Internet & Tech

Automatic for the people

Chatbots are starting to take on more customer service roles


One of Xiao-i’s chatbots

Call centres rarely muster much enthusiasm among their customers, but they wouldn’t have been possible without breakthroughs in automatic call distribution and touch-tone dialling in the 196os and 1970s. Now the industry is poised for another revolution, this time in the way that artificial intelligence (AI) is reshaping the handling of customer queries.

The premise is that advances in AI are allowing chatbots to respond more effectively to enquiries and are expanding their reach in customer service roles.

Last November China’s retailers slugged it out for a share of the Rmb213.5 billion ($31 billion) bonanza generated by Singles’ Day. But one of the less-remarked on trends was that chatbots were manning more of the e-commerce sites.

The AI-powered customer service chatbot at Alibaba is called Xiao-mi (meaning “little sweetie” – as distinct from the better known tech firm Xiaomi, whose Chinese characters translate as ‘little rice’) and the company said that 50 million customers talked with it over Singles’ Day, with the chatbot handling 83,000 enquiries a minute during peak usage.

To meet the same demand, nearly 700,000 call centre staff would have been required, Alibaba claimed.

Retailers aren’t the only businesses increasing their reliance on such ‘bots’. Lenders have been deploying them more for a while too, especially since 2012 when the government ordered state banks to improve satisfaction levels among disgruntled customers (the then prime minister, Wen Jiabao, accused the major lenders of making monopoly profits while offering poor service to the public; see WiC163).

In other financial hubs such as Hong Kong and Singapore, bank clients that call customer service typically run through a long menu of tap-in options before encountering a human voice.

But in China they are more likely to be greeted immediately, although in this case probably by the voice of an AI-powered robot, says Digfin, a specialist site for fintech news.

In order to make these chatbots sound more human, banks are branding them with distinct persona. China Construction Bank’s Xiao-wei is a 27 year-old woman whose favourite books are Pride and Prejudice and Jane Eyre (in a nice touch, her programmers have made sure she is still waiting to meet her true love, a bit like Elizabeth Bennet and Jane, the main characters in the novels).

Going further is China Tai Ping Insurance, which has just launched the country’s first staffless branch in Sichuan, manned by a robot called Xiao-zhi (chatbots working in the insurance sector pick out policy options for customers by running through metrics such as the gender, age, income and health habits of the applicant).

Up to 80% of the chatbots deployed by the leading Chinese financial services firms are said to have been developed by a company called Xiao-i, which launched its first chatbot in 2004 – seven years ahead of Apple’s Siri. In fact, the company’s parent Zhizhen Network took Apple to court in China for patent infringement. The case is awaiting a hearing at the Supreme People’s Court.

Xiao-i’s other major clients include the big three telecoms carriers, Xiaomi, Huawei, and HSBC in Hong Kong.

The previously low-profile firm may make more headlines in the months ahead: besides the pending lawsuit, it is also planning to go public in Hong Kong, according to Apple Daily. However, investors may need more convincing on its revenue model. Xiao-i delisted from the National Equities Exchange and Quotations Board last year due to insufficient revenues, Digfin reported, and Apple Daily says that Xiao-i made sales of only Rmb300 million in 2017.

Perhaps that suggests that call centre staff shouldn’t be too terrified by competition from the chatbots. Xiao-i also explains that the bots still need to be trained by human staff, and that they are programmed to ask for help if they get a question outside of their previous experience.

Sometimes they aren’t very reliable, either. Two years ago there were reports that Tencent had ditched two chatbots from its messenger apps. Tasked with talking to users about lighter things like the weather and horoscopes, they had suddenly gone rogue, making derogatory comments about the Chinese government…


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