AI adoption critical for India’s BPO survival, says Mphasis CEO
MUMBAI, INDIA — Nitin Rakesh, CEO and Managing Director of IT service and consulting company Mphasis, emphasized the critical role of artificial intelligence (AI) in the survival and competitiveness of the business process outsourcing (BPO) sector.
In an interview with Fortune India, Rakesh highlighted that significant AI adoption is crucial for BPO businesses to stay competitive and avoid obsolescence in today’s rapidly changing market.
AI’s role in boosting efficiency, customer satisfaction
Rakesh explained that AI’s benefits extend beyond mere cost reduction, enhancing operational efficiency and customer satisfaction.
“In IT operations, business cases show a 30% reduction in cost and a 50% reduction in tickets,” he stated.
Moreover, AI can boost system availability by up to 80%, reducing downtime and improving customer satisfaction metrics like net promoter scores (NPS).
This aligns with Rakesh’s concept of a “savings-led transformation,” where cost savings are paired with enhanced operational outcomes.
Mitigating risks through revenue diversification
With over 50% of Mphasis’s revenue coming from its top ten clients, Rakesh acknowledged the need to mitigate client concentration risks.
He emphasized the importance of diversifying across industries and geographies while accelerating growth in smaller accounts.
“The only way to do it is to constantly expand your portfolio of offerings,” he noted.
AI’s transformative impact on BPO operations
AI is already reshaping key areas within the BPO sector, such as contact centers, onboarding, risk management, and compliance. Rakesh predicts that digital automation could reach up to 97%, significantly reducing manual interventions.
He warned that without adopting agentic AI solutions, traditional BPO processes could become obsolete.
Mphasis navigates fiscal challenges with AI investments
Mphasis faced a challenging fiscal year 2024, with a 6.6% decline in net revenue year-on-year. However, signs of recovery are evident in FY25, with sequential growth of -0.2% in Q1 and 2.7% in Q2.
To accelerate this positive trend, Mphasis launched its dedicated division, Mphasis AI, in June 2023. This unit focuses on integrating AI into all customer solutions and operations, ensuring a seamless transformation across its offerings.
Strategic focus on BFSI, compliance for growth
Looking ahead, Rakesh said that Mphasis plans to focus on growth opportunities in risk and compliance within the banking, financial services, and insurance (BFSI) sector. The company sees potential as geopolitical risks stabilize and U.S. banking recovers from earlier challenges.
With three consecutive quarters of growth already recorded, Rakesh remains optimistic about leveraging AI for sustained innovation and expansion.
