch services like healthcare and utilities.

3. Emotionally Intelligent AI

Emotion recognition is becoming central to AI conversations. In 2026, emotionally aware bots will be able to detect frustration, urgency, or satisfaction based on tone, punctuation, or choice of words.

Picture a user angrily typing “I’ve already reported this twice!!” A bot trained in sentiment analysis could instantly recognise distress, switch to an empathetic tone, and escalate to a live agent, without waiting for the customer to ask. This not only improves resolution but builds trust through thoughtful interaction.

4. No-Code Platforms Democratising AI

The barrier to entry for building smart bots is dropping fast. With no-code platforms, marketing managers, support leads, and even educators can create conversational flows, update bot content, and test new use cases—without relying on IT teams.

In 2026, this democratisation will mean faster deployments, faster learning cycles, and more agile customer experiences. Businesses can go from idea to AI assistant in days, not months.

5. Ethics, Privacy, and Governance Take Centre Stage

As bots get smarter and more autonomous, the risks grow too. Hallucinations in generative models, biased language, and unclear data practices can break customer trust overnight.

In 2026, AI governance will be a defining factor in which platforms survive. Organisations will need to actively monitor how bots are trained, where data comes from, and how it’s stored and processed. Transparent AI, explainable responses, and user opt-ins will move from best practice to basic compliance.

Other Key Trends Shaping 2026:

• Agentic AI: Bots making autonomous decisions, like rebooking a missed flight or offering compensation proactively.

• Proactive AI: Bots that initiate helpful actions based on context (e.g. reminding customers of expiring subscriptions).

• AI Voice Surge: With speech tech improving, expect wider adoption of voice bots in retail, finance, and transportation.

• AI + Human Collaboration (Cobots): Not replacing agents—but supporting them. Bots doing the heavy lifting, agents stepping in for nuance.

Exploring the Limitless Future of Conversational AI with Verloop.io

As we gaze into the future of Conversational AI, the possibilities seem limitless, and we have only just begun to uncover its true potential. Thanks to the latest advancements in generative AI, we can anticipate even greater levels of efficiency and performance from this groundbreaking technology.

One shining example of this is Verloop.io, which has ingeniously combined Conversational AI and Generative AI in its customer support platform, resulting in exceptional support experiences.

If you’re curious about this exciting development, schedule a demo with us today to uncover more! 

Frequently Asked Questions (FAQs)

1. What is conversational AI, and how is it different from a chatbot?

Conversational AI is the broader technology that powers natural, human-like conversations through text or speech. Chatbots are a type of conversational AI—often used for specific tasks—whereas conversational AI also includes voice assistants, generative agents, and multimodal virtual assistants.

2. Which industries will benefit most from conversational AI in 2026?

Retail, BFSI (Banking, Financial Services, and Insurance), healthcare, telecom, and education are expected to lead adoption. Each is investing in AI to streamline support, improve engagement, and offer personalised customer experiences at scale.

3. Will voice AI finally overtake text-based bots?

Voice-based interactions are set to grow rapidly—especially in regions like MENA and APAC—driven by better speech recognition and low-latency technologies. However, text-based bots will still dominate in high-volume scenarios like e-commerce and internal support.

4. What’s the difference between chatbots, intelligent virtual assistants (IVA), and generative AI agents?

• Chatbots handle predefined tasks using rule-based or basic NLP.

• IVAs offer more advanced conversational flows with memory and context.

• Generative AI agents can adapt, generate human-like responses, and make autonomous decisions based on live data.

5. How secure is conversational AI, especially with rising concerns about data privacy?

Security depends on the platform and implementation. In 2026, businesses will need to prioritise AI governance—ensuring ethical training data, consent-driven data collection, and compliance with regulations like GDPR and DPDPA.

6. Can small and medium businesses (SMBs) afford to implement conversational AI?

Yes. With the rise of cloud-based and no-code AI platforms, SMBs can deploy smart conversational agents without heavy infrastructure costs. Many platforms now offer scalable, pay-as-you-grow models tailored to smaller teams.

7. What does the future hold for generative AI in customer conversations?

Generative AI will enable more adaptive, personalised, and context-aware interactions. But it also brings risks—like hallucinated responses or inconsistent tone—which is why brand training, tone control, and safety nets (like agent handoff) will remain critical.

8. Will humans still be needed in customer support if AI keeps improving?

Absolutely. AI will handle routine, repetitive queries. But complex, emotional, or sensitive situations still need human empathy and judgement. The future is hybrid—where AI assists, and humans elevate the experience.