FairMoney Microfinance Bank has emphasised the importance of regulatory compliance and consumer protection in building customer trust in Nigeria’s technology-driven banking sector.
Mr James Edeh, the bank’s Head of Compliance, stated this in a statement on Wednesday.
He said compliance should extend beyond regulatory obligations to encompass transparency, responsible lending, data protection and effective complaint resolution.
He added that financial institutions must ensure technological innovation is accompanied by safeguards that protect customers as digital platforms expand access to financial services.
According to him, customers need assurances that their funds are protected, their personal information is handled responsibly and financial products are presented in clear and fair terms.
Citing the Enhancing Financial Innovation and Access (EFInA) 2023 Access to Financial Services Survey, Edeh said formal financial inclusion rose from 56 per cent in 2020 to 64 per cent in 2023.
However, he noted that 26 per cent of Nigerian adults remained financially excluded, underscoring the need to expand access while strengthening consumer protection.
He said fintech companies and microfinance banks could leverage technology to improve access to payments, savings and credit but must manage the risks associated with digital financial services.
“The goal should not be to slow innovation through unnecessary controls.
“It is to ensure that innovation is developed within a framework that gives customers confidence in the services they are using,” he said.
Edeh advocated integrating compliance into product development and business processes rather than addressing regulatory concerns only after problems emerged.
He said decisions concerning data management, product design, lending, customer communication and complaint handling all had implications for consumer protection.
On digital lending, he stressed the importance of providing customers with clear information about loan terms, applicable charges and other material conditions.
He also highlighted the need for credible complaint channels and the responsible handling of customers’ personal information.
Edeh said FairMoney Microfinance Bank, licensed and regulated by the Central Bank of Nigeria (CBN), operated within a prudential framework designed to support the safety and soundness of the financial system.
He added that eligible deposits with the bank were insured by the Nigeria Deposit Insurance Corporation (NDIC), subject to applicable coverage limits and the scheme’s terms and conditions.
According to him, financial institutions must also comply with relevant consumer protection and data protection regulations, including applicable requirements issued by the CBN and the Federal Competition and Consumer Protection Commission (FCCPC).
Edeh said compliance provided a framework for aligning business growth and technological innovation with customers’ interests.
He added that the long-term success of digital banking would depend not only on technological efficiency but also on transparency, effective governance and financial institutions’ commitment to protecting customers.
“Technology may change how banking is delivered. It does not change the fundamental relationship between a financial institution and its customers.
“That relationship remains grounded in trust,” he said.
