Nigerian Fintechs Turn to AI for Protection Against Rising Fraud
Nigeria’s fintech industry is leaning harder on AI fraud detection as account takeover attacks push the sector’s cybercrime losses into the hundreds of billions of naira. With digital payments now woven into daily life for millions of Nigerians, criminals are scaling up automated attacks, and operators say old-school defences like passwords and one-time passwords are no longer enough on their own.
According to a Businessday report, account takeover remains one of the most persistent threats fuelling banking-related fraud across the country. Between early 2023 and mid-2025, the financial services industry is estimated to have lost hundreds of billions of naira to digital fraud, while over 281,500 user accounts were exposed through data breaches and leaks in the first quarter of this year alone.
That scale of exposure is why AI fraud detection is now central to how leading platforms protect customers. PalmPay, one of Nigeria’s largest digital payments companies, says its security strategy rests on a multi-layered setup combining AI-powered monitoring, behavioural analytics, biometric verification, and continuous risk assessment to catch suspicious activity before money disappears.
Facial verification, paired with PIN and OTP checks, adds another barrier against criminals using stolen credentials. PalmPay has also rolled out a Fraud Case Management System that pulls fraud intelligence into one place, helping security teams spot patterns faster and respond before incidents escalate.
PalmPay’s anti-fraud manager, Omoruyi Aiyudu, said the industry needs a fundamental shift in how it approaches security. He described moving away from scattered, isolated controls toward a connected, intelligence-driven ecosystem that uses AI-driven detection and behavioural analytics to catch risks in real time.
The fight against fraud isn’t happening in isolation either. PalmPay has partnered with the Nigeria Police Force’s Cybersecurity Unit, supplying equipment to support cybercrime investigations, and has worked with the Nigerian Data Protection Commission to tighten compliance with the Nigeria Data Protection Act 2023.
Experts quoted in the report note that criminals are using AI and automation to scale their own attacks, turning fraud prevention into an ongoing arms race. Even with stronger AI fraud detection systems in place, consumer awareness still matters, phishing and social engineering scams continue to succeed when basic security habits are ignored.
For Nigeria’s fast-growing fintech sector, the takeaway is straightforward, AI-led security has moved from a future upgrade to a present-day necessity for keeping fraud losses in check.
