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Call centers in the Philippines, the world’s second-biggest outsourcing center after India, are embracing artificial intelligence - and it’s radically changing what it looks and sounds like to work there.
On today's Big Take Asia podcast, host Rebecca Choong Wilkins demos the Sanas AI app and talks to Bloomberg's Saritha Rai about the industry's rapid transition and what it might mean for workers around the world.
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Here is a lightly edited transcript of the conversation:
Rebecca Choong Wilkins: I recently had a conversation that really changed the way I think about AI, its power and how it might be used in our day to day interactions. It started with a phone call to a company called Sanas.
Luzziel Garcia: Hello, thank you for calling Sanas Airline. My name is Luzziel. How can I assist you today?
Choong Wilkins: Hi. I’m Rebecca. Um, I'm trying to cancel my flights to Singapore, but I'm having problems.
Garcia: Okay, I'm sorry to hear that, Rebecca. And for us to proceed, can I have your ticket number, please?
Choong Wilkins: It sounds like a typical conversation you might have with a customer rep -- but here's the thing -- the sound of Luzziel, the person I’m speaking with, is actually being modified quite dramatically with AI. Without the AI – here's what our conversation would actually sound like:
Garcia: Hi, Rebecca. This is Luzziel, and I'm from the Philippines, and this is my normal voice and accent.
Choong Wilkins: Wow Luzziel that is a wild transformation, both in accent and in that clarity of that noise.
Garcia: Yeah, right?
Choong Wilkins: Wait, can you turn on the app again?
Garcia: Okay. Not a problem. So there you go. The Sanas app is turned on now. So hi, Rebecca. Nice meeting you.
Choong Wilkins: Wow. That’s just wild.
Choong Wilkins: The AI company Luzziel works for, Sanas, calls this technology “accent translation.” It says it eliminates background noise, and enhances the clarity of voice and speech, while making sure it still sounds natural. And Luzziel, who runs demos for Sanas, says the technology helps call reps. When they use it – fewer customers ask to be transferred to a different agent. That used to happen all the time during the 12 years she worked as a customer service rep.
Garcia: For example, if we answer the call, they actually look for a US representative right away, instead of trying to talk to us. There's already a doubt if we are equipped or capable of answering their questions or, or resolving their concern and queries.
Choong Wilkins: Sanas says its AI tools quote "eliminate communication barriers and allow agents to resolve issues faster." Which means shorter wait times for customers. And Sanas is just one of the many AI companies that are blurring the line between where the tech starts and the human ends. And while these tools might make things easier on customer reps -- they are a potential danger to the jobs of those working in the customer service industry or what’s known as the BPO sector – Business Process Outsourcing.
Saritha Rai: We will see shrinking in the core of BPO work as new AI tools get launched every month. They're bringing in a lot more efficiency.
Choong Wilkins: Bloomberg’s Saritha Rai covers AI in Asia from India. And she says if you want to see this threat up close -- the Philippines where Luzziel is – is a good place to look. That’s because it’s considered the world’s capital for BPOs, particularly voice BPOs.
Rai: The industry employs about 1.7 million people and accounts for about 8 percent of Philippines’s GDP.
Choong Wilkins: And Saritha says what’s happening with the industry over in the Philippines is being closely watched by the rest of the world.
Rai: Entire countries, economists, experts are watching the Philippines to see how it will play out in this country of about 100 million people. And that could well show a signal as to how these technologies move to other countries and other industries and disrupt or enhance workers’ lives.
Choong Wilkins: Welcome to the Big Take Asia from Bloomberg News. I’m Rebecca Choong Wilkins. Every week, we take you inside some of the world's biggest and most powerful economies, and the markets, tycoons and businesses that drive this ever-shifting region. Today on the show: the Philippines is at the forefront of AI’s job displacement – and what happens there will say a lot about what's ahead for white collar workers around the world.
Choong Wilkins: A few decades ago, major global corporations began outsourcing a lot of their back end work – think HR, accounting, auditing and customer service – to countries with lower labor costs. And Bloomberg’s Saritha Rai says one of the top places these tasks were outsourced to – was the Philippines. And part of the reason for that she says is because of the way people there speak.
Rai: So the Philippines is really one of those countries which is culturally very aligned with the United States. And people speak in an accent that is much closer to the American accent much more than pretty much most of Asia. So that is the reason why a lot of the BPO work has increasingly moved towards the Philippines and made it really the call center capital of the world.
Choong Wilkins: Saritha tells me the Philippines started growing its back office industry in the 2000s. And today, call centers are the country’s biggest source of private sector jobs. The industry is forecast to hit 38 billion dollars in revenue this year. And this industry boom has created the kind of jobs that have helped transform people’s lives.
Rai: These are well paying jobs. These are jobs where you can actually be socially upwardly mobile. You can actually get paid decently and make a change in your lifestyle, buy a home, buy a car, set up a small business on the side, set up your family.
Choong Wilkins: But Saritha says in the last eight months or so -- there’ve been big changes in these jobs that are raising questions about whether or not they will continue to be a stable source of income and employment for millions of Filipinos.
Rai: The largest BPOs in the Philippines have rolled out a variety of AI tools pretty extensively. These AI tools do all kinds of things, such as assisting agents while they're on live calls, training the agents, sometimes even making outbound calls to sell something.
Choong Wilkins: One of the call centers in the middle of adapting to this AI transition is [24]7.ai. Saritha was given rare access to their call center in Manila, where they were using a ChatGPT-like tool to train customer service agents. In the test run that Saritha saw, the AI tool generated different scenarios and took on a range of personas to help the human agent role play with different types of callers they might get.
Rai: For example, pleasant, irate, tough, hard bargainer, or tweak the sentiment can be tense, distressed, irritated, or calm. So for example, somebody can choose a scenario which is a Gen Z male irate churned customer, or a female, a millennial who is calm, but has a real problem.
Choong Wilkins: What does an irate Gen Z AI customer sound like?
Rai: Very difficult for the agent to deal with. (LAUGHTER). I can assure you I overheard some of those calls and it was not easy, but it was tremendous how calmly these agents were dealing with really annoyed and tough customers at the other end.
Choong Wilkins: The idea, Saritha says, is to prepare the agents to deal with as many different scenarios and customer personalities as possible. It’s also to help train them to give the most appropriate response. And Saritha says the company told her that the kind of work the AI is doing to train human agents would take much longer if it were being done by an actual human trainer.
Rai: You cannot have the trainers go from pleasant to irate to a tough bargainer to a distressed customer all within seconds. Whereas the AI can easily do that. Which is why what used to take three times the number of days to train an agent has now come down to about a month.
Choong Wilkins: But with productivity gains and workflow improvements come tradeoffs. Saritha spoke to a few people whose jobs came under threat from the AI revolution in the BPO industry. One of them is 47-year-old Christopher Bautista.
Rai: He's worked in the BPO industry for nearly two decades.
Choong Wilkins: Christopher told Saritha that for months, he’d watched as AI took on more responsibility where he worked. The AI took care of customers’ questions such as general inquiries about products, what the problem was and more, before routing calls to human agents. And then last November, he and others at the BPO company serving a multinational tech giant were put on “floating status.”
Rai: Floating status means no work, no pay, but still on the rolls. So you are not jobless, but you are not getting paid. So that went on for about four or five months before Christopher quit the company and then has found a job in an entirely different company.
Choong Wilkins: So just how many jobs in the BPO industry are going to come under threat because of this transition? And what will that mean for the Philippine economy which is heavily dependent on this sector? That's coming up after the break.
Choong Wilkins: Over the past year, most of the major players in the Philippines’s vast BPO industry have introduced some form of AI “copilot” – having algorithms run alongside human operators to make their work much more efficient – all in real time. And Bloomberg’s Saritha Rai says, with these new AI tools – something that used to give the Philippines an advantage in this industry -- its cultural closeness to America -- may not matter anymore.
Rai: These AI tools will make it possible for BPO's to set up anywhere because accent will not be a problem.
Choong Wilkins: Saritha says that could open doors for foreign-owned companies to move their call center operations to places in Africa, like Ghana, where it’s cheaper to recruit agents and where the BPO industry is starting to expand. And that has big implications for the Philippine economy which has been transformed by the sector.
Rai: Some 10, 12 years ago, Manila was a different city. Now, most of these slick skyscrapers, these luxurious homes, these big malls, all of this has been majorly on account of BPO industry’s boom.
Choong Wilkins: But now – one estimate says that up to 300,000 contact center jobs could be lost in the Philippines to AI in the next five years.
Rai: There is a recognition that, you know, that there is change coming that, there will be job losses, there will be less hiring, and you do not see the kind of frenzy that used to be the hallmark of the BPO industry, even a decade ago.
Choong Wilkins: Now Saritha says some of the executives in the industry she spoke to don't see the changes as all about job losses. They say AI will create different types of roles -- jobs like training algorithms or curating data. As for the Philippine government who had been banking on the BPO industry to help propel its economy, we asked Saritha how they’ve responded to the growing presence of AI in the industry.
Rai: There is a recognition that AI can really upend the industry. The government has been talking about reskilling and training their workforce, but there is very little yet on the ground that I see in terms of real skilling initiatives or training initiatives that the government has initiated.
Choong Wilkins: Last month, the government launched an AI research center aimed at helping turn the Philippines into a regional frontrunner in the AI space, but Saritha says the government has yet to put a figure on how much it’s planning to spend.
Rai: There is no real dollars set aside for retraining.
Choong Wilkins: I suppose every technological revolution has ultimately led to some job cuts. And I wonder if this is any different. Or is this just another one of those key technological turning points in history?
Rai: In my coverage of the technology industry, I've covered a variety of disruptions. The latter part of the Internet disruption, the mobile disruption or the cloud disruption, all of these disruptions. But this is different.This is a technology that could impact, Rebecca, what you are doing and what I'm doing. I keep looking over my shoulder to see what different technologies are doing in terms of writing and in terms of journalism. (LAUGHTER) I know that there are AI anchors now, there are AI podcasters. What does that mean for your job and mine? There's always that little bit of niggling anxiety at the back of my head as I look at this technology and I've never felt that before.
Choong Wilkins: Maybe it will be a cheerful, Rebecca, British accented AI avatar podcast host. (LAUGHTER)
Choong Wilkins: It definitely feels like this story, perhaps more than some of the other stories that we reported on, we have a little bit more skin in the game here.
Rai: I agree.
Choong Wilkins: To that point, I wonder, does what happens with AI in the Philippines affect the rest of the world?
Rai: I think the world over governments are challenged with how to deal with what is called job displacement tools that this kind of AI is bringing in. There is an awareness that this is happening, but governments around the world are doing really very little to deal with it. So this is a bullet train that is really moving very fast and does the government have the speed to catch up? That is a question that I would leave open ended.
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