Executives in the Nigerian fintech sector are preparing for an upcoming regulatory overhaul by the central bank aimed at tightening controls to combat persistent fraud issues.
Yemi Cardoso, Nigeria’s central bank governor, announced plans in November 2023 to review licenses granted to financial institutions, especially in the technology-driven payment services sector.
The move signifies a shift from the previous approach of allowing startups to introduce products freely before regulators catch up.
Details of the new requirements have not been disclosed yet. The Fintech Association of Nigeria is awaiting notification of the regulations, and its chief operating officer, Babatunde Obrimah, expressed hope that the central bank would engage with them for input before finalizing the regulations.
As fintech operators anticipate regulatory guidance, they are proactively addressing the fraud problem, which saw a 277% increase in the first half of 2023, costing deposit-taking institutions 9.7 billion naira.
The Fintech Association, comprising commercial banks, startups, and advisory firms, is working on a decentralized fraud-prevention platform.
The group, planning to announce progress by the end of March, aims to facilitate information sharing on suspected customers while respecting data privacy rights. Uzoma Dozie, CEO of digital bank Sparkle and chair of the CEO committee, highlighted the platform’s focus on preventing fraud collaboratively.
