Algorithmic Decision Making

This article has been written by Pramod Patil pursuing a Diploma in Content Marketing and Strategy course from Skill Arbitrage.

This article has been edited and published by Shashwat Kaushik.


In today’s world, where there is a limitation on time, we neither get time to solve our problems nor do we get satisfactory solutions, even if we seek support from any human agencies. This leads to our frustration, and we search for a perfect solution to get rid of the issues.

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Chatbots are only the solution to handling our problems. Let’s understand why.

Why chatbots

In our day-to-day work, we come across issues, and we find it difficult to manage these due to multiple reasons, like time constraints, human errors, delays in producing the output, poor quality work and many more. This has made us think and has drawn our attention to the need to make use of intelligent platforms or tools that can help us get the right and quick solution.

As mentioned, chatbots are seen as an upcoming solution for fast, perfect, reliable and good quality support. With the results produced by the chatbots, the outcome achieved is – reduced frustration levels and customer satisfaction.

Let us understand chatbots and AI-driven business:

A chatbot is software that simulates human conversations. It enables communication between a human and a machine, which can take the form of messages or voice commands. A chatbot is designed to work without the assistance of a human operator.

There are two categories of Chatbots. They are as below:

  • Rule-based chatbots:
    These chatbots are programmed to provide the solution based on a limited number of choices made by the customer.
  • AI-based chatbots:
    These chatbots are built on machine learning algorithms that understand the language and provide solutions to open-ended queries.

AI-Driven Business is a business which understands its customers in-depth and provides smart suggestions to meet their needs based on their likes, preferences, history, etc. 

How can chatbots be used for customer support

Considering the challenges faced by customers, chatbots can be looked upon as an ideal solution for customer support, as below:

  • Handling customer service inquiries: Earlier, a customer seeking any service support was heavily dependent on the respective website for raising tickets/requests. Today, chatbots are used in handling customer service inquiries where customers engage with chatbots for their requests and make effective use of self-service options in seeking any solution to their problems.
  • Instant resolution: Before chatbots were introduced, the customers, after raising the request, had to wait for a long time to get the same accomplished. But chatbots are very helpful in providing instant resolution.
  • 24x7x365 support: During odd hours, it was difficult for the customers to get help from customer care personnel. But chatbots are designed to provide 24x7x365 support to their customers.
  • Multilingual support for global business: Till-date, due to language limitations, it has been a great challenge for customers to use global services. But chatbots have successfully overcome this challenge by providing multilingual support. This has enabled customers to use the required global support.
  • Support on multiple channels: Earlier, customers relied only on websites to seek support. But, today, with parallel implementation of the mobile apps, social media, SMS services, etc., chatbots have become equally important in handling customer requests on multiple channels.
  • Dealing with different types of customers: For customers who have a tendency to ask the same question and might not be satisfied with the same answer, chatbots can be used to tailor the answer based on some additional criteria.

Areas of application

Although there are many areas where chatbots can be implemented for customer support. However, below are a few popular areas of application:

Troubleshooting and customer support

As per the survey conducted by Business Insider in 2017, it is understood that 67% of customers used chatbots to get their issues resolved. The different platforms used by chatbots for providing customer support were websites, mobile apps, social media, etc.

Human resource automation

Chatbots are most useful for performing redundant HR tasks such as sourcing candidates, scheduling interviews, providing employee benefits, and so on. This helps HR executives reduce their repetitive tasks and focus more on complex issues.

E-commerce industry support

Per e-commerce statistics, it is estimated that there are 12-24 million e-commerce sites around the globe and chatbots play a very crucial role in supporting their customers. They help in solving queries related to delivery, tracking orders, managing returns and exchanges, recording feedback, providing recommendations to the buyer, helping buyers place orders via a single click, and so on.

Healthcare automation

Chatbots are looked at as immediate assistance to patients seeking treatment from home versus visiting hospitals hospitals/doctors. For both hospitals and patients, chatbots are used in recording patient information and history, scheduling the online consultation, generating appointments for further tests and diagnoses based on the consultation, generating test reports and sharing them with patients, suggesting health care tips, etc.

Growth and marketing

According to a recent HubSpot survey,  47% of customers make use of chatbots before buying any product. These are basically the shopping bots (utility bots) and are used for recommending and shopping for items.

Sales and lead generation

Market research says that 21% of customers say that chatbots are the easiest way to contact a company for product inquiries, which generate leads based on customer preferences. As compared to traditional lead generation tools, chatbots generate 4x leads, which are further helpful in increasing sales and thus revenue growth.

Record keeping reviews and feedback

The outcome of any business is determined by the reviews and feedback provided by its customers. Chatbots play an important role in automating and receiving 100% true reviews and feedback from customers. With chatbots in action, the customers are happy and find it super easy to share their reviews and feedback.

Providing financial advice

Chatbots have an excellent ability to store and process data based on customer earnings and spending patterns. With this ability, they are used in providing financial advice to customers. This feature helps both customers and financial and non-financial organisations create a good rapport.

Social media automation

With an increase in the use of social media by customers, businesses are smartly automating and marketing their products. Chatbots used in social media automation are categorised accordingly – WhatsApp automation, Instagram automation and omnichannel automation.

Industry-based customer experience automation

The success of any industry depends on how well they provide their services to customers. So, a good customer experience is critical for any business to grow and automation in the customer experience has become the most necessary thing.


For customers

The most common questions of the customers are handled directly by the chatbots. There is no need to raise and track tickets for issue resolution. With instant issue resolution using chatbots, the customers are satisfied as it has reduced their wait time to a greater extent and that too by just relaxing at home and without connecting to the customer representative.
In addition, round the clock support (24x7x365) is available with chatbots. One can seek support on any device/platforms like websites, mobile apps, social media, etc.
With the smart recommendations made by chatbots based on accurate and personalised data, it has become super easy for customers to make decisions quickly.

For customer representatives:

One becomes demotivated with the same routine tasks and customer representatives are the ones who face this issue. Chatbots have become a god-gift to such representatives as they can handle 70-80% of commonly asked questions. This has enabled the representative to focus more on the complex issues where human intervention is needed. Reducing repetitive tasks has improved motivation, which has resulted in more productivity and greater efficiency.

For businesses

Chatbots are a boon to businesses as they handle basic customer queries and in addition, they are proven to be cost-effective solutions as they handle multiple interactions simultaneously. This has reduced the need for more customer representatives, which has resulted in saving money to a greater extent.
Businesses can gain easy insights and improve the customer experience. Owners look forward to building a strategy for providing accurate solutions to customers and keeping them engaged. This helps businesses with reduced drop-off rates, increased engagement and higher customer retention. And with a proper strategy in place, it helps them expand their business by increasing their sales through proper channels.
Chatbots can be used across industries like banking, manufacturing, retail and e-commerce, energy and utilities, education, gaming, insurance, telecommunications, automobiles, etc.


Though a chatbot is a revolutionary invention, it cannot be treated as a 100% perfect solution because it does come with some limitations/challenges as follows: 

Dealing with complex issues

Chatbots operate on the data and information available or programmed within. When they encounter any complex query for which the data/information is not available, they either end up providing incorrect solutions or sometimes fail to provide the solution itself.

Sometimes there is a need to provide alternate solutions in dealing with complex issues and chatbots fail to provide alternate solutions to the way they have been programmed.

Lack of empathy

One of the pain points is that machines lack understanding of human emotions and since empathy plays a vital role in human communications, a few customers feel more comfortable talking to customer representatives than dealing with chatbots. This is because they think that humans can only understand their issues and the situation they are dealing with and can handle their concerns properly.

Limited ability to understand human language

For a few user queries, it becomes a challenge for chatbots to respond as they struggle to understand the nuances of language that include slang and sarcasm. With such queries, chatbots can misinterpret, and there is a chance of providing inaccurate solutions. This can lead to customer frustration and damage the business’s reputation.

Chatbot laws in India: a comprehensive overview

In India, there are a number of laws that apply to chatbots. These laws include:

The Information Technology Act of 2000

Enacted in 2000, this landmark legislation serves as the primary legal framework governing information technology in India. It encompasses a wide range of provisions aimed at regulating various aspects of the digital realm, including data protection, cybercrime, and electronic commerce. Key features of the act include:

  1. Data protection: The act recognizes the importance of protecting personal information and establishes guidelines for the collection, storage, and use of sensitive data. It mandates that organizations obtain consent from individuals before processing their personal information and provides individuals with certain rights, such as the right to access and rectify their data.
  2. Cybercrime: The act defines various cybercrimes, including hacking, cyberbullying, and online fraud, and prescribes penalties for such offenses. It establishes specialized cyber cells within law enforcement agencies to investigate and prosecute cybercrimes effectively.
  3. Electronic commerce: The act facilitates electronic commerce by providing legal recognition to electronic contracts and digital signatures. It addresses issues related to online payments, consumer protection, and intellectual property rights in the context of e-commerce transactions.

The Consumer Protection Act of 2019

Passed in 2019, this act seeks to safeguard the rights and interests of consumers in India. It consolidates and amends several existing consumer protection laws to provide a robust framework for consumer protection in the digital age. Key features of the act include:

  1. Unfair trade practices: The act prohibits unfair trade practices, such as misleading advertising, false claims, and deceptive marketing strategies. It empowers consumers to seek redressal in case they fall victim to such practices.
  2. Defective goods and services: The act provides consumers with remedies in cases of defective goods or deficient services. It mandates that manufacturers, sellers, and service providers are responsible for any defects or deficiencies in their products or services and must offer appropriate compensation to consumers.
  3. Consumer disputes redressal: The act establishes a three-tier grievance redressal mechanism, consisting of District Consumer Disputes Redressal Commissions, State Consumer Disputes Redressal Commissions, and the National Consumer Disputes Redressal Commission. Consumers can approach these commissions to seek resolution of their disputes with businesses.

The Personal Data Protection Bill of 2019

Currently under consideration by the Indian Parliament, this bill aims to provide a comprehensive framework for the protection of personal data in India. If enacted, it will significantly impact how organizations collect, use, and disclose personal information. Key features of the bill include:

  1. Consent and notice: The bill requires organizations to obtain explicit consent from individuals before collecting, processing, or disclosing their personal data. It also mandates that organizations provide individuals with clear and concise notice about the purpose of data collection and the manner in which it will be used.
  2. Data minimisation and purpose limitation: The bill promotes the principles of data minimization and purpose limitation, requiring organizations to collect only the personal data necessary for specified purposes and to limit its use to those purposes.
  3. Data security and breach notification: The bill imposes stringent data security obligations on organizations, requiring them to implement appropriate security measures to protect personal data from unauthorized access, use, or disclosure. It also mandates organizations to notify individuals in the event of a data breach.
  4. Rights of individuals: The bill grants individuals several rights with respect to their personal data, including the right to access, rectify, erase, and withdraw consent. It also provides for the establishment of a Data Protection Authority to oversee the implementation of the bill and address complaints related to data protection.

These three laws collectively form the legal framework governing information technology, consumer protection, and data protection in India. They aim to strike a balance between promoting innovation and economic growth in the digital age while safeguarding the rights and interests of individuals in the digital realm.

These laws provide a basic framework for the regulation of chatbots in India. However, there are a number of specific issues that need to be addressed, such as:

  • The liability of chatbot providers for the content generated by their chatbots.
  • The use of chatbots to collect and process personal data.
  • The use of chatbots to make decisions that have a significant impact on individuals.

Laws governing chatbots are still in their early stages of development, but there are a few key principles that are likely to be included in any future regulations.

  • Transparency: Users should be aware that they are interacting with a chatbot, and should be able to easily identify the chatbot’s limitations.
  • Accountability: Chatbots should be held accountable for their actions, just like human beings. This means that chatbots should be programmed to avoid harmful or discriminatory behavior.
  • Privacy: Chatbots should protect users’ privacy by not collecting or storing personal information without the user’s consent.
  • Safety: Chatbots should be designed to be safe for users to interact with. This means that chatbots should not be able to spread misinformation or incite violence.

The Indian government is currently working on developing a specific regulatory framework for chatbots. This framework is likely to address the issues listed above, as well as other issues that may arise in the future.

In addition to the legal framework, there are a number of ethical considerations that need to be taken into account when using chatbots. These considerations include:

  • The need to ensure that chatbots are used in a transparent and accountable manner.
  • The need to respect the privacy of users.
  • The need to avoid bias and discrimination in the design and use of chatbots.

By taking into account both the legal and ethical considerations, businesses can use chatbots in a responsible and ethical manner.


No matter what the business is, chatbots are the right solution for providing customers with accurate and instant support. With a good customer experience, they can prove to be the greatest asset of all time. They can automate every single interaction (text-based and voice-based) and take business success to the next level. As per ChatBot Head of Customer Support: Grzegorz Woźniczko, one chatbot handled 313,406 chats, which is 35% of the total traffic over the last 3 years. This is equivalent to the workload of 10 support agents.

So, it can be concluded by saying that the impact of chatbots on customer support in AI driven businesses is huge. Every single business that is serious about growing should consider deploying chatbots.  



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