“In the last three to six months, a staggering 60% of African countries have undergone at least one level of legislative change,” noted Alex Daruty, Head of Commercial at Africa HR. These shifts reflect a dynamic regulatory environment shaped by rising fintech innovation across the continent. As fintechs scale, compliance has become both a necessity and a complex challenge.

In this edition of the Bridging Borders with Africa series, we examine the evolving compliance landscape for fintechs operating across Africa, the challenges they face, and how they are adapting. This aligns directly to Pillar 2 of our Five-Pillar Framework: Regulatory & Compliance. 

We also spotlight Regfyl, a unified compliance and fraud-prevention solution tailored to the needs of African financial institutions, with insights from its CEO and Co-Founder, Dr Tunde Ibidapo-Obe.

 

The Regulatory Landscape for Fintechs in Africa Today

As fintech adoption accelerates across Africa, regulators face the delicate task of balancing innovation with oversight. The African Financial Inclusion Policy Initiative Report (2023) highlights this tension, noting that authorities must “balance the benefits of fintech developments on financial inclusion while ensuring safe, stable, responsible, and secure financial products and services.”

To maintain trust and protect users, fintech regulation and compliance—ensuring that companies meet these regulatory standards—are becoming increasingly vital. Several core focus areas define the current regulatory landscape:

1. Anti-Money Laundering (AML) and Know Your Customer (KYC): AML and KYC frameworks are foundational pillars of fintech regulation in Africa. Companies must implement rigorous identity verification and transaction monitoring protocols. The importance of these measures is underscored by the Financial Action Task Force (FATF): as of May 2025, 14 of the 24 countries on its “grey list” for increased AML oversight are in Africa.
2. Data Privacy: Fintech business models rely heavily on processing large volumes of personal data, making data protection a top regulatory concern. In response, countries like Kenya, Nigeria, Ghana, and South Africa have passed national data privacy laws to safeguard consumer information.
3. Licensing Requirements: According to the 2024 State of Inclusive Instant Payment Systems in Africa report, licensing models are evolving. Traditional “one-size-fits-all” approaches are being replaced with risk-based, activity-specific frameworks. Nigeria and Kenya now offer tailored licenses for activities like crypto trading, crowdfunding, and robo-advisory. Similarly, Ghana and Rwanda have adopted tiered licensing regimes that align requirements with the complexity and risk of services offered.

Despite the complexity, there are promising developments:

• Regulatory sandboxes: Supervised environments for testing fintech innovations are gaining traction across Africa. As defined by Anton Didenko (2018), these sandboxes allow companies to trial new products before full-scale rollout. However, limited regulatory capacity and slow approval timelines mean only a small number of firms can benefit.
• Push for harmonization: Policymakers are increasingly working to align standards across licensing, AML/KYC, data protection, and consumer protection—reducing compliance burdens and enabling easier cross-border operations.

Nevertheless, even as the ecosystem matures, fintechs still face numerous regulatory hurdles. The table below outlines the most pressing challenges.

 

 

Cross-Border Considerations

Navigating compliance becomes even more complex when fintechs expand beyond national borders. Africa’s regulatory landscape is highly fragmented—each of the 54 countries operates under its own set of financial laws, many of which are outdated or lack clarity around digital services. This patchwork creates significant hurdles for companies with cross-border ambitions.

Key challenges include:

• No unified regulatory approach: There is no continent-wide framework governing fintech operations. Regulations for digital services such as crowdfunding or crypto assets vary widely—or, in many cases, don’t exist at all. This lack of consistency makes it difficult for fintechs to build scalable, pan-African solutions.
  
  
• Costly multi-jurisdictional compliance: Cross-border operations typically require licensing in both origin and destination countries, along with additional monitoring and regulatory reporting. Moreover, strict foreign exchange (FX) and capital flow controls in countries like Nigeria and Angola can delay settlements and limit the ability to repatriate funds.
  
  
• Increased regulatory scrutiny of illicit flows: With the rise of cross-border remittances, crypto transactions, and informal value transfer systems, regulators are increasingly cautious. The potential for money laundering, fraud, and terrorism financing has prompted tighter oversight and more complex compliance obligations.

Despite these challenges, regional efforts are underway to simplify and unify the landscape. The AfCFTA Digital Trade Protocol is a major step toward harmonizing digital trade regulations across the continent. Similarly, proposals for fintech license passporting—which would allow licensed firms to operate in multiple jurisdictions—are gaining traction. A promising example of this progress came in February 2025, when the Bank of Ghana and the National Bank of Rwanda signed a Memorandum of Understanding (MoU) to pilot a license passporting framework and enable cross-border payment interoperability between their markets. These early efforts signal a growing recognition that continental collaboration—not just national regulation—will be key to unlocking Africa’s digital financial future.

 

Impact of Compliance Breaches

The importance of strong compliance protocols becomes painfully clear when examining the consequences faced by fintechs that fall short. These breaches can result in substantial legal, financial, and reputational damage—sometimes with long-term consequences for business continuity.

As noted by Mauve Group (2024), “errors arising from inadequate research or preparation, or failure to stay abreast of rapidly evolving legislation—such as incorrect worker classification, tax adherence issues, or payroll administration non-compliance—can incur serious consequences, ranging from legal and financial, to reputational losses.”

Recent enforcement actions across the continent serve as a stark reminder that compliance is not optional. Below are recent examples of fintechs that have faced penalties for regulatory breaches.

 

                                                                                                                   Complied by Author

 

Introducing Regfyl: Streamlining Compliance and Fraud Prevention for Africa’s Financial Institutions

In a regulatory environment that’s becoming increasingly complex, Regfyl offers a much-needed solution for African financial institutions. Currently operating in Nigeria, Regfyl provides an all-in-one platform designed to simplify and streamline end-to-end compliance.

Built with African regulatory realities in mind, Regfyl enables institutions to efficiently synchronize compliance efforts, collaborate across teams, and execute critical tasks in fraud prevention, AML monitoring, and regulatory reporting—all within a single, AI-powered toolkit.

At the heart of Regfyl’s approach is the belief that simplicity is essential to effective compliance. Their platform focuses on three core areas:

• KYC Onboarding Support: Regfyl enhances customer due diligence by automatically identifying politically exposed persons (PEPs), monitoring both local and international sanctions lists, and conducting adverse media checks to flag reputational risks.
• Transaction Monitoring and Fraud Prevention: The platform leverages AI to monitor transactions in real time, detecting and flagging suspicious behavior to help prevent fraud before it occurs.
• Regulatory Filing Automation: Regfyl integrates directly with relevant regulatory bodies to simplify the submission of recurring compliance reports, ensuring that institutions stay audit-ready and aligned with their ongoing filing obligations.

By automating these critical functions, Regfyl reduces the burden on compliance teams and empowers fintechs and financial institutions to operate with greater confidence, accuracy, and resilience.

 

Spotlight Interview: Dr Tunde Ibidapo-Obe, CEO of Regfyl

What inspired you to start Regfyl?
I’ve always been passionate about legal and regulatory issues. Over a decade ago, I founded Law Padi, a legal education platform, which gave me firsthand exposure to the many pain points in this space. Compliance was the issue that kept coming up again and again. Through a bit of serendipity, I connected with my co-founder, who had also been thinking about these problems. What made it even more aligned was that I had completed a PhD with my thesis focusing on regulatory challenges—and my co-founder had also completed a PhD several years before with a focus on technology. We had the research, the experience, and the passion to try and solve it properly. That’s how Regfyl came to life.

How do you see Regfyl evolving in the coming years?
Right now, we’re focused on Nigerian financial institutions, but the goal is to expand both geographically and sector-wise. We're looking at use cases in other regulated industries like crypto, gaming, and health, and we want to build a solution that scales across the continent.

What’s the biggest misconception about the problem you’re solving?
Many people still see compliance as a “nice-to-have” rather than a core business necessity. They often treat the cost of compliance—such as per-transaction monitoring to prevent fraud—as an optional expense instead of a fundamental operational requirement. But compliance should be viewed just like paying salaries or office rent: a non-negotiable cost of doing business. The danger is that when compliance isn’t factored in as a necessary cost, it’s often overlooked or deprioritized—especially in early-stage planning or when profit margins are tight. This mindset is risky. The cost of non-compliance can be catastrophic—ranging from hefty regulatory fines to the complete loss of your license. In short, if you don’t take compliance seriously, you risk not having a business at all.

Another common misconception is that compliance ends at onboarding. In reality, it’s an ongoing process. You have to continuously monitor your customers and adapt your systems when their risk profile changes. For example, imagine someone onboarded today as low-risk. Six months later, they decide to run for public office—they’re now a PEP (Politically Exposed Person). If you’re not monitoring for that change, you’re exposed.

 

 

What have you learned from building in this space that other fintech founders should know?
Compliance is one of the most important parts of your business. If you don’t treat it that way, you’re operating on borrowed time. We’ve run internal models simulating penalties based on existing regulations. For a fintech with just 10,000 customers, if you miss a few compliance steps and regulators decided to fully enforce existing rules, you could be facing fines of up to ₦50 billion a month. Regulators don’t even need new laws—they just need to enforce the ones already in place. And increasingly, we’re seeing them do exactly that, as recent fines against operators have shown.

Are there other regions or markets solving this problem in ways you admire?
The UK’s Financial Conduct Authority (FCA) is a standout. They’re rigorous, fast-moving, and have set a standard that other regulators around the world are following. I respect how seriously they take oversight and how efficiently they act when financial institutions aren’t doing the right thing.

What ecosystem-wide changes would make it easier for startups like yours to succeed?
One major improvement would be greater coordination around financial institution reporting across West Africa—or ideally, the entire continent. While the African Continental Free Trade Area (AfCFTA) has been signed, the reality is that we still have too many regional bodies and disconnected regulatory systems. Each country’s financial framework tends to operate in isolation, which creates inefficiencies and complexity.

For fintechs, license portability would be a game changer. If a fintech is licensed to perform a certain activity in Nigeria, with minimal adjustments, they should be able to carry that license into Ghana or other markets. Of course, I understand the national considerations that make this complicated, but if we’re serious about building a pan-African fintech ecosystem, harmonization needs to be a priority.

Final Thoughts

For many early-stage fintechs, compliance often takes a back seat. But delaying it can have serious consequences—from steep financial penalties to the risk of being forced to shut down operations.

“Over 60% of fintechs globally faced at least one compliance fine exceeding $250,000 last year.”
—Alloy, 2023

As African fintechs push the boundaries of innovation, regulation is not a hurdle to overcome—it’s a cornerstone of sustainable growth. We’re already seeing regulators across the continent adopting a stricter and more proactive stance.

Platforms like Regfyl are helping fintechs stay ahead—by simplifying and streamlining compliance from day one. The result? Startups can scale with confidence, knowing that trust, resilience, and regulatory readiness are baked into their operations from the ground up.

Here’s how you can support their mission:

• Learn more and follow their journey at Regfyl
• Explore the platform to see how Regfyl simplifies compliance and fraud prevention for African financial institutions
• Share this story with fintech operators, compliance teams, or ecosystem builders navigating regulatory complexity in Africa

Know other startups tackling compliance or RegTech challenges on the continent? I’d love to hear about them. What do you see as the biggest gaps or innovations in this space? Feel free to drop a comment or reach out directly.