Afrigather Kuda Financial institution, Moniepoint, OPay, and Palmpay have responded to the central financial institution’s April ban by increasing their compliance and fraud monitoring groups, poaching expertise from industrial banks and different fintechs.
Since Might, Moniepoint has expanded its transaction monitoring crew, hiring 5 individuals. Two of these hires have been long-time OPay workers with at the least three years expertise on the fintech, whereas one other joined from Flutterwave. The fintech additionally added at the least six fraud and compliance crew members in 2024 and a crew lead, bringing a decade of expertise in Nigeria’s banking {industry}, checks on LinkedIn reveals.
Kuda has employed three compliance analysts, a Nigerian Inter-Financial institution Settlement Scheme compliance supervisor, and two fraud crew members. OPay added 4 members to its authorized crew this yr, whereas Palmpay employed six compliance workers, together with a senior supervisor with over a decade of expertise at Union Financial institution, checks on LinkedIn reveals.
It is a shift from an industry-wide stance that when noticed compliance as hindering development. Earlier than the ban, fintech’s danger evaluation skewed in direction of minimal compliance staffing and relaxed buyer KYC necessities for account opening as they slowed down buyer acquisition, however a December 2023 central financial institution guideline and the April ban have modified that stance.
Regulators, frightened in regards to the velocity at which fintech accounts might be opened, banned the fintechs from opening new accounts and gave the fintechs an inventory of situations that included limiting peer-to-peer crypto transactions and mandating KYC for all tiered accounts.
Individuals acquainted with the matter informed TechCabal that the elevated concentrate on compliance was a part of the situations for lifting the ban and aligns with the Central Financial institution of Nigeria’s (CBN) harder stance on fintechs. The fintechs have been requested to enhance transaction monitoring, introduce correct buyer administration options, and tighten Know Your Buyer (KYC) necessities.
“Compliance has at all times been a significant a part of our monetary inclusion efforts, and as such, we knew that coming into a brand new yr in 2024 and off the again of a brand new authorities, there was at all times going to be improved regulatory scrutiny,” an individual acquainted with the hiring patterns of the fintechs informed TechCabal.
As Nigerian fintechs turned ubiquitous and influential, they confronted criticism for lax KYC measures and a notion that they assist dangerous actors get away with fraud. “Clients can simply open Tier 3 accounts on fintech platforms in seconds. [The NSA] have been frightened that fintechs are speedy [in opening accounts] and informed us to cease onboarding,” Tosin Eniolorunda, Moniepoint’s CEO, mentioned in Might.
The hires ought to assist ease regulatory tensions and mitigate fraud in Nigeria’s fintech {industry} as compliance groups assist be sure that present and future services and products meet regulatory requirements.
“The central financial institution needs the fintechs to be extra compliant, and so they want extra palms to make that occur. Transaction monitoring is a 24-hour job, so you should rent many individuals and managers to take possession,” one individual acquainted with the talks informed TechCabal.
A must please traders has additionally performed an element within the compliance workers demand, as traders need their portfolio corporations to be in regulatory-safe waters. Though fintechs are ramping up their compliance groups, solely time will inform if these efforts are sufficient to curb fraud in Nigeria’s fintech {industry}.
