The researchers have made significant progress during the recent years to investigate the nonlinear optical (NLO) response of various materials. The third-order nonlinear optical susceptibility effects are intensity dependent which include the nonlinear refractive index, n(2), and the nonlinear absorption coefficient, alpha(2), values of the materials. This intensity-dependent phenomenon has several potential applications in the laser detectors, the all-optical switching (AOS) and the optical limiting devices. In order to decide the best materials for the AOS applications, the figure-of-merit (FOM) is an important parameter which is the ratio of the nonlinear refractive index and the absorption coefficient. Nevertheless, the main problem in the case of the AOS signal comes from fact that the transmitted signal is relatively low which inhibits the faster switching speed and also results in the incomplete switch-off state of the AOS device. In the present article, we review the materials which exhibit the high value of the third-order nonlinear susceptibility and their applications for variety of the optical devices with a special emphasis to the various types of the AOS techniques based on different physical principles. We propose that the high-FOM materials in combination with a Mach-Zehnder interferometry AOS experimental configuration can increase the transmission signal which improves the contrast and the switching speed. Moreover, we extend the practical applications by the incorporation of the high-FOM material in a slot waveguide geometry to obtain high switching speed. The unsolved problem of obtaining high transmission signal and the phase change of pi in the AOS device is discussed which can be further utilized for the telecommunication wavelength applications.