A mechanism for facilitating customer interactions within a customer service environment provides prompt and accurate answers to customer questions. A smart chat facility for use in a customer service environment to predict a customer problem examines a customer chat transcript to identify customer statements that set forth a customer issue and, responsive to this, can route the customer to an agent, an appropriate FAQ, or can implement a problem specific widget in the customer UI. Customer queries are matched with most correct responses and accumulated knowledge is used to predict a best response to future customer queries. The iterative system thus learns from each customer interaction and can adapt to customer responses over time to improve the accuracy of problem prediction.