Calendar 2024 was relatively muted for the global CX services market, with continued headwinds in large verticals in core North American and European geographies. In parallel, GenAI investments and rebalancing of the delivery portfolio challenged consistent margin improvement.

2025 looks cautiously optimistic, with improved growth in the range of 3.5-4.5% y/y, depending on the impact of external changes and disruptions, such as the new U.S. and European administrations’ economic and trade policies.

The one certain CX development for 2025 is the demand from clients and vendors to convert their GenAI investments from the last two years into business outcomes, including higher CSAT, increased sales, and greater compliance and fraud prevention.

GenAI to deliver CX results beyond agent productivity

GenAI investments are expected to yield results and move from POCs and trials into production environments along four main tracks:

• End-to-end talent management with AI-based recruitment, assessment, training, coaching, QA, knowledge management, and copilots. Here, the main question around technology such as AI simulations, automated summarization, cognitive search, next-best-action, and automated QA is the speed and scale of deployment with the agent population
• Analytics and insights assistants utilizing conversation information discovery to reach maturity and first deployments
• Internally-facing performance accelerators via copilots in functions such as legal, procurement, HR, RFP responses, note taking, KB content development, and low/no code development (e.g., Concentrix iX)
• Machine translation, accent neutralization, language enhancement, and noise cancellation to expand deployments to targeted programs with the highest ROI.

Agentic AI is the next stage of the CX GenAI evolution and opens up the opportunity to finally achieve machine-first CX services with limited human supervision and support. This stage will take several years to reach maturity and will not produce business outcomes in 2025 and 2026. Some of the potential challenges are the requirement for CX policy and procedure alignment at the organizational level, tried and tested guardrails, and expertise in the simultaneous use of multiple SLMs and arbitrage between LLMs; the latter feature is increasingly important since last’s week roll-out of DeepSeek.

M&A activity will be smaller scale and more targeted in 2025

Looking at 2024’s M&A activity in CX services, deals were primarily focused on adding pure CX services capabilities to grow market share and expansion of offshore capacity. Some of the examples include:

• Covisian acquiring Centrinex to enter onshore CX Services in the U.S.
• Firstsource acquiring Ascensos to expand CX Services in retail
• Everise to acquire the healthcare business of Continuum Global Solutions to expand in pharmacy benefits management
• Fusion CX acquiring RCC BPO to expand offshore CX Services from Belize
• iSON Xperiences acquiring EC Outsourcing Company to expand CX Services in the U.K.
• Konecta acquiring Bespoke to expand CX Services in the U.K.
• Transcom acquiring VCosmos to enter offshore delivery from India

Compared to past periods, major M&A activity among the top ten CX services players is less likely, with the focus among market leaders and top 25 vendors now on adding more specific capabilities, either in target verticals such as BFSI, utilities, or healthcare, or boosting offshore capacity.

Among these investments, specialized domain capability in trust and safety, KYC, sanction screening, and fraud prevention stands out. These highly sought-after resources and IP tools form a promising CX-adjacent service. Its drivers are new sanctions, AI threats, and growth in regulations. While technology partnerships are the more common path, acquisitions are also possible (e.g., IntouchCX’s addition of WebPurify.)

India could be the big winner of the offshoring trend

Delivery countries with competitive labor cost, a good level of English language resources, and some multilingual capacity continued to attract new investments in 2024. South Africa is the biggest success story, with the majority of CX services players present in the country. Capacity was added and will continue to be added in 2025 in Egypt, Belize, Trinidad, and Indonesia, as well as renewed growth in the Philippines (outside Manila) and solid expansion in East Africa.

One of the more transformational changes in CX geography comes from machine translation and AI voice, which opens offshore CX services to first-time clients. A very likely winner is India, which has a large population of English-speaking talent whose communication capabilities are augmented in real time. Even with the license costs of accent neutralization and noise cancellation platforms, the cost arbitrage enables delivery of quality CX services over voice at competitive rates. Many CX services players have accelerated their plans for India or entered for the first time (e.g., ResultsCX, iQor, Fusion CX).

Financial markets remain (unreasonably) gloomy on CX services

Financial markets have taken an unfavorable view of CX services providers due to the rate and scale of AI transformation, with share prices less than a third of their peak in 2022. Popular thinking expects human CX support to be overtaken by AI. However, this first wave of AI deployments in CX services in 2024 points to a recalibration of the balance between human and bot support, leaving significant room for person-to-person conversations with a high level of empathy.

Predicting whether brands will opt against human-led support in multiple processes such as sales, retention, cancellation, and highly sensible customer service scenarios (e.g., money or personal health) is highly speculative. In addition, the negative view underestimates the fact that CX services vendors are responding by providing a combination of CX consulting, modular technology integration, and managed operations to enable this AI transition for organizations. All mid to large CX services vendors are at different stages of this repositioning. This negative outlook on the CX industry often stems from limited knowledge of the actual work delivered by outsourcing providers. A telling example has been the changes announced by Meta in their fact-checking practice in the U.S. and the market commentary on how this will eliminate content moderation.

The current negative market assessment is conflated with the softness experienced in client industries and the highly volatile consumer demand. The 2025 global macroeconomic environment does not seem to offer a turnaround for the CX services market but the expected business results from GenAI deployments will lay a solid foundation for a new AI + human CX.

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