Abstract
The integration of artificial intelligence (AI) into the banking sector has accelerated globally, with South African banks increasingly adopting AI to enhance operational efficiency and customer service. However, this technological shift presents both opportunities and challenges unique to the local context. This study aimed to explore the impact of AI on the South African banking industry, with a focus on current applications, adoption barriers, workforce implications, and strategic responses. Motivated by the need to understand how banks navigate digital transformation amid regulatory and skills-related constraints, the research employed a qualitative methodology involving semi-structured interviews with industry professionals and a comprehensive literature review. Key findings revealed that AI-driven tools, particularly chatbots and humanoid robots, are increasingly used in customer service. Challenges included data privacy concerns, limited regulatory frameworks, and a shortage of AI expertise. While automation posed a risk of job displacement, banks were found to be actively investing in employee upskilling to prepare for more complex, AI-supported roles. The study contributes to the growing body of knowledge on AI in emerging markets by providing practical recommendations, including policy development, strategic workforce planning, and leadership capacity building. It offers valuable insights for policymakers, banking executives, and scholars seeking to understand AI’s evolving role in South African banking.