This text was contributed to TechCabal by Dipo Omogbenigun, Gross sales Director, Enterprise, Smile ID
Africa’s technological revolution is plain. Throughout the continent, hundreds of corporations are creating progressive options that serve tens of millions day by day, driving financial transformation at an unprecedented tempo. With Africa now house to eight unicorns, the momentum and potential for additional progress are clearer than ever.
Take Kenya, as an example—the nation boasts one of the crucial superior expertise ecosystems within the area, with its digital economic system projected to contribute as much as 9.24% of GDP in 2025. In the meantime, Nigeria’s 3MTT program highlights how governments leverage expertise to speed up financial improvement, equipping tens of millions with the digital expertise wanted to thrive in an more and more tech-driven world.
Africa isn’t simply catching up—it’s setting the stage for a future the place expertise drives inclusive progress, innovation, and international competitiveness. Nonetheless, with progress comes challenges. Whereas these improvements deliver immense advantages, they’ve additionally allowed unhealthy actors. Over the previous decade, Africa’s fraud panorama has advanced considerably, pushed by the rise of AI-powered strategies that exploit digital vulnerabilities and goal the continent’s quickly increasing on-line person base. What was as soon as a battle towards conventional fraud has now escalated right into a high-tech arms race, the place attackers leverage AI to bypass safety programs and manipulate information.
In response to the altering face of fraud, Smile ID has additionally needed to evolve from an identification firm to a safety firm targeted on defending our purchasers from tens of millions of potential fraud makes an attempt daily, each hour, and each minute. In accordance with our latest findings, AI-powered selfie anomalies now account for 34% of latest fraud techniques. Deepfake-related identification theft elevated sevenfold between Q3 and This autumn of 2024, with criminals creating convincing artificial faces to idiot even superior biometric programs.
What makes AI-based assaults so formidable is their adaptability. Fraudsters replace their techniques in real-time, scanning for loopholes or insufficient safety protocols; companies counting on outdated programs quickly discover themselves within the crosshairs. For instance, in East Africa, the place inconsistent verification paperwork stay an issue, doc fraud hit an alarming 27% rejection fee in 2024.
Studies final yr point out that certainly one of Kenya’s largest lenders misplaced KSh1.5 billion to fraud. On the identical time, Nigerian banks incurred ₦42.6 billion in fraud losses in Q2 2024 alone—surpassing the ₦9.4 billion recorded all through 2023, in response to the FITC. A very putting case got here to gentle when Smile ID’s inner safety workforce uncovered a worldwide syndicate launching large-scale assaults on fintech corporations, telecom operators, and banks throughout Africa and elements of Europe. Inside 12 hours, greater than 2.8 million fraudulent verification makes an attempt have been blocked – proof that these schemes can deploy at breathtaking speeds, concentrating on hundreds of victims concurrently.
A standard false impression is that compliance is an additional layer of crimson tape that slows issues down. It may be the distinction between sustainable progress and being focused by unhealthy actors. Prospects demand assurances that their information is secure, and regulators are clamping down on corporations that fail to fulfill fashionable safety requirements. Relatively than mere forms, securing compliance future-proofs companies by decreasing monetary dangers, defending model status and constructing smoother person expertise. A well-secured platform additionally attracts traders who have to see credible threat mitigation earlier than writing that first or follow-on cheque. In brief, the proactive corporations investing in sturdy compliance in the present day are the most effective ones positioned for tomorrow’s alternatives.
This isn’t only a transition from analogue to digital – we’re within the AI period, the place the dangers are way more important. Fraud is not about bodily theft; in the present day, it’s like a mob of robbers attacking a financial institution just about from midway the world over. The distinction? You don’t see it occurring, however the harm is actual.
Having labored with a few of Africa’s fastest-growing companies, together with Flutterwave, Kuda, Paystack, and others, now we have seen the numerous advantages of proactively investing in vigorous compliance. Because the continent continues to scale technological developments, so have we.
Whereas superior expertise or AI instruments are the precise method to fight these, even the most effective instruments want ecosystem-wide help to be efficient. For Africa to attain safety, key gamers equivalent to monetary establishments, governments, regulators, and expertise suppliers should unite. Compliance should shift from a reactive obligation to a proactive technique that safeguards companies and shoppers whereas solidifying Africa’s management in digital innovation.
Africa’s potential to leapfrog conventional monetary and business fashions is plain. But, as extra companies and residents go surfing, safeguarding them turns into paramount. AI-driven fraud is quickly evolving, and the fact is that those that fail to adapt threat monetary losses and the erosion of belief that underpins any profitable digital ecosystem. However true resilience is dependent upon enterprise leaders and regulators recognising that safety isn’t an afterthought—it’s the bedrock of innovation and prosperity.
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Oladipo has near twenty years of expertise in Fintech and digital funds. He was the primary worker in Opay because the Director of Fee Options and Company Partnerships. He was additionally Moniepoint’s Senior Vice President and was chargeable for business negotiations and partnerships. He was a part of a three-man workforce that developed a Cell Banking framework for a serious financial institution throughout over 30 African international locations.
