Financial fraud has emerged as a global scourge, with staggering implications for individuals, businesses, and economies worldwide. A report from the Internet Crime Complaint Center (IC3) ranks Nigeria third globally in cybercrime, accounting for 13 percent of reported incidents.
In 2023, the Nigeria Inter-Bank Settlement System (NIBSS) reported that Nigerian financial institutions lost ₦17.6 billion ($11.2 million) to fraud. This marks a 496 percent increase in fraud losses over five years, rising from ₦2.96 billion ($1.8 million) in 2019. Additionally, an analysis of some of the cases reported in the news showed that ₦82.4 billion ($52.6 million) was lost in six fraud cases in Nigeria.
In response to this growing challenge, Pastel Africa, a leading provider of AI-powered solutions for the financial sector, convened an exclusive breakfast meeting for industry leaders in partnership with Fintech NGR to explore AI’s transformative power in safeguarding financial security.
The event brought together a distinguished group of industry experts, fintech innovators, financial institutions, and financial crime regulatory bodies to discuss the latest trends, challenges, and opportunities in fraud prevention. Attendees learned from renowned speakers, participated in engaging panel discussions, and witnessed live demonstrations of cutting-edge AI technologies.
In his welcome address, Seun Folorunso, Project and Relationship Manager at the FinTech Association of Nigeria (FintechNGR), spoke about the event and their collaboration with Pastel Africa, describing the event as “lifesaving.”
He emphasized that issues around fraud are very central to all financial system players, and conversations about how fraud can be curtailed and fostering collaborations are very key to the future of financial services not only in Nigeria but on the continent.
“We need to have these kinds of conversations that deepen collaboration,” he added.
He also highlighted inadequate infrastructure, the absence of regulations to prevent unethical use of AI, and a lack of investment as some of the challenges and impediments faced by the Nigerian financial ecosystem in the implementation and integration of AI.
Muhammed Jiya, the Chief Operating Officer, Emerging Technologies and Innovation Sector at the Nigerian Financial Intelligence Unit (NFIU), commented on the event and the NFIU’s collaboration with Pastel Africa, saying, “We appreciate Pastel Africa for the invitation and for bringing together stakeholders in the AML/CFT sector, financial operators, and tech experts to have this important discussion.
At the NFIU, we are always delighted to be involved in conversations that enable us to fight crime and be on top of the game. Speaking on the crucial role of technology in anti-money laundering and combating the financing of terrorism, he noted, “It’s clear that we must leverage the expertise of technology professionals to enhance our operations. Given the volume of data that we deal with and the pattern of crimes that we fight, we cannot be 100 percent effective if done manually without the use of technology.”
He further emphasized the need for continuous improvement and public-private partnerships (PPP) between the Nigerian Financial Intelligence Unit (NFIU) and public sector operators through strategic collaborations and information sharing.
The event also included case study presentations that showcased real-world applications of AI technology in identifying and mitigating fraudulent activities.
Attendees were given the opportunity to experience interactive demonstrations of Pastel’s AI-powered product, Sigma, a suite of solutions including AI-based real-time fraud detection, anti-money laundering, and credit decisioning tools and software, providing a firsthand look at how AI can be used to implement security measures across the industry and improve fraud prevention.
The panel discussions emphasized the significant challenges in the financial ecosystem, such as the lack of data sharing, inadequate data collection, and data privacy issues, which have hindered the effective use and integration of AI in combating financial crimes. The panelists also urged tech experts to tailor AI solutions to address Africa’s unique challenges.
Anthony Amodu, a senior executive for Pastel Africa, spoke about the company and the significance of the event to the African Financial Ecosystem, saying, “At Pastel Africa, we build AI-powered solutions that directly tackle the problems specifically faced by banks and financial institutions in emerging markets.”
Speaking about the event, he said, “This is the first event that focuses on the use of AI in fraud detection and more generally about the use of AI in the financial sector. Events like this are important because we want to make sure that we are making use of the latest cutting-edge technology that has been developed.”
Amodu said Pastel Africa is a tech company and the basis of the company is to help businesses enhances their processes and operations.
The first sector Pastel Africa decided to focus on is the banking sector and that is why they are having this event adding that they are trying to bring about a collaboration among the parties in the financial sector to have a better understanding of fraud, the causes of fraud, the characteristics of it and technology available today that can help determine process and even track the fraud attempts as they happen.
He said this is to ensure that the industry is not just reacting anymore but are proactively anticipating fraud and the only way to do this successfully is to take advantage of the advanced technology available to us.
He noted that some of these advanced technology are artificial intelligence and data, so that these can work together to create model and processes that can enhance the ability to reduce and at some point, eliminate fraud and reinstitute trust in the system.
“The breakfast meeting is an inaugural event and we hope that we will be encouraged by our partners to continue to do this. Our target is to do this on a quarterly basis if we can but if not, we hope that we will continue this this at least.
“We have asked for information to be shared across all the participants and one of the things we are going to initiate is a newsletter.
“Through the newsletter, we will communicate the actions, the wins, the gains, the pains and create an ecosystem that we will be sharing initial knowledge as this is one of the critical aspects of effectively fighting fraud.
“If you don’t share your experiences and instances of fraud when they happen to you, then other people are not able to get the advantage of that experience and once they don’t get that experience, they can’t use it in their various institutions to identify this fraud attempts and prevent it,” Amodu added.
