The Dynamics 365 Release Wave 2 2025 is on its way, bringing a host of powerful enhancements to Dynamics 365 Customer Service. I have already covered the release wave for Customer Insights Journeys and Contact Center. For the full release planner see the Microsoft documentation. Some of the features listed in this post have already been covered in my Contact Center post, but I also list them here to make this a complete overview for Customer Service as they can be used with and without Contact Center.

This release, with features rolling out from October 2025 to March 2026, continues the strong focus on AI-driven efficiency. The updates are centered on empowering administrators, streamlining agent workflows, and leveraging Copilot to resolve customer issues faster. You can opt into some features as part of early access on July 28, 2025.

Let’s break down the key features across the main investment areas.

Administrator updates for Customer Service

An intuitive, modern administration experience helps you quickly set up Dynamics 365 Customer Service and use its features.

Protect sensitive information in emails with data sensitivity labels

This feature boosts data security by allowing service representatives to apply Microsoft Purview data sensitivity labels directly to outgoing emails. By classifying communications, you can better protect sensitive information, reduce the risk of data breaches, and ensure compliance with regulations like GDPR. Administrators can centrally create and publish these labels from Microsoft Purview, providing a streamlined way to manage and enforce data protection policies across the organization.

General availability: October 2025

Key Copilot and AI innovations in Wave 2

Copilot in Customer Service uses generative AI capabilities to speed up resolution of customer issues and boost customer satisfaction.

Update knowledge base using Customer Knowledge Management Agent

This feature introduces the Customer Knowledge Management Agent, an AI-powered tool designed to automatically turn case data into valuable knowledge articles. The agent works in two ways: it can generate articles in real-time as agents close cases, allowing you to respond to emerging issues in minutes, and it can also process historical cases to rapidly build out your knowledge base. By analyzing case notes, emails, and conversations, the agent drafts articles, checks for duplicates, and can even be configured to remove sensitive data before publishing. Supervisors are given a dedicated dashboard to monitor, review, and approve the AI-generated content, ensuring the quality of knowledge used by both agents and Copilot.

Public preview: March 31, 2025

General availability: October 2025

Use Copilot-powered email template recommendations

To help agents respond faster and more consistently, Copilot will now automatically recommend the most relevant email template for a given situation. By analyzing the context of the conversation, Copilot intelligently suggests a template directly within the email editor, eliminating the need for agents to manually search. Agents can also enter custom prompts to guide the suggestions and can always select a different template if needed. This feature speeds up case resolution and ensures a more standardized, accurate communication with customers.

Public preview: April 15, 2025

General availability: October 2025

Insert Copilot prompts in email templates

Taking email automation a step further, administrators can now embed pre-defined Copilot prompts directly into email templates. When an agent selects one of these enhanced templates, Copilot automatically runs the embedded prompt. For example, «summarize the key details of this case», and instantly populates the email with the AI-generated content. This dramatically reduces the manual work for agents, boosts productivity, and ensures that communications are not only fast but also consistently high-quality and contextually accurate.

Public preview: April 15, 2025

General availability: October 2025

Optimize customer service with intent-based routing

This feature introduces a more intelligent way to route customer inquiries across live chat and cases. Using generative AI, the system analyzes a customer’s message to understand their true intent. This intent is then matched to pre-configured groups of agents who have the specific skills and expertise to solve that problem. The system then intelligently assigns the work item to the best available agent in that group based on their real-time capacity and presence, leading to faster, more accurate resolutions and higher customer satisfaction.

Public preview: May 15, 2025

General availability: October 2025

Connect AI agents using Model Context Protocol server

This feature introduces the Model Context Protocol (MCP) server, a standardized way to connect Dynamics 365 Customer Service with external AI agents and platforms. This makes integrating third-party AI agents, like Claude or custom bots built with Copilot Studio, a much simpler process. Once connected, these external agents can perform actions within Customer Service, such as creating cases, updating accounts, or drafting emails. Crucially, this protocol enables complex cross-functional automations by allowing the service agent to communicate with other MCP-enabled systems, like an ERP, to streamline entire business processes.

Public preview: June 2025

General availability: October 2025

Automate case lifecycle tasks with Case Management Agent

This new AI agent is designed to handle many of the administrative tasks throughout a case’s lifecycle. Freeing up service representatives to focus on the customer. From the moment a live chat starts or an email arrives, the agent can automatically create a case and populate it with relevant details, continuously updating it as the conversation unfolds. It also intelligently classifies incoming emails to filter out non-essential messages. During the case, the agent can suggest the right internal expert to consult and initiate a Teams chat with a pre-populated case summary. Finally, it assists with follow-ups and can even automatically resolve cases based on customer replies.

Public preview: April 10, 2025

General availability: October 2025

Enhancements for the Service representative experiences

When you enable service representative experiences, service representatives can handle multiple interactions, switch between sessions without losing context, and use productivity tools to enhance workflows.

Automatically restore sessions after a browser refresh

To reduce disruption and save agents time, this usability improvement addresses a common frustration. Previously, if an agent’s browser refreshed, all their session tabs would be lost. Now, the Customer Service workspace will automatically restore all previously opened sessions and tabs. Including cases, accounts, and conversations, after a refresh or reconnection. The system even returns focus to the last tab the agent was viewing, eliminating the need to manually reopen everything and allowing them to get right back to work.

Public preview: October 1, 2024

General availability: October 2025

Bring multisession capabilities to your custom apps

The powerful, tabbed multisession experience from the main Customer Service Workspace can now be enabled for any custom model-driven app. This is a significant update for organizations that have built specialized applications for different lines of business. Administrators can now easily activate this feature for their custom apps, allowing agents to gain the same productivity benefits of managing multiple cases and conversations concurrently within a single, tailored application window.

Public preview: April 30, 2025

General availability: October 2025

New Supervisor tools in Customer Service

Supervisors use these experiences to monitor and improve contact center operations.

Perform bulk actions on filtered conversations

Supervisors gain a powerful new tool within the Omnichannel real-time analytics dashboard to manage conversations more efficiently. This feature allows supervisors to filter active conversations based on attributes like queue, status, or customer intent, and then perform bulk actions on the selected items. With just a few clicks, they can reassign multiple conversations to another queue, send a notification to the assigned agents, or bulk-close inactive threads, making it easier to balance workloads and manage high-volume scenarios.

Public preview: September 2025

General availability: October 2025

Tag email templates with line-of-business

For organizations with large and diverse email template libraries, this feature streamlines management by allowing administrators to add line-of-business (LOB) tags. They can apply these tags in bulk and create custom views, making it much easier to organize templates. As a result, service representatives can quickly filter and find the exact template they need. Additionally, this update brings enhanced multi-language support for email templates, a key improvement for global operations.

Public preview: August 2025

General availability: November 2025

Overall, the Dynamics 365 Customer Service Release Wave 2 2025 doubles down on AI-driven productivity, providing significant value for administrators, supervisors, and front-line agents alike. These updates promise to streamline workflows and deliver smarter, faster customer experiences. What are your favourite planned release? Let me hear in the comments below