Global spending on AI-powered contact centres to hit $18.6 bn in 2023: Report

Global spending on contact centres, conversational AI, and virtual assistant services is projected to reach around $18.6 billion in 2023, marking a 16.2% increase compared to the previous year.  

A new report by Gartner predicts that the economic and geopolitical uncertainty in 2023 may lead to budget constraints, resulting in a slowdown of on-premises contact centre replacements and upgrades. Nevertheless, customer-facing projects will remain essential for revenue retention and generation strategies. 

“Near-term investment growth rates for CC and CC conversational AI and virtual assistants are expected to dip as business volatility creates a lengthening of decision cycles,” Megan Marek Fernandez, Director Analyst at Gartner, said. 

Generative AI and conversational AI are expected to drive the replacement of contact centre platforms in the future, as CX leaders seek to enhance customer service efficiency and overall experience, the report said. The global conversational AI and virtual assistant market are experiencing rapid growth, with a projected 24% increase in 2024. 

Gartner estimates that conversational AI is expected to handle approximately 3% of interactions in 2023, but this figure is anticipated to rise to 14% by 2027. As part of a long-term strategy, contact center decision-makers are increasingly investing in conversational AI capabilities to gradually reduce reliance on live agents. 

Although AI is playing an increasingly significant role in customer service interactions, most interactions are currently supported by contact center AI, rather than being entirely handled by virtual agents. 

Another separate report from April 2023 by ResearchAndMarkets projects that the conversational AI market will grow from $10.7 billion in 2023 to $29.8 billion by 2028, with a Compound Annual Growth Rate (CAGR) of 22.6% during the forecast period. 

The report highlights various commercial applications for artificial intelligence (AI) and machine learning. Additionally, the expansion of businesses in Asian countries is expected to strengthen their position in the Conversational AI market, leading to favourable financial outcomes. The integration of predictive analytics technologies and data sources, along with significant advancements in Natural Language Processing (NLP), will enable businesses to extract meaningful insights from real-time conversations in the near future.