Will AI Mean the End of Call Centres? Industry Divided on Customer Service Future

TL;DR: Whilst 85% of customer service leaders are exploring AI chatbots, only 20% of projects are meeting expectations. Gartner predicts AI will autonomously resolve 80% of common issues by 2029, but legislative pushback is emerging in the US and EU to protect consumers’ right to speak with humans. Industry leaders remain divided on whether AI can replicate human empathy.

AI Agents Promise Transformation

There is currently significant hype around “AI agents”—autonomous AI systems that can make decisions independently. These could turbo-charge current non-AI chatbots, which are “rule-based” and can only answer predetermined questions.

Last year, K Krithivasan, chief executive of Indian technology firm Tata Consultancy Services, told the Financial Times that AI may soon mean there is “minimal need” for call centres in Asia. Meanwhile, Gartner predicts AI will autonomously resolve 80% of common customer service issues without human intervention by 2029.

Some 85% of customer service leaders are exploring, piloting or deploying AI chatbots, according to Gartner research. However, the firm also found that only 20% of such projects are fully meeting expectations.

Implementation Challenges Mount

“You can have a much more natural conversation with AI,” says Gartner analyst Emily Potosky. “But the downside is the chatbot could hallucinate, it could give you out-of-date information, or tell you completely the wrong thing. For parcel delivery I would say rules-based agents are great because there are only so many permutations of questions about someone’s package.”

Current chatbot limitations are illustrated by BBC reporter Jane Wakefield’s recent experience with parcel delivery firm Evri’s chatbot. After reporting a missing parcel, the chatbot provided a photo of the package at the wrong front door with no option to advance the conversation further.

In response, Evri stated it is investing £57 million to improve its service, noting that “the vast majority of people get the answers they need from our chat facility, first time, within seconds.”

Rival parcel delivery firm DPD had to disable its less constrained AI chatbot after it criticised the company and swore at users, demonstrating the risks of reducing rule-based controls.

Cost Benefits Not Guaranteed

Resources and money are among the key reasons businesses consider moving from human to AI customer service. However, Ms Potosky points out that cost savings are not guaranteed.

“This is a very expensive technology,” she says. Businesses must first ensure they have extensive training data and well-organised knowledge management systems. “Knowledge management is more important when deploying generative AI,” she adds.

Joe Inzerillo, chief digital officer at Salesforce, notes that call centres in low-cost areas like the Philippines and India provide fertile training grounds for AI because of extensive existing documentation.

Salesforce’s AI-powered platform, AgentForce, is currently used by Formula 1, Prudential, Open Table and Reddit. The firm claims 94% of customers choose to interact with AI agents when given the option, with customer satisfaction rates exceeding those for human interactions.

Salesforce has cut customer service costs by $100 million, though Inzerillo was keen to downplay headlines suggesting 4,000 job losses, stating that “a very large percentage of those people got redeployed in other areas around customer service.”

Legislative Backlash Emerges

Fiona Coleman, who runs QStory—a firm using AI to offer call centre workers more flexibility—questions whether the technology can ever replace humans entirely. “There are times where I don’t want to have a digital engagement, and I want to speak to a human,” she says. “Let’s see whether the AI has got empathetic enough.”

The use of AI in customer service could already be facing regulatory pushback. Legislation currently proposed in the United States to move offshore call centres back to America also requires businesses to disclose AI use and transfer callers to humans upon request.

Meanwhile, Gartner predicted that by 2028 the European Union may mandate “the right to talk to a human” as part of its consumer protection rules.

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