As operational costs continue to rise across industries, contact centres are under pressure to do more with less, without sacrificing customer experience. In India and globally, call centres face high expenses in staffing, training, infrastructure, and quality control. But in 2025, Artificial Intelligence (AI) is emerging as a game-changer. From automating Tier-1 queries to streamlining workforce management, AI is helping businesses reduce call centre costs while improving service quality.
According to Statista, the global market for AI in contact centres is projected to reach $6.3 billion by 2025, up from $1.6 billion in 2020. This explosive growth reflects the urgency with which companies are turning to intelligent automation to cut costs and improve efficiencies.
A report by Gartner further supports this trend, stating that 40% of all customer service and support functions will be handled by conversational AI by 2025, significantly reducing staffing costs and handling time. As AI-driven call centre solutions become more accurate, multilingual, and scalable, businesses are embracing them not just as a cost-saving tool but as a strategic investment in long-term customer loyalty.
The Rising Cost of Call Centres & Why AI is the Solution
Call centres, especially in competitive sectors like insurance, telecom, and D2C, are becoming increasingly expensive to maintain. Rising salaries, attrition costs, compliance requirements, and technology upgrades contribute to ballooning operational expenses. The cost of serving each customer through a human agent continues to climb, even as customer expectations for faster and 24/7 service increase. Businesses are struggling to find the balance between delivering excellent service and staying profitable.
That’s where AI comes in, not as a replacement, but as an intelligent cost optimiser. Artificial Intelligence can help restructure how support teams function by taking over repetitive, low-value interactions and freeing up human agents for more strategic conversations. It enables companies to scale without scaling costs, offering a smarter and leaner path forward. With AI-powered agents, call centres can significantly lower operational spend while meeting or even exceeding customer satisfaction benchmarks.
How AI Helps Reduce Call Centre Costs Without Affecting CX
One of the most powerful advantages of AI in call centres is that it helps reduce costs without degrading the customer experience; in fact, it often improves it. By automating repetitive tasks and assisting human agents with intelligent support, AI ensures customers get fast, consistent, and contextual service. Unlike older automation tools, modern AI is conversational, adaptive, and capable of handling both voice and text interactions across languages. Here’s how it directly impacts your bottom line while improving CX.
Automating Tier-1 Support to Free Up Human Agents
A large chunk of call volume, often over 60%, consists of repetitive queries like delivery status, policy information, or billing issues. AI voice bots and chatbots can handle these instantly and accurately, reducing the number of queries that reach human agents. This cuts costs by decreasing staffing requirements and reducing wait times for customers.
Lower Training & Onboarding Costs with AI Agents
Recruiting and training new call centre agents requires weeks of investment and resources. AI agents, on the other hand, can be deployed in days, come pre-trained on industry-specific knowledge, and continue learning with every interaction. This eliminates ongoing training expenses and ensures consistency in information delivery.
Reducing Call Handling Time Through Voice AI
AI-powered voice systems understand intent faster and process responses quicker than human agents in many standard use cases. This leads to significant reductions in Average Handle Time (AHT), a key cost metric, helping companies save time and money on each interaction while improving throughput.
24/7 Availability Without Overtime Costs
Unlike human agents who work in shifts and require overtime for extended hours, AI agents are always on. They provide 24/7 support across all time zones without any additional cost, making it easier for businesses to scale globally without inflating payroll.
Multilingual AI to Avoid Hiring Language Specialists
AI agents trained in multiple regional languages like Hinglish, Bengali-English, or Tamil-English reduce the need to hire language-specific agents. This is especially beneficial in linguistically diverse countries like India, allowing businesses to offer localised support at scale with minimal cost.
Cost Comparison: Traditional Call Centres vs AI-Powered Call Centres
Traditional call centres rely heavily on human resources, which makes scaling expensive and inefficient. On the other hand, AI-powered centres optimise performance by using virtual agents, automation, and intelligent routing. While the initial investment in AI may seem high, the long-term ROI is significantly better due to reduced payroll, better productivity, and higher customer retention. Here’s a side-by-side comparison of costs across both models:
Real-World Examples of Cost Reduction Through AI in Call Centres
AI is not just a future solution, but it’s already helping top enterprises in operational costs while improving service levels. From BFSI to telecom to ecommerce, companies are leveraging AI to automate Tier-1 queries, reduce manpower, shorten AHT, and scale customer support without scaling costs. These examples from India and global markets show the measurable impact of deploying AI in real call centre operations. Let’s explore how AI is driving this transformation.
HDFC Bank – 20% Cost Savings with Conversational AI
HDFC launched its AI-powered assistant EVA, which handled over 5 million customer queries across web and mobile platforms. This dramatically reduced the pressure on human agents. According to Analytics India Magazine, EVA delivered over 85% accuracy and saved the bank up to 20% in annual support costs. By deflecting repetitive queries and reducing Average Handle Time (AHT), HDFC achieved both financial efficiency and improved customer satisfaction.
Vodafone Idea – AI IVR Reduced Escalation by 30%
Vodafone Idea deployed an AI-based IVR system capable of understanding customer intent, sentiment, and preferred language. The system automatically routed calls or resolved them without human involvement. Over time, it deflected more than 30% of calls, directly reducing headcount dependency and call volumes handled by agents. This reduced both operational costs and improved First Call Resolution (FCR) rates, boosting the customer experience.
Delta Airlines – 40% Agent Load Reduction During Peak Hours
Delta Airlines implemented an AI-driven call-routing and customer assistance system that automated routine flight and booking queries. As per a 2024 Deloitte case study, the platform reduced call wait times during peak holiday seasons and cut call centre workload by 40%, leading to millions in annual savings and improved NPS (Net Promoter Score).
Large D2C Brand – 70% Automation in Returns Support
A major eCommerce player automated their high-volume return and refund queries using SquadStack’s AI assistant. The voice AI handled 70 %+ of calls without human intervention, particularly in Tier 2/3 cities where language diversity is high. This led to reduced staffing needs, better response times, and consistent savings of ₹15–20 lakhs/month in support operations.
How to Get Started with AI to Cut Call Centre Costs
Deploying AI in your call centre doesn’t require overhauling your systems overnight. The smartest companies start small, automate specific use cases, and gradually scale AI across processes that offer the most savings and CX impact. Here's a practical roadmap for leaders looking to reduce call centre costs using AI, with minimal risk and faster ROI.
Identify High-Volume, Low-Complexity Use Cases First
Start by analysing call logs to identify repetitive queries, like order status, bill payments, KYC reminders, insurance renewals, and basic FAQs. These queries often make up 60-70% of total call volume and are the easiest to automate with high accuracy. Automating these first steps helps cut costs significantly without impacting service quality.
Choose an Industry-Specific AI Partner
Generic AI solutions don’t deliver real value in complex industries like insurance, telecom, or BFSI. Pick an AI partner like SquadStack that provides domain-trained models, understands compliance, and offers pre-built integrations with CRMs, dialers, and ticketing tools. Industry knowledge drastically reduces implementation time and boosts ROI.
Run a Pilot Campaign with Clear ROI Metrics
Before scaling, test AI with a single use case or process. Measure outcomes like fallback rate, AHT, escalation rate, cost per interaction, and CSAT. A successful pilot proves the value to internal stakeholders and builds momentum for wider adoption.
Integrate AI Seamlessly into Your Existing Stack
Ensure the AI system connects with your existing CRM and lead management system. This allows contextual data to flow between systems, resulting in faster and smarter responses, without disrupting existing workflows.
Track, Train, and Improve Continuously
AI models are only as good as their training. Use real-time analytics dashboards to monitor performance, identify gaps, and fine-tune responses. Retrain models with new intents, dialects, or FAQs based on evolving customer behaviour. Continuous improvement is key to sustained cost reduction.
Don’t Neglect Customer Experience Metrics
While reducing call centre costs is a priority, CX remains a non-negotiable. Choose AI systems that understand emotion, speak in regional dialects, and escalate to humans when needed. A well-balanced AI + human hybrid model delivers the best of both cost efficiency and customer delight.
Why SquadStack is the Right AI Partner to Reduce Your Call Centre Spend
There are dozens of AI vendors in the market, but very few offer the depth, scalability, and cost efficiency needed for real call centre transformation. SquadStack stands out by combining cutting-edge voice AI, industry-specific intelligence, and hybrid human support, all designed to maximise ROI and minimise total cost of ownership (TCO). Here’s why businesses across India choose SquadStack:
Trained on Millions of Insurance & BFSI Calls
SquadStack’s voice AI is trained on live call recordings across motor, health, and life insurance segments. It understands sector-specific vocabulary, disclosure logic, compliance language, and customer psychology. This enables it to have human-like conversations while ensuring legal accuracy.
Handles Code-Mixed Languages Like Hinglish & Tamlish
India is linguistically diverse, and SquadStack’s multilingual AI handles it all. It supports mixed languages like Hinglish, Bengali-English, and Tamil-English, delivering personalised and localised conversations that drive trust and reduce dropout in Tier 2/3 cities.
Real-Time Escalation to Human Agents When Needed
Complex scenarios or high-value conversations are escalated in real-time to human agents via SquadStack’s hybrid model. This ensures no lead is lost due to AI limitations; the system knows when to hand over, not just how to automate.
Advanced Analytics & QA Dashboards With Privacy
With SquadStack, you don’t operate in the dark. Get detailed reports on cost per interaction, call quality, fallback rate, sentiment score, and AHT, all accessible via an intuitive dashboard. Built-in quality assurance lets you audit both AI and human calls for compliance and training. Data privacy is critical. SquadStack is compliant with ISO 27001, GDPR, and India’s DPDP Act, making it a safe choice for industries handling sensitive financial or health data.
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