In 2025, the regtech industry in Sub-Saharan Africa (SSA) continued to grow and mature, fuel by growing demand for efficient, cost-effective compliance solutions, evolving regulatory frameworks, and increasing regional integration, according to a new industry report by Regtech Africa, a digital tech media and consultancy platform.
Soaring adoption of AI and emerging technologies
Several trends shaped the space in 2025. Artificial intelligence (AI), in particular, emerged as a prominent topic, recognized for its potential to enhance regulatory compliance, automate risk monitoring, and improve the efficiency of reporting processes.
According to the report, approximately 62% of financial institutions now implement AI-powered anti-money laundering (AML) and know-your-customer (KYC), while transaction monitoring systems are processing over 850 million transactions monthly, reducing false positives by 45-70% compared to rule-based approaches.
In South Africa, Absa Group has deployed AI-enhanced systems to improve fraud detection and anti-financial-crime capabilities, reporting significant reductions in false positives by about 77%, while improving risk detection compared with legacy rule-based systems.
In East Africa, I&M Group, a major regional bank with operations in Kenya, Tanzania, Rwanda, Uganda, and Mauritius, partnered with ThetaRay to deploy an AI AML compliance platform that includes AI-enhanced transaction monitoring, customer risk scoring, sanctions screening, investigations, and reporting.
Blockchain is another technology that is seeing increased adoption. In 2024, 23% of SSA banks were exploring blockchain pilots, and eight central banks were studying blockchain for central bank digital currency (CBDC) infrastructure, underscoring the growing recognition of blockchain’s potential to enhance transparency, security, and efficiency in financial systems.
One relevant example is Project Khokha by the South African Reserve Bank (SARB), a distributed ledger technology (DLT)-based proof-of-concept for a wholesale interbank payment system involving settlement banks. The blockchain network processed typical daily payment volumes with transaction privacy and finality, while allowing the central bank visibility for oversight.
Other emerging trends in SSA’s regtech sector include the growing adoption of robotic process automation (RPA), with 35% of SSA banks implementing RPA solutions; cloud-based regtech, which now accounts for 60% of implementations up from 42% in 2022; and biometrics and digital identity technologies, with 78% of digital banks now using facial recognition for onboarding and fingerprint authentication integrated into 12 national ID systems.
Regional integration and regulatory developments drive regtech adoption
Regional integration is another key driver of regtech adoption in SSA and is exemplified by initiatives such as the African Continental Free Trade Area (AfCFTA) Digital Protocol.
Approved in February 2024, this initiative aims to create a more harmonized framework to promote Africa’s digitalization and the development of digital-related industries and trade in digital products. It covers areas such as market access, data governance, digital trade inclusion, emerging technologies, transparency on government regulation, and capacity building.
Similarly, the Pan-African Payment and Settlement System (PAPSS) has expanded to 18 countries, 52 commercial banks, and 12 switches, enabling real-time cross-border payments in local currencies and supporting broader African economic integration.
Regulatory developments are also accelerating regtech adoption. In the cryptocurrency space, Nigeria licensed its first crypto exchanges in 2024, while South Africa issued more than 70 licenses to crypto service providers that same year.
These developments are prompting firms to improve compliance management, automate reporting and monitoring, and reduce risks and costs.
Additional measures driving adoption of regtech include Nigeria’s mandatory linkage of Bank Verification Numbers (BVN) with their National Identification Numbers (NIN), South Africa’s requirement for internal reporting systems that electronically report foreign exchange and cross-border transaction data to the SARB’s Financial Surveillance Department (FinSurv), and Ghana’s mandated mobile money interoperability across operators.
The evolving data protection landscape is also creating new compliance demands, including data localization, consent management systems, breach notification requirements, and rights to data portability.
Outlook
Looking forward, the report highlights several trends expected to define the SSA regtech industry over the next three to five years.
In particular, predictive regtech is set to become increasingly important as AI and machine learning (ML) evolve beyond basic monitoring to provide automatic regulatory horizon scanning, assess the impact of new regulations in real-time across multiple jurisdictions, and enable forward-looking scenario planning to identify potential compliance breaches before they occur.
Collaboration between the public and the private sector is also expected to deepen, especially within the context of continental integration, with harmonized regulatory standards and potentially shared secure digital infrastructure to facilitate easier scaling of regtech solutions.
As digital assets and blockchain gain regulatory clarity, regtech solutions for monitoring, taxing and regulatory decentralized transactions will become a major growth area.
Finally, the report presents three possible scenarios for regtech adoption in SSA by 2030. In the base-case scenario, the sector is projected to grow at a compound annual growth rate (CAGR) of about 18%, driven by sandbox conversions, API adoption, and incremental suptech budgets.
In the downside scenario, growth is expected at 8-10% CAGR, constrained by regulatory fragmentation and restrictive cross-border data rules, concentrating growth in tier-one economies.
In the upside scenario, growth could exceed 25% CAGR, driven by coordinated continental standards, shared supervisory datasets, rapid PAPSS adoption, and the emergence of pan-African regtech platforms.
This article first appeared on fintechnews.ae
Featured image: Edited by Fintech News Middle East, based on images via Wikipedia, and AHMAD ASHRAF via Freepik
