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By Chinenye Anuforo
Compliance and regulatory integrity are increasingly becoming the defining pillars of Nigeria’s banking industry as the sector evolves into a technology-driven ecosystem, according to James Edeh, Head of Compliance at FairMoney Microfinance Bank.
Edeh said the traditional measure of banking strength, once defined largely by balance sheet size and physical capital, is shifting toward trust, transparency and regulatory adherence as financial transactions become more digital.
He noted that Nigeria’s financial system processed about 11.2 billion electronic transactions in 2024, according to data from the Nigeria Inter-Bank Settlement System (NIBSS), highlighting the growing reliance on digital platforms.
“In a market where digital fraud and systemic volatility can erode trust overnight, compliance is no longer a back-office function but a key driver of customer confidence,” Edeh stated.
He explained that the evolving regulatory framework from institutions such as the Central Bank of Nigeria (CBN) and the Federal Competition and Consumer Protection Commission (FCCPC) has pushed financial institutions to prioritise transparency and consumer protection.
According to him, the introduction of the Digital, Electronic, Online, or Non-traditional Consumer Lending Regulations 2025 underscores regulators’ determination to ensure that financial innovation is accompanied by strong ethical and compliance standards.
Edeh also pointed to Nigeria’s exit from the Financial Action Task Force (FATF) grey list in October 2025 as evidence of improvements in the country’s Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) frameworks.
He added that the integration of the Bank Verification Number (BVN) and National Identification Number (NIN) into banking operations has strengthened identity verification and reduced fraud.
According to NIBSS data cited by Edeh, identity-related fraud declined significantly from ₦52.26 billion in 2024 to ₦25.85 billion in 2025, following the broader adoption of these digital identification systems.
Edeh further noted that ongoing regulatory reforms such as the CBN’s 2024–2026 bank recapitalisation programme, which requires minimum capital thresholds of up to ₦500 billion for international banks, are designed to strengthen financial institutions against economic shocks.
He also highlighted new capital requirements introduced by the Securities and Exchange Commission (SEC) for fintechs and digital asset operators, which took effect in January 2026 with compliance deadlines set for June 30, 2027.
Under the revised rules, robo-advisers must maintain ₦100 million in capital, crowdfunding intermediaries ₦200 million, while digital asset exchanges are required to hold at least ₦2 billion.
Speaking on FairMoney’s approach, Edeh said the microfinance bank has embedded compliance structures across its operations to ensure strict adherence to regulatory standards.
He explained that responsible lending practices, transparency in pricing, and adherence to the Nigeria Data Protection Act (NDPA) and FCCPC digital lending guidelines are central to the bank’s operations.
According to him, these measures are helping to build consumer confidence in digital financial services.
Edeh also disclosed that the bank’s national scale long-term issuer rating was upgraded from BBB(NG) to BBB+(NG) by Global Credit Rating (GCR) in late 2025, while its short-term rating improved from A3(NG) to A2(NG).
He revealed that FairMoney disbursed over ₦250 billion in loans in the 2025 financial year and paid more than ₦7 billion in interest to depositors, demonstrating growing customer trust in the platform.
Between 2021 and 2024, the bank also recorded significant growth in customer deposits, allowing it to fund over 56 per cent of its loan book through customer deposits.
Industry data from the Nigerian Exchange Limited and other banking sources show that total deposits in the Nigerian banking sector rose by 63 per cent to ₦136 trillion by late 2024, reflecting increasing confidence in the country’s digital financial infrastructure.
Edeh maintained that financial institutions that prioritise compliance and ethical governance will be better positioned to succeed in the evolving banking landscape.
“The winners in Nigeria’s banking sector will not necessarily be those with the largest marketing budgets but those with the strongest ethical foundations,” he said.
He added that strengthening transparency, data protection, and regulatory compliance will be critical for sustaining public trust and supporting Nigeria’s broader digital economic growth.
