Long read: Customer care: How the bot army will shrink the outsourcing pie

Artificial Intelligence is likely to disrupt several enterprise functions and businesses – one that’s already underway is customer care and its outsourced industry. This piece by Shelley Singh in the Mint tracks the development and its implications on the industry and employment.

To be fair, it is not just AI, let alone GenAI, there have been several rounds of disruptions throughout history:

“The world of the contact centre, once manned by an army of humans, has been transformed by technology. With every new technological advance, from interactive voice responses (IVR) almost three decades back to chatbots a decade or so ago, the human army has become a little smaller, and the promise of better engagement between customers and companies has become bigger.”

Customers increasingly seem to be comfortable interacting with a bot than a human:

“HDFC Bank’s artificial intelligence (AI)-driven customer service chatbot is doing much more. Eva, an acronym for Electronic Virtual Assistant, can pull out specific information pertaining to a customer, and even execute tasks such as sharing credit card statements, blocking a lost card, booking an FD and issuing a cheque book. With each customer engagement, Eva learns something new and gets better.

“While customers can choose different modes of contact—touch (in a branch), type (on the website), tap (chat banking on WhatsApp) and talk (call the contact centre and interact with the voice assistant)—we see an increasing preference for digital self care,” said Anjani Rathor, chief digital experience officer, HDFC Bank, pointing at the increase in such interactions. Today, a significant part of the 30 million-plus monthly customer interactions at India’s largest private sector bank are processed by AI/machine learning (ML) solutions, including Eva.”

GenAI seems to be accelerating the adoption by significantly improving the capabilities of these bots:

“…K. Krithivasan, chief executive officer (CEO) of the $30 billion tech services major TCS, said that AI will result in a “minimal” need for call centres within a year. “Chatbots will soon be able to analyse customers’ transaction history and do much of the work done by call centre agents,” he noted.”

This acknowledgement from the boss of India’s largest IT services company (IT services companies have also had large BPO arms running outsourced contact centres) means this disruption is here and now with implications for the industry’s fortunes:

“The outsourced contact centre industry, pegged to be worth $120-130 billion globally at the end of 2023, will contract to $95-105 billion in the next three to four years, according to Everest Group, a research and advisory group specializing in the global services industry.”

This has implications for employment as well:

“Globally, more than 12 million are employed in the industry today, answering customer queries for international as well as local customers. A million or so of them are in India, which has become the world’s call centre thanks to its large population and low costs. The Philippines, with around 1.2 million workers, is another large global contact centre destination.”

The IT services industry will likely face a bigger threat as GenAI has the potential to make human coders redundant at least partially.

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