Why AI Can't Replace Humans in Customer Service: The Surprising Truth

Armen Kirakosian recalls the frustrations of his early call center days: dealing with angry customers, endlessly searching through menus, and manually writing notes for every call. Now, thanks to artificial intelligence, his job has transformed. At 29, working for TTEC in Athens, Greece, he no longer scribbles notes or clicks through countless screens. Instead, he often has full customer profiles ready when a call comes in, sometimes knowing the issue before saying hello. This allows him to focus more on serving customers effectively.

Kirakosian remarked, "A.I. has taken (the) robot out of us."

In the U.S., roughly 3 million people work in call centers, with millions more globally handling billions of inquiries annually—from iPhone repairs to shoe orders. TTEC provides third-party customer service in 22 countries for industries like autos and banking, helping companies manage extra capacity or outsource operations.

Call center work can be grueling; about half of agents leave within a year, often due to stress and monotony, according to McKinsey. Much of the job involves "break/fix" tasks—solving problems when something is broken, wrong, or confusing. The big question now is who handles these fixes: humans, computers, or humans augmented by AI.

AI has already automated many routine tasks, leading to job losses and predictions of further declines. Some forecasts suggest up to half of call center jobs could disappear in the next decade, but the reality may be less severe. It's becoming clear that humans are still essential, especially for complex issues that require advanced skills.

For example, Klarna, a Swedish finance company, replaced its 700-person customer service team with AI in 2023. While it saved money, customer satisfaction dropped. Klarna later rehired some employees, admitting that AI struggled with issues like identity theft.

Gadi Shamia of Replicant, an AI-software firm, noted, "Our vision of an AI-first contact center, where AI agents handle most conversations and fewer, better-trained human agents support complex tasks, is quickly becoming a reality."

Customer experiences, though improved, aren't perfect. Traditional interactive voice response (IVR) systems—where customers press buttons or say phrases like "sales" or "support"—often lead to frustration. Many customers "zero out" by pressing zero to reach a human, only to face holds and transfers.

In response, U.S. senators have proposed the "Keep Call Centers in America Act," aiming to ensure clear access to human agents and incentivize domestic jobs. Companies are developing smarter systems that understand requests without menus. OpenAI's upcoming "ChatGPT Agent" can handle complex phrases, while Bank of America's chatbot, Erica, debuted in 2018 and has been used 3 billion times. Erica predicts needs, like spotting repeated low balances, and transfers customers seamlessly when needed.

James Bednar of TTEC, who works on improving call experiences, believes AI could eliminate IVR entirely. "We're getting to the point where AI will get you to the right person for your problem without you having to route through those menus," he said.