Business
Will AI mean the end of call centres?
Jane WakefieldTechnology reporter
Getty ImagesAsk ChatGPT whether AI will replace humans in the customer service industry, and it will offer a diplomatic answer, the summary of which is “they will work side by side”.
Humans though, are not so optimistic.
Last year, the chief executive of Indian technology firm Tata Consultancy Services, K Krithivasan, told the Financial Times that AI may soon mean that there is “minimal need” for call centres in Asia.
Meanwhile, AI will autonomously resolve 80% of common customer service issues by 2029, predicts business and technology research firm Gartner.
There is currently a lot of hype around “AI agents”. That is the term given to AI systems that can operate more autonomously and make decisions.
They could turbo-charge current non-AI chatbots, known as “rule-based chatbots”, which can only answer a set list of questions.
My own recent experience with parcel delivery firm Evri’s chatbot illustrates the existing, non-AI state of play.
My parcel had not arrived, and Ezra (the name of the chatbot), offered to “get this resolved straight away”.
It asked for a tracking reference, and after I had typed that in, it told me that my parcel had been delivered.
I could request proof of delivery, and when I did so it showed me a photo of the package… at the wrong front door. And there was no option to advance the conversation after this “evidence” was shown.
In response, Evri tells the BBC it is investing £57m to further improve the service.
“Our intelligent chat facility uses tracking data to suggest the most helpful responses and ensure the customer’s parcel is delivered as soon as possible, if this has not happened as scheduled,” it says.
“Our data confirms the vast majority of people get the answers they need from our chat facility, first time, within seconds. We’re always reviewing feedback to ensure our services are as helpful as possible, and we continue to make enhancements on a rolling basis.”
On the flipside, rival parcel delivery firm DPD had to disable its less rule-bound AI chatbot after it criticised the company and swore at users.
Getty ImagesGetting the balance right between being on brand and genuinely helping customers is a tricky one for businesses to grapple with as they migrate to AI.
Some 85% of customer service leaders are exploring, piloting or deploying AI chatbots, according to Gartner. But it also found that only 20% of such projects are fully meeting expectations.
“You can have a much more natural conversation with AI,” says Garner 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.”
Resources and money are among the key reasons businesses may be considering the move from human to AI customer service. But Ms Potosky points out that it isn’t a given that AI will be cheaper than human agents.
“This is a very expensive technology,” she says.
The first thing that any business wanting to replace humans with AI will have to do is ensure that they have extensive training data.
“There’s this idea that knowledge management becomes less important because generative AI can solve the fact that their knowledge is not particularly well organised, but actually the opposite is the case,” adds Ms Potosky.
“Knowledge management is more important when deploying generative AI.”
Joe Inzerillo, chief digital officer at software giant Salesforce, tells the BBC that call centres provide fertile training grounds for AIs, particularly ones that have been moved to low-cost areas such as the Philippines and India.
This is because a lot of staff training will have been done, which the AI can also learn from.
“You have a huge amount of documentation, and that’s all really great stuff for the AI to have when it is going to take over that first line of defence,” he says.
Salesforce’s AI-powered customer service platform, AgentForce, is currently being used by a range of customers from Formula 1, to insurance firm Prudential, restaurant-booking website Open Table, and social media site Reddit.
Mr Inzerillo says that when Salesforce first put the platform through its paces it learned some valuable lessons about how to make the AI seem more human-like.
“While a human might say ‘sorry to hear that’, the agent just opened a ticket,” says Mr Inzerillo.
So the AI was trained to show more sympathy, especially when a customer has a problem.
Salesforce also found that not allowing the agent to talk about competitors proved problematic.
“This backfired when customers asked legitimate questions about integrating Microsoft Teams with Salesforce,” says Mr Inzerillo. “The agent refused to help because Microsoft appeared on our competitor list.”
The firm subsequently replaced that rigid rule.
Salesforce has ambitious plans for the continuing rollout of its AI agents, and so far it claims that they are a hit with its customers. It also says that the vast majority of customers, 94%, are choosing to interact with AI agents when given the option.
“We’ve seen customer satisfaction rates that are in excess of what people get with humans – then AI can unlock the next level of customer service,” says Mr Inzerillo.
It has also meant that the firm has cut customer service costs by $100m, but he was keen to play down recent headlines that suggest this has led to 4,000 jobs being slashed.
“A very large percentage of those people got redeployed in other areas around customer service.”
Fiona ColemanFiona Coleman runs QStory, a firm which is using AI to offer human call centre workers more flexibility in their shift patterns. Its customers include eBay and NatWest.
While she sees the value in AI improving working conditions, she is not sure 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 what it looks like in five years’ time – whether an AI can do a mortgage application, or talk about a debt problem. Let’s see whether the AI has got empathetic enough.”
The use of AI in customer service could, in fact, already be facing a backlash.
Legislation currently proposed in the US to move off-shore call centres back to America also requires businesses to disclose the use of AI, and transfer a caller to a human if asked to do so.
Meanwhile, Gartner predicted that by 2028 the EU may mandate what is called ‘the right to talk to a human” as part of its consumer protection rules.
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In 2025, a sweeping set of reforms by the Pension Fund Regulatory and Development Authority (PFRDA) has been announced to make NPS more attractive, flexible, and investor-friendly.
Non-government subscribers with an NPS corpus of more than Rs 12 lakh can now withdraw up to 80% of their savings as a lump sum, with only 20% mandatorily allocated to an annuity.
The National Pension System (NPS) has been largely used for tax savings. In 2025, a sweeping set of reforms by the Pension Fund Regulatory and Development Authority (PFRDA) has been announced to make NPS more attractive, flexible, and investor-friendly.
Here’s a simple breakdown of what has changed.
Higher lump-sum withdrawals at retirement
One of the most significant changes is the higher cash withdrawal limit. Non-government subscribers with an NPS corpus of more than Rs 12 lakh can now withdraw up to 80% of their savings as a lump sum, with only 20% mandatorily allocated to an annuity. Earlier, 40% had to be annuitised, a provision that often reduced post-retirement returns.
New withdrawal slabs for smaller NPS corpus
PFRDA has introduced a new withdrawal framework based on corpus size, offering greater flexibility to investors with lower balances.
Subscribers with a corpus below Rs 8 lakh can withdraw 100% of the amount as a lump sum. Those with a corpus between Rs 8 lakh and Rs 12 lakh can choose between phased withdrawals using Systematic Unit Redemption (SUR), partial lump-sum withdrawal combined with annuity purchase, or higher lump-sum withdrawal depending on subscriber category.
Systematic Unit Redemption (SUR) introduced
A key structural reform is the introduction of Systematic Unit Redemption, which allows subscribers to withdraw their NPS corpus gradually over a minimum period of six years. This enables a steady post-retirement income stream without locking funds into an annuity.
Investment age limit extended to 85 years
Subscribers can now remain invested in NPS until 85 years of age, up from the earlier limit of 75. This benefits investors who want to delay withdrawals or continue compounding their retirement corpus beyond the traditional retirement age of 60.
More flexibility in partial withdrawals
Before turning 60, NPS subscribers can now make up to four partial withdrawals, compared with three earlier, with a minimum gap of four years. Withdrawals of up to 25% of own contributions are allowed for specified purposes such as education, marriage, home purchase and medical emergencies.
After 60, subscribers who continue investing can make partial withdrawals with a minimum gap of three years between transactions.
Multiple schemes under one NPS account
Non-government subscribers can now hold multiple schemes under a single PRAN, allowing them to diversify across fund managers and investment strategies without opening separate accounts.
100% equity option for long-term investors
From October 2025, private, corporate and self-employed subscribers can invest up to 100% in equities under the Multiple Scheme Framework, up from the earlier cap of 75%. This option is designed for younger investors with long time horizons who can tolerate higher volatility.
Switching between MSF schemes, however, is restricted for the first 15 years or until age 60.
NPS can now invest in gold, REITs and IPOs
NPS equity schemes are now permitted to invest in gold and silver ETFs, REITs, equity AIFs and IPOs. The combined exposure to these assets is capped at 5% of the equity allocation, offering diversification without excessive risk.
Scheme A discontinued: What subscribers must do
Subscribers invested in Scheme A, which focused on alternative assets such as infrastructure, must switch to Scheme C or Scheme E by December 25, 2025. The scheme is being phased out due to low participation and liquidity challenges.
Other investor-friendly changes
Several additional reforms have further improved NPS attractiveness. These include removal of the five-year lock-in for non-government subscribers, permission to pledge NPS corpus to obtain loans (up to 25% of own contributions), and enhanced tax benefits for NPS Vatsalya contributions under Section 80CCD(1B).
Clearer exit and family protection rules
Exit rules have also been streamlined. Subscribers who renounce Indian citizenship can withdraw their entire corpus. In the event of death, nominees or legal heirs receive 100% of the corpus if no annuity has been purchased. Interim relief provisions have also been introduced for cases where a subscriber is legally declared missing.
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December 19, 2025, 16:15 IST
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Business
India’s Net Direct Tax Collection Rises 8% To Rs 17.04 Lakh Crore On Higher Corporate Tax Mop-Up
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Net corporate tax collection during the period (April 1, 2025, to December 17, 2025) stands at about Rs 8.17 lakh crore, up from Rs 7.39 lakh crore in the same period of FY25.
India’s gross direct tax collection, before adjusting refunds, stood at over Rs 20.01 lakh crore so far this fiscal year, a 4.16 per cent growth over the year-ago period.
India’s net direct tax collection has increased 8 per cent to over Rs 17.04 lakh crore in the ongoing financial year so far, on higher corporate tax mop-up. Net corporate tax collection during the period (April 1, 2025, to December 17, 2025) stood at about Rs 8.17 lakh crore, up from Rs 7.39 lakh crore in the same period of FY25.
Refund issuances fell 13.52 per cent to over Rs 2.97 lakh crore between April 1 and December 17.
The country’s non-corporate tax, including individuals and HUFs, mop-up so far this fiscal year stood around Rs 8.46 lakh crore, up from about Rs 7.96 lakh crore in the same period last year.
Securities Transaction Tax (STT) collection stood at Rs 40,194.77 crore so far this fiscal year, marginally higher than Rs 40,114.02 crore in the year-ago period.
India’s gross direct tax collection, before adjusting refunds, stood at over Rs 20.01 lakh crore so far this fiscal year, a 4.16 per cent growth over the year-ago period.
In the current fiscal year, the government has projected its direct tax collection at Rs 25.20 lakh crore, up 12.7 per cent year-on-year. The government aims to collect Rs 78,000 crore from STT in FY26.
Rohinton Sidhwa, partner at Deloitte India, said, “Tax refunds issuance has dropped much below last year, while overall tax collection has grown marginally at 4%. The drop in refunds is being attributed to a higher amount of screening of any fraudulent refund claims. Holding back refunds also accelerates litigation that the tax department can ill afford. Overall, the corporate advance tax increase signals good corporate earnings. Non- corporate advance tax collections have, however, declined possibly on the back of rate cuts for individuals given in the previous Budget.”
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December 19, 2025, 12:49 IST
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Borrowing fell last month to its lowest November level for four years but was still higher than expected as figures for the year so far were pushed higher due to the Government’s U-turn on winter fuel payments.
Official figures showed borrowing stood at £11.7 billion last month, £1.9 billion less than in November last year and the lowest for that month since 2021 thanks to a sharp fall in debt interest payments.
But the figure was more than the £10.3 billion expected by most economists and the £8.6 billion forecast in March by the UK’s independent fiscal watchdog, the Office for Budget Responsibility (OBR).
The OBR’s monthly forecasts from the budget on November 26 are not available until mid-January, according to the ONS.
Borrowing for the eight months of the financial year so far was £132.3 billion, £10 billion higher than the same period a year ago and £16.8 billion higher than the OBR forecast in March.
This was partly due to an extra £1.8 billion of spending on winter fuel payments after the Government U-turned on its previous decision to severely restrict payments through means testing, instead opting to give the payout to all pensioners except those earning above £35,000 a year.
This helped drive an upward revision to borrowing for the seven months to October by £3.9 billion.
ONS senior statistician Tom Davies said: “Despite an increase in spending, this month’s borrowing was the lowest November for four years.
“The main reason for the drop from last year was increased receipts from taxes and National Insurance contributions.”
November’s figure was pushed lower thanks to falling debt interest payments on borrowing, down by £200 million year-on-year to £3.4 billion and the lowest November level for six years.
Public sector net debt, including the Bank of England, reached £2.93 trillion at the end of November, which is around 95.6% of gross domestic product (GDP) and 0.3 percentage points more than a year ago, although remains at levels last seen in the early 1960s.
Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics, said there was “very little Christmas cheer for the Chancellor” in the latest borrowing figures.
He added: “Ms Reeves has staked much fiscal credibility on chunky tax increases in the back end of the forecast period. But we think today’s figures further illustrate the shaky foundations of that gamble.
“Revenues continue to underperform, and the smorgasbord approach of tax increases relies on distortionary tax increases with uncertain yields.
“We also have serious doubts about the Government’s ability to follow through on the raft of spending cuts announced in the Budget.”
Chief Secretary to the Treasury James Murray said the debt interest payments underscored the need to bring borrowing down.
He said: “£1 in every £10 we spend goes on debt interest – money that could otherwise be invested in public services.
“That is why last month the Chancellor set out a Budget that delivers on our pledge to cut debt and borrowing.”
Martin Beck at WPI Strategy said “confidence remains the missing ingredient”.
“A clear and credible pro-growth strategy from the Government – and an end to the pervasive gloom surrounding the UK economy – may matter just as much for the public finances as the fine print of future tax and spending plans,” he said.
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NPS Gets A Major Overhaul In 2025: What The New Rules Mean For Your Retirement Money?
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