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Picture this: You’re preparing a client report with the help of artificial intelligence. In minutes, the tool summarises contracts, drafts neat compliance notes, and even suggests risk controls. It feels like having a supercharged assistant at your fingertips. But then a thought creeps in: What just happened to the personal information you fed into the system?

In a world where AI is transforming how we work, South Africa’s Protection of Personal Information Act (POPIA) still stands as the guardrail that governs how data is collected, stored, and used. And here lies the tension: AI thrives on data, while POPIA insists on strict boundaries. The big question for businesses is whether these two forces can coexist, or whether they’re destined to clash.

Why AI and POPIA are on a Collision Course

AI systems are built to learn from as much information as possible. Every upload, every prompt, every dataset becomes fuel for algorithms to generate smarter outputs. POPIA, on the other hand, insists on data minimisation and purpose limitation. In other words: Collect only what you need and use it only for the purpose you told people about.

That creates a clear conflict. Upload an employee file into a public AI platform, and suddenly you might be processing special personal information – such as ID numbers, medical history, or salary details – outside of the safeguards required by law. What felt like efficiency could, in fact, be a compliance breach.

Read more: Data compliance perspective under POPIA

The POPIA Risks Hiding in AI

When it comes to AI, the risks aren’t always obvious. Here are some of the biggest pitfalls that businesses face:

1. Over-Collection of Data

AI thrives on quantity. The more you give it, the “smarter” it seems. But POPIA’s golden rule is “less is more”. Feeding unnecessary personal details into an AI tool creates risks of over-processing, which is something that the law was designed to prevent.

Example: Uploading entire employee records (instead of just anonymised training data) into an AI system means that you’ve shared far more information than necessary, opening the door to non-compliance.

2. Cross-Border Data Transfers

Most AI tools don’t live on South African servers; they’re hosted overseas. Under POPIA, sending data abroad counts as a transborder transfer and comes with strict rules. You’ll need to make sure that the recipient country offers adequate protection, or put additional safeguards in place, such as Operator Agreements.

Example: Feeding customer details into an AI-powered marketing platform based in the US could mean that you’ve transferred personal information to a foreign third party, without proper authorisation.

3. Automated Decisions Without Oversight

POPIA protects people from being subject to unfair automated decisions. If an AI tool rejects a loan application, denies someone a job, or even downgrades a client without a human in the loop, that’s a red flag. The law requires meaningful human oversight in these processes.

4. Accountability Black Holes

Here’s the tricky part: when AI gets it wrong, who takes the blame? POPIA doesn’t point the finger at the algorithm. Accountability always rests with the Responsible Party i.e. your organisation. In other words, “AI did it” won’t hold up in front of the Information Regulator.

Read more: Risk Mitigation in Labour Law – How Consultancy Saves You Money

The Other Side of the Story: AI as a Compliance Tool

It’s not all doom and gloom though. Used correctly, AI can help businesses to strengthen compliance rather than weaken it by:

• Detecting anomalies: AI can monitor large datasets and flag unusual activity, helping to detect potential breaches faster than humans could.
• Automating compliance tasks: Drafting policies, summarising risk assessments, and even generating compliance calendars can be streamlined with AI.
• Supporting data security: Some AI tools can identify weak security points or unusual login patterns that may indicate a cyber-attack.
• Boosting efficiency: Instead of spending weeks drafting and revising policies, businesses can use AI to accelerate the process, provided the final product is vetted for legal accuracy.

This means that AI isn’t inherently a foe. It’s a tool. And like any tool, its safety depends on how you use it.  Read our article on: Top Reasons Why POPI Compliance Should Be a Priority in 2025

Making AI POPIA-Friendly

So, how do businesses strike the balance between innovation and compliance? Here are some practical steps:

• Update policies and frameworks: Your Data Protection Policy, Information Security Policy, and Promotion of Access to Information Act (PAIA) Manual should explicitly mention how AI is used in your organisation. Transparency is key.
• Conduct risk assessments: Before rolling out a new AI tool, run a POPIA Compliance Risk Assessment. This will highlight whether you’re exposing yourself to risks such as cross-border data transfers or missing consent requirements.
• Refresh privacy notices: Customers and employees have the right to know when AI is being used to process their data. Update privacy notices and terms to include this.
• Invest in employee training: A policy is only as strong as the people implementing it. Training staff to understand AI’s risks and what data can and can’t be shared, will go a long way in reducing accidental breaches.
• Vet your vendors: If you’re using an external AI provider, ask tough questions: Where is the data stored? How is it encrypted? Who has access to it? And don’t forget to update Operator Agreements.

A Practical Example

Let’s imagine two businesses:

Business A uses AI to analyse customer purchase data. They anonymise the information, stripping out names, ID numbers, and contact details. The tool identifies patterns, and the business makes better stock decisions – without touching personal information.

Business B uploads entire customer records, including addresses and credit card details, into the same AI system hosted abroad. They’ve now triggered a cross-border transfer, collected more information than needed, and failed to get explicit consent.

Same tool, very different outcomes. One business stays compliant, the other steps straight into a POPIA violation.

The Compliance Opportunity

Here’s the twist: The very same legislation that creates challenges also creates opportunities. Businesses that adopt AI responsibly, with POPIA in mind, can:

• Build trust with clients and employees by showing that they value privacy,
• Strengthen their security posture with AI-driven monitoring tools,
• Save time and costs by automating routine compliance tasks, and
• Stay ahead of competitors by integrating technology with strong governance.

POPIA doesn’t stop innovation; it ensures that innovation is done responsibly.

Read: A 10-Step POPIA Compliance Checklist for South African SMEs

Final Thoughts

Artificial intelligence isn’t going anywhere. Businesses that ignore it risk falling behind, while those that adopt it recklessly risk falling foul of the law. The trick is not to choose between AI and POPIA, but to make them work together.

The message from POPIA is simple: Innovation doesn’t cancel accountability. If you’re using AI to process personal information, you are still the Responsible Party. That means updating your policies, training your people, and holding your vendors accountable.

Do this right, and AI won’t be your compliance foe, it will be your compliance ally.

Speak to Labournet today about POPIA-aligned AI adoption.