Artificial intelligence has become a frontline defence against fraud in Nigeria’s fintech industry, with 87.5% of companies now deploying AI-powered systems to detect and prevent fraudulent activity, according to a new report by the Central Bank of Nigeria (CBN).
The findings are contained in the CBN Fintech Report 2025, released under the apex bank’s Policy Insight Series, and drawn from a nationwide ecosystem survey, a closed-door stakeholder workshop held in June 2025, and deliberations at the October 2025 CBN Fintech Roundtable.
The data highlights fraud prevention as the single most dominant application of AI within Nigeria’s fintech ecosystem, underscoring rising security concerns as digital payments, lending and remittance platforms scale rapidly across the country.
Nigerian fintechs tap AI defence as fraud becomes ‘big issue’
“AI is widely adopted in Nigerian fintech, primarily for risk management and operational efficiency. ‘Fraud detection’ is the most common use case by a significant margin,” the report states, adding that the issue was repeatedly described by industry players as a “big issue” during stakeholder engagements.
Beyond fraud detection, 62.5% of surveyed fintechs use AI-powered chatbots to manage customer service operations, reflecting growing automation in customer engagement. Meanwhile, 37.5% apply AI to credit scoring and risk modelling, with the same proportion leveraging the technology for customer onboarding and know-your-customer (KYC) processes. Only 12.5% of respondents say they have yet to integrate AI into their operations.
According to the CBN, the overwhelming focus on fraud-related AI deployment mirrors the broader threat landscape confronting Nigeria’s financial system, particularly as fintech firms assume a larger role in instant payments, digital lending and cross-border transactions.
The report frames these developments within a fast-expanding payments ecosystem. Nigeria processed nearly 11 billion real-time payment transactions in 2024, more than double the volume recorded in 2022, placing the country among the world’s most active instant payment markets.
However, the CBN warns that rapid digitisation has widened exposure to systemic risks. Fraud, weak internal controls among some fast-growing firms, and cross-border financial crime remain persistent challenges, even as Nigeria has tightened anti-money laundering oversight, strengthened KYC requirements and exited the Financial Action Task Force (FATF) grey list.
Despite these risks, fintech operators signal strong interest in expanding AI deployment; provided regulatory clarity improves. About 62.5% of respondents express strong interest in participating in an AI-focused regulatory sandbox, while 75% prioritise ethical, transparent and fair use of AI, particularly in credit and risk decision-making.
The report stresses that as AI becomes embedded in core financial services, governance frameworks, supervisory capacity and regulatory tools must evolve in parallel.
Industry respondents also point to barriers slowing deeper AI integration. Limited access to skilled technical talent and regulatory uncertainty are each cited by 37.5% of firms as major constraints. Meanwhile, 50% say access to high-quality data and infrastructure is the most critical factor for scaling AI use: reinforcing the importance of digital public infrastructure such as interoperable identity systems and trusted data-sharing frameworks.
Beyond AI, the survey captures mounting regulatory pressure across the fintech landscape. 87.5% of respondents say compliance and risk management costs significantly constrain innovation, while 62.5% report that regulatory timelines delay product launches. More than one-third say it takes over a year to bring new products to market due to approval and compliance processes.
Perceptions of regulation remain divided: half of respondents describe the regulatory environment as supportive, while the other half view it as restrictive, citing delays, unclear guidance and inconsistent rule application.
Even so, engagement appetite remains strong. All surveyed fintech firms express willingness to collaborate more closely with regulators, through policy pilots, regulatory sandboxes and structured working groups. The CBN says these insights are shaping its policy direction, including innovation-friendly regulation, expanded supervisory technology, shared compliance utilities, and closer collaboration on AI governance, fraud intelligence and digital identity infrastructure.
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