Presidency Backs RegTech to Drive Financial Inclusion in Nigeria

ABUJA — The Nigerian Presidency has identified regulatory technology, known as RegTech, as a key instrument for achieving broader financial inclusion and building a trusted digital economy. The declaration came during a policy forum on digital finance held in Abuja on Monday.

Senior Special Assistant to the President on Financial System Strategy, Dr Tope Fasua, said the government sees RegTech as a bridge between regulatory compliance and financial access. He said technology-driven regulation can bring more Nigerians into the formal financial system while simultaneously improving the safety and integrity of digital transactions.

RegTech refers to technologies that help financial institutions comply with regulations more efficiently and cost-effectively. These include automated Know Your Customer systems, real-time transaction monitoring, fraud detection algorithms, and digital identity verification tools.

“RegTech is not just about compliance. It is about trust. When Nigerians trust that the digital financial system is safe, they will use it. And when they use it, millions more can access credit, savings, insurance, and other services that have historically been out of reach,” Fasua said.

Why RegTech Matters for Nigeria

Nigeria has approximately 36 percent of its adult population without access to formal financial services. This unbanked population misses out on credit, insurance, digital payments, and savings products. Bringing them into the formal system is one of the CBN’s top strategic priorities.

RegTech can lower the cost of serving low-income and rural customers. Traditional Know Your Customer processes require physical documentation and in-person verification that is expensive to provide in remote areas. Digital identity and biometric verification can perform the same function remotely and at a fraction of the cost.

Furthermore, RegTech directly addresses the suspicious transaction reporting challenge flagged by the NFIU. The 82,000 suspicious transactions flagged in 2024 were identified largely because of improved detection technology. More sophisticated RegTech tools across a wider range of institutions would catch even more financial crime.

Industry Response

Nigerian fintech companies welcomed the government’s RegTech endorsement. Several startups including Mono, Prembly, and Youverify have built RegTech products specifically for the Nigerian market. They said government recognition and procurement of such tools would accelerate their growth.

Banks said they are already investing heavily in RegTech as part of their compliance with the CBN’s June 10 cybersecurity deadline. Several institutions have deployed AI-powered transaction monitoring systems in recent months. They called on the government to create a clear regulatory sandbox for new RegTech products.

The Central Bank of Nigeria said it is reviewing its framework for RegTech adoption. The bank said it will issue guidance on approved RegTech standards before the end of the third quarter of 2026. A clear framework will give both financial institutions and RegTech providers the certainty they need to invest and scale their solutions.