In 2024, Nigerian fintech companies encountered challenges with regulatory compliance, facing fines and temporary bans on new user onboarding due to issues with anti-money laundering (AML) and fraud prevention standards. To address this, the leading fintech firms restructured their operations, enhancing compliance measures and intensifying data collection efforts to rebuild trust with regulators.
This period coincided with a significant change at the Central Bank of Nigeria (CBN), where several directors were retired, leading to a shift in regulatory approach towards the fintech industry.
The new directors demonstrated a more collaborative attitude towards fintech companies, enabling these firms to enhance their engagement with regulatory bodies. Notably, fintechs made progress in addressing compliance concerns raised by the CBN, particularly by improving data collection practices and reporting to the Nigerian Financial Intelligence Unit (NFIU) on various suspicious activities.
Fintechs like PalmPay and Moniepoint broadened their monitoring of suspicious transactions, introducing new measures to prevent fraudulent activities. Additionally, they incorporated facial recognition technology and enhanced security features within their applications to mitigate risks and protect user data.
Despite some user experience challenges, such as account blocks after large transactions, fintechs emphasized the necessity of these measures to combat fraud effectively. Overall, these efforts have been positively received by regulators, leading to a more favorable stance towards fintech security practices and compliance efforts.
Moving forward, sustained improvements in compliance and security measures will be crucial for Nigerian fintechs to maintain regulatory approval and ensure transparent supervision by regulatory authorities.