Firstsource shifts from labor arbitrage to AI in ANZ expansion
MELBOURNE, AUSTRALIA — Global business process services provider Firstsource is steering away from traditional labor arbitrage as it establishes a presence in Australia and New Zealand (ANZ), emphasizing AI and automation to deliver superior business outcomes.
According to a Computer Weekly report, the company’s move signals a broader shift in the outsourcing sector, where technology increasingly takes center stage over low-cost offshoring.
AI-led ‘UnBPO’ strategy in Australia and New Zealand
Since opening its regional headquarters in Melbourne in September 2024, Firstsource has been helping local businesses move beyond the simple cost-cutting strategies of the past.
Chief Executive Officer (CEO) Ritesh Idnani said the ANZ expansion was motivated by the region’s strong appetite for innovation.
“The Australia and New Zealand market was a very important geography for us to get into, given the market opportunity and, more importantly, the amount of innovation that I have experienced over the years working in this region,” he said.
The Melbourne office hosts an AI innovation lab, collaborating with Victorian universities on practical applications of the technology. Idnani emphasized that Firstsource’s goal was not just to establish a satellite office, but to create a “sustainable innovation hub for the region.”
The company has already hired 200 staff in its first year and has pledged to reach 400 employees within five years.
Firstsource describes its approach as an “un-BPO” playbook. Idnani noted that for the past 25 years, the industry relied on labor arbitrage, delivering “your mess for less.”
He believes the sector is now moving toward technology arbitrage, where human expertise combined with automation enhances business outcomes rather than simply reducing costs.
AI use cases in financial services and lending
Firstsource serves industries including financial services, healthcare, telecom, utilities, and the public sector. While specific local clients were not disclosed, Idnani stressed the company’s ability to “use technology prudently to help unlock value in the domains in which we operate” and to underwrite business outcomes.
The company has applied AI to improve financial services processes such as collections and loan approvals. By hyper-personalizing communication and tailoring repayment plans, a client improved repayment rates.
AI also handles rule-based aspects of loan processing, allowing underwriters to increase daily application capacity from six to eight.
“There’s still a human in the loop, the underwriter is still approving the applications, but you’re improving underwriter processing efficiency,” Idnani said.
He added that responsible AI practices, including explainability and proper guardrails, are key to protecting brand reputation.
Firstsource’s strategy reflects a wider trend in outsourcing: the shift from cost-driven offshoring toward technology-enabled service delivery.
Companies that combine AI with human expertise can drive efficiency, improve the customer experience, and foster local job creation, making them an increasingly attractive model for progressive markets like ANZ.
As outsourcing evolves, innovation hubs such as Firstsource’s Melbourne office may well define the next generation of global business process services.
Firstsource previously ranked #30 in the OA500 2025, an objective index of the world’s top 500 outsourcing companies.
