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South Africa has become the latest jurisdiction to unveil its plans for AI, using a new policy framework to warn that outdated legislation risks hindering its progress.
The release of a national AI framework by South Africa's Department of Communications and Digital Technologies marks the beginning of efforts to formulate a comprehensive AI policy, aimed at guiding the responsible development and implementation of AI technologies across the nation.
“The strong push from technological and economic imperatives, combined with the aspirational pull of economic transformation and social equity, suggests a powerful momentum towards adopting a comprehensive AI policy,” the report says.
According to the South African regulator, without a coherent and comprehensive policy position, “these benefits could be overshadowed by potential risks such as job displacement, privacy concerns, and ethical dilemmas”.
This is why the department believes that the National AI Policy will provide “clear guidelines and a structured approach to harnessing AI’s potential while mitigating its risks”, ensuring that AI technologies are developed in a manner that aligns with South Africa’s socioeconomic goals and values.
According to the regulator, a key rationale for establishing this policy is to foster sectoral strategies that address specific needs and opportunities within different industries, including finance.
“By laying down an overarching policy position, the National AI Policy will enable the development of tailored strategies that leverage AI to drive innovation and efficiency in each sector,” it said.
However, the report also says “balancing immediate technological advancements with long-term social goals will be crucial”.
The department has opened a formal consultation period, set to conclude by the end of September 2024, during which stakeholders are encouraged to provide feedback on the proposed framework.
This consultation is seen as a critical step in ensuring that the policy reflects diverse perspectives and addresses the unique challenges and opportunities AI presents to South Africa.
According to the regulator, “developing a comprehensive AI policy for South Africa is crucial amidst rapid global advancements in AI technology, offering significant opportunities for economic growth, societal improvement, and positioning the country as a leader in innovation”.
However, the policy document acknowledges that the country faces challenges including “historical inequalities, digital divides, and outdated regulatory frameworks that hinder widespread AI adoption”.
The framework document highlights the need for careful consideration of AI's ethical, social, and economic impacts to fully harness its potential.
It emphasises that although AI offers tremendous benefits, these should be broadly shared, and its risks must be effectively managed.
Central to the framework is the concept of human-centred AI, which advocates for AI applications that enhance rather than replace human decision-making.
This approach aims to create an environment that not only supports AI innovation but also aligns with South Africa's broader societal goals.
The report identifies several key focus areas, as the country works towards developing a National AI Policy.
These include the cultivation of talent to build a robust AI workforce, the enhancement of digital infrastructure, the establishment of ethical AI guidelines and the assurance of safety and security in AI deployment.
The policy will offer clear guidelines and a structured approach to maximising AI’s potential while mitigating associated risks.
AI Elsewhere, AI Everywhere
2024 has undoubtedly been the year AI has hit the priority list for regulators across the world.
Many countries are ahead of South Africa, with their focus on AI policy becoming more targeted. Financial regulators are beginning to share their positions on the use of AI.
For example, the UK’s Financial Conduct Authority has said that it wants to “promote the safe and responsible use of AI in UK financial markets and leverage AI in a way that drives beneficial innovation”.
“We see beneficial innovation as a vital component of effective competition,” the regulator said, adding that it is focusing on how firms can safely and responsibly adopt the technology, as well as understanding what impact AI innovations are having on consumers and markets.
Meanwhile, in June, the Commission de Surveillance du Secteur Financier (CSSF) and the Central Bank of Luxembourg (BCL) published a questionnaire concerning the use of AI across payment institutions (PIs) and e-money institutions (EMIs), among other entities, and the European Commission also published a targeted consultation on AI in the financial sector.
And this month, the European Central Bank’s Piero Cipollone said that AI could bring “profound changes” to payments, and said the technology has the potential to enable customised services, foster financial inclusion, and enhance oversight and early warning systems for financial stability.
