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Financial institutions in Nigeria and throughout Africa have been encouraged to implement real-time tools that can match the rapid pace of digital financial transactions in order to combat fraud.
This insight was shared during the second edition of a Breakfast Meeting organized by Pastel, an AI-driven enterprise solution provider, in collaboration with FintechNGR.
According to the 2024 Nigeria Inter-Bank Settlement System (NIBSS) Fraud Report, banks in Nigeria suffered losses of N52.26 billion to fraud last year, marking a staggering 196 per cent increase from the previous year.
The high-profile meeting included senior banking executives, regulators, and fintech operators who discussed the increasing importance of AI and automation in fraud prevention, regulatory compliance, and enhancing operational resilience.
This discussion follows the Central Bank of Nigeria (CBN)’s recent draft directive proposing Baseline Standards for Automated Anti-Money Laundering (AML) Solutions, highlighting the urgent necessity for institutions to implement proactive compliance measures.
Additionally, a report presented at the event indicated that Africa loses $50 billion annually due to illicit financial flows, with 12 of the 24 countries on the FATF greylist being located in Africa.
Analysts warned that this scenario could lead to heightened scrutiny of cross-border transactions, stricter due diligence requirements, and adverse effects on investment and trade opportunities.
The CEO of Pastel, Abuzar Royesh, pointed out that beyond the financial damage, the reputational consequences underline the pressing need for more robust, technology-driven compliance systems that foster transparency and instill confidence in Africa's financial landscape.
He asserted the company's dedication to creating solutions that address Africa’s specific operational and regulatory challenges. Central to the event was Sigma, Pastel’s premier AI-powered solution, which is already being utilized by an increasing number of Nigerian institutions.
Royesh stated that Sigma was developed using local regulatory frameworks and data, emphasizing that it is a purpose-built solution, not a retrofit of a Western system.
The Chief Revenue Officer at Pastel, Anthony Amodu, discussed the shortcomings of conventional compliance systems, remarking that "manual reporting and fragmented monitoring can no longer keep pace with today’s threats."
He stated that Sigma delivers the speed, clarity, and accountability needed by C-suite executives to remain compliant and competitive. In his keynote address, Stanley Jacob, the President of FintechNGR and CEO of Zest Payment Limited, represented by Seun Folorunsho, underscored the global shift toward AI for compliance.
He noted that financial institutions worldwide are spending over $200 billion annually on AI tools for regulatory compliance and stressed that Nigeria must align with this reality. Wede Thompson, the Chief Compliance Officer at Optimus Bank, led a discussion emphasizing that regulation ultimately revolves around trust.
He remarked that if trust is to be established using artificial intelligence, banks, fintechs, and regulators must collaborate closely with the end customer in mind.
During a panel discussion, Babafemi Ogungbamila, Executive Vice President of Operations and Technology at Interswitch, highlighted the importance of explainability, accountability, and regulatory compliance in AI systems.
The Chief Finance Officer of Coronation Merchant Bank, Arini Awotunde, emphasized that artificial intelligence should not only automate compliance but also enhance it, stressing the need for innovation and ethics to go hand in hand.
Head of People and Operations at Pastel, Yeyetunde Caxton-Martins, reaffirmed the company’s commitment to industry collaboration and its vision to develop intelligent compliance infrastructure, highlighting that Sigma is how it assists institutions in transforming burdens into advantages.
