Compliance Now Key Capital in Nigeria’s Banking Sector – Fairmoney

The head of compliance at FairMoney Microfinance Bank, James Edeh, has said that regulatory compliance has emerged as the new currency in Nigeria’s banking sector, as digital finance continues to reshape how financial institutions build trust and sustain growth.

In a statement issued to reporters in Lagos, Edeh said that in an era where financial services are increasingly technology-driven, the strength of compliance systems has become as important as capital adequacy and liquidity in determining the credibility of financial institutions.

According to him, Nigeria’s financial industry is witnessing a major transition from traditional banking structures to a tech-enabled ecosystem, noting that the country processed about 11.2 billion electronic transactions in 2024 through the Nigeria Inter-Bank Settlement System (NIBSS).

“In the traditional halls of Nigerian finance, capital was once defined solely by the strength of a balance sheet and the depth of physical vaults. However, as the industry transitions into a tech-enabled era, the definition of capital has undergone a fundamental shift,” Edeh said.

He noted that in the current financial landscape, characterised by increasing digital transactions and evolving risks, a bank’s commitment to regulatory compliance has become a crucial factor in maintaining public confidence.

“In 2026, ‘character’ has emerged as the most vital form of liquidity. In a market where digital fraud and systemic volatility can erode trust overnight, a bank’s commitment to regulatory compliance is no longer a back-office function; it is the primary bridge that builds and sustains customer confidence,” he said.

Edeh explained that Nigeria’s regulatory environment has evolved significantly in recent years, with institutions such as the Central Bank of Nigeria and the Federal Competition and Consumer Protection Commission strengthening oversight to ensure responsible innovation in the financial sector.

He pointed out that the introduction of the Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations 2025 has further reinforced the principle that financial innovation must be guided by integrity and consumer protection.

The compliance expert also highlighted Nigeria’s removal from the Financial Action Task Force grey list in October 2025 as a milestone that signalled stronger Anti-Money Laundering and Counter-Terrorism Financing frameworks in the country.

According to him, the mandatory integration of the Bank Verification Number (BVN) and National Identification Number (NIN) has strengthened identity verification across the financial sector, contributing to a significant decline in fraud losses.

While data from NIBSS showed that reported fraud losses dropped from ₦52.26 billion in 2024 to ₦25.85 billion in 2025 following the integration of identity verification systems across financial platforms.

Edeh said compliance has also become central to the operational strategy of FairMoney, noting that the institution has built a proactive compliance framework that embeds oversight, governance and transparent reporting across its operations.

“At FairMoney MFB, compliance is far more than a regulatory checkbox; it is the bedrock of our operational integrity and strategic growth,” he said.

He added that adherence to responsible lending practices, including strict compliance with the Nigeria Data Protection Act and digital lending guidelines issued by regulators, has helped strengthen consumer confidence in digital financial services.

Edeh noted that this compliance-driven approach has contributed to growing trust in the institution, reflected in its recent credit rating upgrade by Global Credit Rating.

The bank’s national scale long-term issuer rating was upgraded from BBB(NG) to BBB+(NG), while its short-term rating improved from A3(NG) to A2(NG), reflecting stronger operational stability.

According to the bank, it disbursed over ₦250 billion in loans in the 2025 financial year and paid more than ₦7 billion in interest to savers, demonstrating its ability to generate value for customers relying on digital lending and savings platforms.

Edeh further said that growing confidence in regulated digital banking institutions is also contributing to increased deposits across the Nigerian banking sector.

Industry data shows that total deposits in the banking sector rose by 63 per cent to about ₦136 trillion by late 2024, as more Nigerians gained confidence in the safety of digital financial infrastructure.

He added that the future of the country’s banking industry will depend largely on institutions that prioritise ethical governance and regulatory compliance.

“The winners in the Nigerian banking sector will not be those with the largest marketing budgets, but those with the strongest ethical spine. Compliance is the bridge that connects a sceptical populace to the digital economy,” he said.

Edeh stressed that by embracing transparency and strict regulatory standards, financial institutions are not only meeting legal requirements but also investing in the most valuable asset in banking, public trust.