Pastel and FintechNGR Team Up to Drive AI Adoption in Compliance

In a strategic move to modernize regulatory compliance in Nigeria’s financial sector, fintech platform Pastel has formed a partnership with FintechNGR, a leading non-profit fintech advocacy group. The collaboration aims to harness artificial intelligence (AI) tools to streamline anti-money laundering (AML), customer onboarding, and regulatory reporting processes across participating fintech companies.

The joint effort reflects growing recognition that manual compliance systems are costly, error-prone, and often lag behind fast-evolving digital finance ecosystems. Under the agreement, Pastel will deploy its AI-powered compliance engine across FintechNGR’s member network, offering automation of customer risk profiling, transaction monitoring alerts, and real-time sanction screenings.

According to executives from both organizations, the partnership will focus on implementing machine-learning algorithms trained on evolving local and global financial crime typologies. These tools are designed to detect unusual transactional behavior, identify high-risk individuals and entities, and reduce operational burden on compliance-facing teams within startups and early-stage fintechs.

The initiative also includes capacity-building components. FintechNGR will coordinate a series of virtual workshops and certification courses aimed at compliance officers in member firms. These sessions will cover topics such as interpreting AI models, integrating alert systems into existing operations, and translating regulatory guidelines into machine-readable rules — thereby making compliance not just possible, but accessible across a variety of organizational sizes.

Pastel’s CEO said the technology could significantly reduce false positives, a major pain point for many startups that struggle with resources for manual review. By leveraging AI, firms can slash investigation times from days to hours, reduce costs, and reallocate compliance personnel toward meaningful oversight work.

Early trials were reported to be promising. A pilot involving five fintech firms resulted in a 70 percent reduction in inaccurate alerts and a 60 percent improvement in suspicious activity reporting turnaround time. That allowed smaller players to reduce reliance on legacy software and expensive consultancy services.

Stakeholders believe the timing could not be better. With the Central Bank of Nigeria and financial intelligence units tightening enforcement on fintech firms, many smaller operators face growing demands for stricter AML controls under limited budgets. The Pastel–FintechNGR collaboration offers an affordable path to compliance without compromising agility.

Critics point out the need for transparency around AI decision-making and strong governance measures to avoid bias or algorithmic risk. In response, Pastel and FintechNGR pledged to launch a joint governance framework, with third-party audits of model performance and a peer-review mechanism for flagging inaccuracies or tuning thresholds.

Regulators have acknowledged the initiative. In preliminary remarks, officials from the Central Bank of Nigeria expressed support for private-sector-led innovation in compliance models, noting the potential to scale easily across the growing fintech ecosystem. The country’s evolving regulatory sandbox policy could serve as a testing ground for further AI-driven regulatory tools.

Both parties plan to roll out the programme in phases. Phase one involves refining AI models against Nigerian financial crime patterns and sanction databases. Phase two will expand onboarding to more fintech firms and integrate capabilities such as biometric verification and video KYC. A third phase is expected to include regulatory reporting tools directly linked to government data repositories.

Beyond fintech, organizers say the AI system could be adapted to other sectors under regulatory pressure—such as capital markets, payments, and microfinance. Partnerships are already underway with regulatory trade bodies considering pilot-testing these tools in other verticals.

In summary, the collaboration between Pastel and FintechNGR represents a forward-looking effort to bring advanced compliance technologies to Nigeria’s emerging digital finance space. By reducing costs, improving speed, and enhancing accuracy, the partnership has the potential to strengthen industry resilience and bolster investor confidence—provided issues of AI governance and transparency are effectively managed.