This article was contributed to TechCabal by Dipo Omogbenigun, Sales Director, Enterprise, Smile ID
Africa’s technological revolution is undeniable. Across the continent, thousands of companies are developing innovative solutions that serve millions daily, driving economic transformation at an unprecedented pace. With Africa now home to eight unicorns, the momentum and potential for further growth are clearer than ever.
Take Kenya, for instance—the country boasts one of the most advanced technology ecosystems in the region, with its digital economy projected to contribute up to 9.24% of GDP in 2025. Meanwhile, Nigeria’s 3MTT program highlights how governments leverage technology to accelerate economic development, equipping millions with the digital skills needed to thrive in an increasingly tech-driven world.
Africa isn’t just catching up—it’s setting the stage for a future where technology drives inclusive growth, innovation, and global competitiveness. However, with growth comes challenges. While these innovations bring immense benefits, they have also allowed bad actors. Over the past decade, Africa’s fraud landscape has evolved significantly, driven by the rise of AI-powered techniques that exploit digital vulnerabilities and target the continent’s rapidly expanding online user base. What was once a battle against traditional fraud has now escalated into a high-tech arms race, where attackers leverage AI to bypass security systems and manipulate data.
In response to the changing face of fraud, Smile ID has also had to evolve from an identity company to a security company focused on protecting our clients from millions of potential fraud attempts every day, every hour, and every minute. According to our recent findings, AI-powered selfie anomalies now account for 34% of new fraud tactics. Deepfake-related identity theft increased sevenfold between Q3 and Q4 of 2024, with criminals creating convincing synthetic faces to fool even advanced biometric systems.
What makes AI-based attacks so formidable is their adaptability. Fraudsters update their tactics in real-time, scanning for loopholes or inadequate security protocols; businesses relying on outdated systems soon find themselves in the crosshairs. For example, in East Africa, where inconsistent verification documents remain a problem, document fraud hit an alarming 27% rejection rate in 2024.
Reports last year indicate that one of Kenya’s largest lenders lost KSh1.5 billion to fraud. At the same time, Nigerian banks incurred ₦42.6 billion in fraud losses in Q2 2024 alone—surpassing the ₦9.4 billion recorded throughout 2023, according to the FITC. A particularly striking case came to light when Smile ID’s internal security team uncovered a global syndicate launching large-scale attacks on fintech companies, telecom operators, and banks across Africa and parts of Europe. Within 12 hours, more than 2.8 million fraudulent verification attempts were blocked – proof that these schemes can deploy at breathtaking speeds, targeting thousands of victims simultaneously.
A common misconception is that compliance is an extra layer of red tape that slows things down. It can be the difference between sustainable growth and being targeted by bad actors. Customers demand assurances that their data is safe, and regulators are clamping down on companies that fail to meet modern security standards. Rather than mere bureaucracy, securing compliance future-proofs businesses by reducing financial risks, protecting brand reputation and building smoother user experience. A well-secured platform also attracts investors who need to see credible risk mitigation before writing that first or follow-on cheque. In short, the proactive companies investing in robust compliance today are the best ones positioned for tomorrow’s opportunities.
This isn’t just a transition from analogue to digital – we are in the AI era, where the risks are far more significant. Fraud is no longer about physical theft; today, it’s like a mob of robbers attacking a bank virtually from halfway across the world. The difference? You don’t see it happening, but the damage is real.
Having worked with some of Africa’s fastest-growing businesses, including Flutterwave, Kuda, Paystack, and others, we have seen the significant benefits of proactively investing in vigorous compliance. As the continent continues to scale technological advancements, so have we.
While advanced technology or AI tools are the right approach to combat these, even the best tools need ecosystem-wide support to be effective. For Africa to achieve security, key players such as financial institutions, governments, regulators, and technology providers must unite. Compliance must shift from a reactive obligation to a proactive strategy that safeguards businesses and consumers while solidifying Africa’s leadership in digital innovation.
Africa’s potential to leapfrog traditional financial and commercial models is undeniable. Yet, as more businesses and citizens go online, safeguarding them becomes paramount. AI-driven fraud is rapidly evolving, and the reality is that those who fail to adapt risk financial losses and the erosion of trust that underpins any successful digital ecosystem. But true resilience depends on business leaders and regulators recognising that security isn’t an afterthought—it’s the bedrock of innovation and prosperity.
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Oladipo has close to two decades of experience in Fintech and digital payments. He was the first employee in Opay as the Director of Payment Solutions and Corporate Partnerships. He was also Moniepoint’s Senior Vice President and was responsible for commercial negotiations and partnerships. He was part of a three-man team that developed a Mobile Banking framework for a major bank across over 30 African countries.
