Bangladesh’s BPO industry faces the AI test

The global business process outsourcing industry is undergoing one of its most significant transformations in decades as companies increasingly deploy generative artificial intelligence (AI) to automate customer service operations, reduce costs and improve productivity.

The shift has altered the dynamics of an industry that for years relied on large workforces handling customer queries, technical support and back-office operations. Many firms are moving away from billing clients based on headcount and working hours towards delivering measurable outcomes, with AI systems now playing a central role in customer interactions.

The transition has raised concerns about the future of millions of service sector jobs worldwide. Yet the impact of AI is proving more complex than a straightforward replacement of workers.

Across the sector, two broad approaches have emerged. 

The first involves autonomous AI systems handling customer interactions with limited human intervention, increasingly used for routine tasks such as billing enquiries, account management and travel requests. Consulting firms, including McKinsey & Company, have projected that generative AI could significantly boost productivity in customer service, and firms have since adopted automation to capture those gains. However, challenges persist in fully replacing human agents, as AI often struggles with empathy, context and nuanced decision-making.

A second model, commonly known as "agent assist", focuses on augmenting rather than replacing human workers. These systems provide customer service representatives with real-time transcripts, automated summaries, knowledge-base recommendations and sentiment analysis tools designed to improve performance during calls.

The debate over automation further intensified following high-profile examples in recent years. In 2024, Klarna, the Swedish fintech company, attracted international attention after highlighting the capabilities of AI in customer service operations. The case became a focal point in wider discussions about the benefits and limitations of automation, particularly as companies sought to balance efficiency gains with customer satisfaction and brand reputation.

Against this backdrop, Bangladesh's BPO sector is pursuing a strategy that industry participants describe as AI-enabled workforce scaling rather than workforce replacement. The country has emerged as a growing outsourcing destination, supported by a large pool of young workers and competitive operating costs.

Local companies are increasingly adopting AI tools that scale employee productivity while preserving human involvement in complex service delivery. This trend has created a vital opening for domestic technology developers. Kothon, a unified enterprise call center suite developed by Vivasoft Ltd., provides an integrated support system for large organisations. Unlike foreign cloud tools, Kothon is designed to run on a company’s own local servers to keep data secure.

“Kothon enables businesses to answer 100 percent of calls instantly with zero wait time. It handles the repetitive inquiries that usually cause agent burnout. This allows human teams to focus on high-value problem solving. By automating 90 percent of routine interactions and providing real-time data for analysis, we help local BPOs stay globally competitive while protecting our national data sovereignty,” said Shafiul Hasan Tareq, Co-founder and CEO of Vivasoft.

While locally developed AI systems and domestic solutions may reduce dependence on foreign technology providers and limit the outflow of foreign currency tied to cloud-based software subscriptions, questions remain about whether they can consistently meet the quality and security standards required in global markets.

Whether the country's strategy can shield the sector from the broader employment disruptions associated with AI remains uncertain. The long-term effects of automation on outsourcing jobs continue to be debated globally, and many analysts expect further restructuring as AI technologies become more sophisticated.

What appears increasingly clear, however, is that the future of the outsourcing industry is likely to depend less on the size of a workforce and more on the ability of companies to combine human expertise with technological capabilities.