Here are my predictions for 2026, which promises to be a defining year in the development of the CX services market.

How the CX services market changed in 2025

In January 2025, I made these predictions for the CX services market:

• Moderate market growth of 3.5–4.5% for 2025, pressured by geopolitical and economic policy changes
• Vendors and clients turning GenAI spend into measurable business results with AI solutions scaling in production
• Agentic AI (fully autonomous, machine-first CX) to be several years away and not materially impacting results in 2025 and 2026
• Vendors having more targeted M&A strategies with smaller capability-driven acquisitions
• Offshoring continuing to expand, boosted by AI-enabled language and voice augmentation
• Financial markets remaining pessimistic about CX services providers, though this overlooks the ongoing need for human-led CX, as well as vendors’ repositioning toward AI-enabled consulting, technology, and managed services.

Looking back at the last twelve months, here’s what happened:

• The global CX Services market for 2025 had a like-for-like revenue growth in the lower +2% to +4% range. Most of the growth came from non-core CX processes such as trust and safety and AI enablement (e.g., TaskUs)
• GenAI deployments reached maturity and scale across talent management, including AI-powered recruitment, simulation training, automated QA, agent assist such as AI summarization, knowledge management, and sentiment analytics (more details in the CXS Transformation Market Assessment 2025)
• Agentic AI continues to be at the pilot stage across contact centers. The current level of technology maturity cannot yet overcome operational, business, and cultural barriers to realize fully autonomous decision-making for CX processes
• M&A activity was relatively muted, with deals prioritizing horizontal capabilities. Examples include:
  • iQor acquiring JumpCrew to expand B2B sales
  • Concentrix acquires SAI Digital to add ecommerce and marketing automation
  • TP acquires Agents Only to expand AI training services
  • TDCX acquires SUPA to expand data annotation services
  • Firstsource acquires Pastdue Credit Solutions to expand U.K. collections
  • Ströer X acquires AMEVIDA to expand sales services in Germany
  • Movate acquires Prescience to grow data science and advanced analytics

The major exception was Capgemini’s acquisition of WNS.

• Offshoring became an AI-driven client strategy where machine translation, accent softening, and voice augmentation are making India, Egypt, and the Philippines a preferred delivery choice with fewer quality considerations
• Public CX services companies' valuation dropped due to AI concerns that have not disappeared. As a countermeasure to fund long-term growth, vendors are eyeing public delisting and majority holder full ownership (e.g., TELUS acquiring all shares of TELUS Digital).

What’s ahead in 2026

Further regulatory and governance pressures

Outsourced CX operations will encounter tighter and more complex regulatory and governance pressures across regions (e.g., Spain’s new customer service law), which will influence offshoring decisions. Compliance requirements will expand in sector-specific areas such as healthcare, government, and defense, including mandates for air-gapped AI deployments. Additionally, priorities around ethical AI, cultural localization, data residency, and sovereign LLMs will grow, raising expectations for AI governance and security (e.g., Tech Mahindra’s Indus project; Telus launching Canada’s sovereign AI factory).

More security and trust & safety investments

AI-based fraud, spoofing, and impersonation risks will only increase, necessitating stronger authentication and verification measures. Vendors will prioritize capabilities in financial crime prevention, KYC/KYB, AML, and trust & safety as these digital risks grow. One route is through partnerships; for example, Sutherland with ComplyAdvantage; TELUS Digital with Qohash; TTEC with VoxEQ. CXS vendors will embed security, privacy, and regulatory compliance directly into solutions rather than add them as afterthoughts. This applies across sectors, extending beyond traditional financial services into ecommerce, healthcare, energy, and public entities.

CX workforce transformation

Talent demand in CX will shift from language skills toward critical thinking, contextual judgment, and complex problem-solving. Organizational structures will flatten, reducing layers of QA and supervision while centralizing expertise. Agents will require upskilling in AI supervision, monitoring, annotation, and risk prevention. Although productivity gains will be achieved, these will coexist with unused capacity, creating a need for improved workflow orchestration.

Evolution of technology and delivery models

AI voice is expected to reach near-human fluency, accelerating automation and reducing reliance on language-skilled labor. Browser and desktop automation will allow AI to operate across legacy systems, while domain-specific and multimodal AI will enhance vertical understanding. At the same time, persistent challenges will be scaling pilots, managing costs, addressing security risks, preventing prompt injections, and overcoming limits in generalization. Production AI systems will require rigorous oversight, governance, and tracking, particularly in regulated sectors. Eventually, agentic AI in CX will enable autonomous planning, reasoning, and tool use, transitioning workflows from assistive to fully autonomous.

Managed services vendors can take the lead in CX transformation

Traditional BPOs will face increasing competition from AI-native, vertical-specific vendors, while CX service providers are expected to take on technology deployment roles that were traditionally the domain of consulting firms. Enterprises are likely to favor fewer but deeper multidisciplinary partnerships. At the same time, technology ecosystems offering prebuilt AI components will expand enterprise options and intensify competition for incumbent providers. One opportunity for CX services vendors is focusing on the mid-market (e.g., TP; Alorica; VXI) with new approaches for technology adoption and workforce management. The main difference from previous attempts in the area is the current AI-first technology stack, allowing successful mid-market implementation.

CX vendors could focus on revenue-as-a-service with revenue-generation analytics and AI-driven sales support, leveraging tools such as next-best-action engines, real time transcription, and contextualized sales guidance to drive upsell, cross-sell, and customer acquisition. These capabilities will need to align with business growth and market expansion objectives, emphasizing flexible contracting, outcome-based pricing, and location strategies. AI applications across lead scoring, segmentation, pipeline optimization, compliance, and personalized customer guidance, with proprietary platforms (e.g., Atento; Firstsource, Mplus, WNS) could enable proactive, consultative sales and revenue acceleration. Providers could strengthen their work in managing complex products and multi-step buyer journeys, while accurately predicting outcomes and supporting retention, collections, and sales-through-service initiatives.

The key challenge is shifting pricing models from bundled FTE structures toward outcome-based (e.g., Movate), hybrid (platform, token, and FTE), and modular approaches covering AI, automation, QA, and analytics. Vendors will need to compete on value creation rather than labor arbitrage, which will reshape long-term margin structures.

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