FairMoney Microfinance Bank’s Head of Compliance, James Edeh, says financial institutions must prioritise consumer protection, data privacy, responsible lending and transparency as technology reshapes Nigeria’s banking sector.
FairMoney Microfinance Bank has highlighted the importance of regulatory compliance and consumer protection in building trust in Nigeria’s technology-enabled financial services sector.
James Edeh, Head of Compliance at FairMoney Microfinance Bank, said compliance should go beyond meeting regulatory requirements to become an integral part of how financial institutions protect customers and deliver digital financial services.
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In an article titled “Compliance as a Foundation for Trust in Tech-Enabled Banking,” shared with Fintech Insights, Edeh argued that the systems governing customer information, transaction monitoring, product communication and complaint resolution are central to maintaining public confidence in banking.
He noted that as technology transforms financial services, compliance functions must increasingly support consumer protection while enabling responsible innovation.
According to Edeh, Nigeria’s progress in financial inclusion highlights both the opportunities offered by digital financial services and the responsibility of institutions to ensure customers are adequately protected.
Citing EFInA’s 2023 Access to Financial Services Survey, he noted that formal financial inclusion among Nigerian adults increased from 56 per cent in 2020 to 64 per cent in 2023, although 26 per cent remained financially excluded.
He said technology could expand access to payments, savings and credit, but financial institutions must ensure that customers understand the products they use and have confidence that their funds and personal information are handled responsibly.
Edeh also pointed to the evolving consumer protection framework in Nigeria, noting that expectations around transparency, fairness, responsible lending, data protection and complaint resolution are becoming increasingly important in digital finance.
He maintained that financial innovation should develop alongside appropriate safeguards rather than be slowed by unnecessary controls.
The FairMoney executive said compliance should be incorporated into product development and business processes from the outset, rather than treated as a function activated only when regulatory issues arise.
He explained that decisions involving data management, product design, lending practices, customer communication and complaint handling all have implications for consumer protection.
According to him, a strong compliance culture helps financial institutions identify potential risks early and integrate appropriate safeguards into their operations.
On digital lending, Edeh said technology could enable lenders to assess and serve a wider range of customers, but expanding access to credit must be accompanied by responsible practices.
He stressed that customers should receive clear and understandable information about product terms, conditions, applicable charges and other material features of financial services. He added that customers should also have access to credible channels for resolving complaints when problems arise.
Edeh said these principles inform FairMoney Microfinance Bank’s approach to compliance as a technology-enabled financial institution.
He noted that the bank operates under the regulatory oversight of the Central Bank of Nigeria (CBN), while eligible deposits are insured by the Nigeria Deposit Insurance Corporation (NDIC), subject to applicable coverage limits and scheme conditions.
He further emphasised that consumer protection responsibilities extend beyond prudential regulation to include transparency, responsible lending, data protection and effective complaint resolution, in line with applicable laws and regulatory requirements.
According to Edeh, compliance provides a framework for ensuring that commercial objectives, business growth and financial innovation remain consistent with customers’ interests.
He said the long-term success of technology-enabled finance would depend not only on the quality of the technology but also on the governance structures supporting it.
While customers may initially be attracted to digital financial services because of convenience, speed and accessibility, he argued that sustained confidence would depend on financial institutions demonstrating consistency, transparency and a commitment to protecting customers.
Edeh added that although technology continues to change how banking services are delivered, the relationship between financial institutions and their customers remains fundamentally based on trust.
He said protecting that trust should remain a central responsibility of the financial services industry as Nigeria’s digital economy continues to expand.
