Nigeria’s Fintechs Turn to AI for Fraud Prevention: 87.5% Adoption, CBN Survey Shows

Artificial intelligence (AI) is becoming a cornerstone of Nigeria’s fintech ecosystem, with 87.5% of fintech companies deploying AI for fraud detection, according to the Central Bank of Nigeria’s (CBN) 2025 Fintech Report. The findings highlight how risk management is driving technology adoption in the country’s rapidly growing digital finance sector.

The report, part of CBN’s Policy Insight Series, draws on a nationwide fintech survey, a stakeholder workshop held in June 2025, and insights from the October 2025 Fintech Roundtable. It shows that fraud detection is by far the most common AI application, surpassing uses in customer service, credit assessment, and onboarding processes.

AI Adoption Across Nigerian Fintechs
In addition to fraud detection (87.5%), about 62.5% of fintechs use AI-powered chatbots for customer service, while 37.5% leverage AI for credit scoring and risk modeling. Another 37.5% apply AI to customer onboarding and KYC processes. Only 12.5% of firms reported not using AI at all.

The report emphasizes, “AI is widely adopted in Nigerian fintech, primarily for risk management and operational efficiency. Fraud detection remains the leading use case, reflecting the severity of fraud challenges across the industry.”

Fintech Growth and Fraud Risks
Nigeria’s fintech sector is expanding at a remarkable pace. In 2024, the country processed nearly 11 billion real-time payment transactions, more than double the volume from 2022, ranking it among the most active instant payment markets globally. However, rapid digitization has increased the risk exposure of the financial system. Fraud, weak controls in some scaling firms, and cross-border financial crimes remain significant concerns, despite strengthened anti-money laundering regulations, enhanced KYC standards, and Nigeria’s exit from the FATF grey list.

Interest in Responsible AI
Fintech companies are eager to scale AI adoption responsibly. Around 62.5% of respondents expressed strong interest in joining AI-focused regulatory sandboxes. Meanwhile, 75% prioritized ethical and transparent AI use in credit and risk decisions, emphasizing fair and inclusive access to AI tools and data.

Challenges to Scaling AI
Key barriers include limited access to technical talent and unclear regulatory guidance, each cited by 37.5% of fintechs. Half of the respondents highlighted the need for high-quality data and robust infrastructure as critical enablers for broader AI deployment, underlining the importance of reliable digital public systems like interoperable identity platforms and secure data-sharing frameworks.

Regulatory Compliance and Innovation Pressures
Compliance remains a significant factor shaping fintech operations. About 87.5% of firms reported that regulatory and risk management costs affect their ability to innovate. Meanwhile, 62.5% indicated that regulatory timelines delay product launches, with over one-third noting it can take more than a year to bring a new product to market due to approval and compliance hurdles. Opinions on regulation are split, with 50% viewing it as enabling and the other half considering it restrictive.

Collaboration with Regulators
Despite regulatory challenges, fintechs remain committed to collaboration. Every surveyed firm expressed readiness to engage with regulators through policy pilots, sandboxes, and structured working groups. The CBN views these insights as central to shaping innovation-friendly policies, expanding supervisory technology, and enhancing governance in AI, fraud intelligence, and digital identity infrastructure.

As Nigeria’s fintech landscape evolves, AI adoption will continue to be a critical tool in enhancing security, improving operational efficiency, and driving innovation in the financial services sector.