A Nigerian fintech expert, Babatunde Esanju, has called on financial technology developers to prioritize artificial intelligence (AI) as a critical tool for combating fraud and broadening credit access. He warned that existing systems are struggling to keep up with rapidly evolving threats.
In a statement on the state of Nigeria's fintech ecosystem, Esanju noted that the country continues to lose billions of naira annually to financial fraud, while millions of creditworthy citizens remain excluded from formal lending systems. He attributed this challenge not to a lack of technology but to a “failure of imagination,” emphasizing that traditional fraud detection systems are increasingly ineffective against sophisticated, fast-evolving schemes.
AI as a Dynamic Solution
“The fraud challenge in Nigerian fintech is adversarial,” Esanju said, citing the rise of social engineering attacks, synthetic identities, and account takeovers. “Platforms relying on static, rule-based systems are fighting a losing battle, as fraudsters quickly adapt and exploit loopholes.”
He explained that AI-driven systems offer a more dynamic approach by learning patterns of normal behavior and flagging anomalies in real time. Such systems can analyze multiple data points—including transaction velocity, geolocation, and device activity—across millions of interactions within seconds.
Drawing from his experience working with institutions such as the Lagos State Employment Trust Fund and NSIA Insurance, Esanju noted that transitioning from rule-based systems to machine learning models has proven to be one of the most effective investments in fraud prevention.
Unlocking Credit Access
Beyond fraud, Esanju highlighted AI's potential to unlock credit access for millions of Nigerians currently excluded from traditional financial systems due to a lack of formal credit histories. He said AI-powered credit scoring can assess alternative data such as airtime purchases, bill payments, and transaction behavior, allowing lenders to evaluate individuals who have never taken formal loans.
“Nigeria has tens of millions of adults who are creditworthy but invisible to traditional credit systems,” he said. “AI can read their financial stories in ways legacy systems cannot.”
Caution Against Overreliance
However, Esanju cautioned against viewing AI as a “silver bullet,” warning of significant risks if not properly implemented. He pointed to concerns around data bias, poor data quality, and lack of transparency in automated decision-making. Biased datasets could lead to unfair outcomes, particularly for informal sector workers, while weak data integrity could result in inaccurate assessments.
He also emphasized the importance of explainability, noting that customers and regulators must be able to understand decisions made by AI systems.
Recommendations for Fintech Operators
Esanju advised fintech operators to prioritize data quality, embed compliance from the outset, and focus on building trust among users. He described trust as a core product in Nigeria's financial services landscape. He added that AI represents the most powerful tool available to build faster, safer, and more inclusive financial systems, urging stakeholders to focus not just on adoption but on responsible implementation.
