Head of Compliance at FairMoney Microfinance Bank, James Edeh.
Head of Compliance at FairMoney Microfinance Bank, James Edeh, has called on industry operators to prioritise responsible lending, customer data privacy and transparent operations to build sustainable consumer trust in digital banking.
Edeh noted that although rapid digital innovation had broadened access to financial services, it must be supported by strong regulatory compliance and stringent consumer protection measures.
The expert, in a statement on Wednesday, said compliance can no longer be viewed strictly as an internal back-office duty meant only to satisfy regulatory mandates, emphasising that in a technology-driven environment, compliance serves as a core structural element designed to safeguard consumers and maintain operational integrity across digital touchpoints.
Edeh noted that EFInA’s 2023 Access to Financial Services Survey showed formal financial inclusion in Nigeria rose from 56 per cent in 2020 to 64 per cent in 2023, leaving 26 per cent of adults financially excluded. While digital tools help close this gap, he cautioned that expanding access requires financial institutions to manage risks deliberately as services scale.
Highlighting the necessity of responsible conduct in digital lending, Edeh stated, “Technology can expand lenders’ ability to assess and serve a wider range of customers. But increased access must be accompanied by responsible conduct. Customers should be provided with clear, relevant and understandable information about the terms, conditions, applicable charges and other material features of the financial products they use. They should have confidence that their information will be treated appropriately and that, where concerns arise, there are credible channels through which those concerns can be addressed.”
Edeh further explained that maintaining consumer confidence requires financial institutions to embed regulatory controls during product conceptualisation rather than reacting after operational issues occur. “This requires compliance to be considered early in the development of products and processes, rather than at the point when a regulatory issue arises. Decisions about data, product design, lending, customer communication and complaints management all have consumer protection implications. A strong compliance culture helps institutions identify those implications and incorporate appropriate safeguards into the way they operate,” Edeh asserted.
Addressing the broader role of the compliance function, Edeh stressed that institutions must look past narrow regulatory compliance to achieve long-term market stability: “For a compliance function, this means moving beyond a narrow conception of regulatory adherence.
“The purpose of compliance is not simply to determine whether an institution has met a particular rule. At its best, it provides a structured way of ensuring that growth, innovation and commercial objectives remain consistent with the interests and protection of customers,” he explained.
Concluding his assessment of the sector, Edeh emphasised that despite technological shifts, trust remains the core foundation of banking relationships. “The success of tech-enabled finance will depend not only on the quality of the technology behind it, but also on the quality of the governance surrounding it. Customers may be attracted initially by convenience, speed or access. Their longer-term confidence, however, will depend on whether institutions demonstrate consistency, transparency and a clear commitment to protecting their interests,” Edeh said.
He added, “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. In an increasingly digital financial system, protecting that trust must remain a central responsibility of the industry”.