Customer experience is a key differentiator in South Africa’s competitive business landscape. According to PwC South Africa’s 2024 Voice of the Consumer Survey, 90% of local consumers prioritise businesses that offer superior customer service and consistent interactions.
Simultaneously, however, customer support costs are rising. Labour-intensive call centres, long wait times and inconsistent service quality have made traditional customer service models unsustainable.
AI-driven solutions are emerging as the driving force to address this imbalance, offering efficiency, cost savings and improved customer satisfaction.
The rise of AI in South African businesses
Business enterprises have moved beyond basic chatbots, which primarily served to engage customers and collect data. Their focus now is on adopting AI-powered solutions that enhance customer service representatives’ effectiveness through autonomous, continuously evolving tools.
- AI adoption is accelerating: Gartner’s 2024 Magic Quadrant for CRM Customer Engagement Centres notes a 35% increase in AI adoption in emerging markets, particularly in financial services and telecommunications.
- Africa’s AI market is expanding rapidly: It is projected to reach US$4.9-billion by 2025, with a compound annual growth rate (CAGR) of 27.4% between 2025 and 2030, culminating in a market volume of $16.5-billion by 2030.
- South Africa’s cloud sector is booming: It is expected to grow at a CAGR of 26% between 2023 and 2028, reaching R113-billion by 2028.
- AI-powered customer service tools can cut costs: Costs can be cut by 30% while improving customer satisfaction by up to 20%, according to McKinsey.
How AI is transforming customer support
AI-driven support tools go beyond basic automation to provide proactive, intelligent and personalised customer service experiences that streamline operations, improve response times and reduce support costs.
- Sentiment analysis: Detects frustration in customer messages and escalates critical cases.
- Intelligent ticket routing: Automatically assigns queries to the correct department, reducing wait times.
- Real-time chatbots: Understand customer intent and provide adaptive responses.
- Proactive engagement: Anticipates customer needs and initiates support before issues arise.
The impact of AI-driven customer service on the labour market
The call centre industry, a major employer in South Africa, is seeing a seismic shift as AI automates routine support tasks.
“The rise of AI-powered chatbots and virtual assistants is automating routine customer service tasks, posing a challenge to call centre jobs.” – Zoho
However, AI isn’t eliminating current jobs; it’s transforming them by automating lower-end processes so employees can focus on higher-value-generating activities. This has created demand for employees skilled in AI oversight, chatbot training and data analytics.
“AI will cause labour market disruptions, but it will also create new jobs that offset AI-related losses.” – Zoho
This shift is already happening. In South Africa, 96% of workers believe generative AI can enhance their job performance, and embrace AI as an effective tool rather than a threat.
“Companies that invest in reskilling and AI-human collaboration will be best positioned to lead the next phase of customer service innovation.” — Andrew Bourne, regional head for Southern Africa at Zoho
Is AI customer support compliant with South African law?
South African businesses must ensure compliance with the Protection of Personal Information Act (Popia).
“From a compliance perspective, businesses in South Africa will firstly need to ensure that their AI system is compliant with Popia.” – Zoho
Adherence to Popia is meant to limit the extent of automated decision making.
- Section 71 of the act prohibits fully automated decisions (for example, account suspensions) without human intervention.
- Businesses must implement hybrid AI-human review models to ensure compliance.
“Section 71 (1) of Popia protects data subjects from being subjected to a decision based solely on automated processing, which results in legal consequences.” – Zoho
While AI-driven support promises efficiency and cost savings for businesses, failure to comply could result in penalties, legal challenges and loss of customer trust.
Creating investor confidence and business sustainability
AI adoption is transforming customer service and attracting significant investments into South Africa’s tech ecosystem.
- Huawei Cloud has seen its business in South Africa grow 16-fold over five years, serving more than a thousand clients across various sectors.
- AI-driven efficiencies are expected to contribute up to $220-billion annually to Africa’s GDP by 2029.
South African businesses that embrace AI-driven customer service early will become trailblazers and breakout players, attracting investment opportunities in an AI-powered economy.
Embracing AI in South African business: the key to staying ahead
AI-powered customer support has now become a competitive necessity. Businesses leveraging AI solutions will improve efficiency, scale operations and enhance customer experience.
However, they must carefully navigate two key challenges to maximise their potential:
- Workforce transformation: AI will reshape roles to create higher-value opportunities.
- Regulatory compliance: AI tools must meet Popia automation and data privacy standards.
“With AI projected to contribute up to $220-billion annually to Africa’s GDP, businesses that fail to adapt risk falling behind in efficiency and investment.” – Zoho
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