Regtech Adoption Rises in Sub-Saharan Africa as AI, Integration, and New Rules Reshape the Market
The regtech sector in Sub-Saharan Africa (SSA) expanded further in 2025 as financial institutions and regulators responded to rising compliance demands, evolving rules, and deeper regional integration, according to a new report from Regtech Africa.
The report says interest in regulatory technology is being driven by the need for faster, more cost-effective compliance tools across a financial landscape that is becoming more complex. It also points to artificial intelligence, blockchain, cloud computing, and digital identity systems as key technologies supporting adoption across the region.
AI becomes central to compliance operations
Artificial intelligence emerged as one of the most important themes in SSA’s regtech market last year. The report notes that about 62% of financial institutions now use AI-powered anti-money laundering (AML) and know-your-customer (KYC) tools. Transaction monitoring systems are also processing more than 850 million transactions each month, with false positives reduced by 45% to 70% compared with rule-based systems.
Several institutions have already moved beyond pilot projects. In South Africa, Absa Group has deployed AI-enhanced systems to strengthen fraud detection and financial crime controls, while reporting a drop of roughly 77% in false positives. In East Africa, I&M Group partnered with ThetaRay to roll out an AI-based AML compliance platform across its operations in Kenya, Tanzania, Rwanda, Uganda, and Mauritius.
Blockchain is also gaining ground. The report says 23% of SSA banks were exploring blockchain pilots in 2024, while eight central banks were studying the technology for central bank digital currency infrastructure. South Africa’s Project Khokha was highlighted as an example of a distributed ledger technology proof of concept for wholesale interbank payments.
Other technologies are also seeing wider use. Roughly 35% of SSA banks have implemented robotic process automation, cloud-based regtech now accounts for 60% of implementations, and 78% of digital banks use facial recognition for onboarding. Fingerprint authentication is also integrated into 12 national ID systems, according to the report.
Regional integration and regulation drive demand
Beyond technology adoption, the report identifies regional integration and regulatory change as major growth drivers. The African Continental Free Trade Area’s Digital Protocol, approved in February 2024, is intended to support a more harmonized framework for digital trade, data governance, market access, and emerging technologies.
Cross-border payment infrastructure is also advancing. 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.
At the same time, new regulatory requirements are increasing the need for automated compliance tools. Nigeria licensed its first crypto exchanges in 2024, while South Africa issued more than 70 licenses to crypto asset service providers that same year. In addition, Nigeria’s mandatory linkage of Bank Verification Numbers with National Identification Numbers, South Africa’s electronic foreign exchange reporting requirements, and Ghana’s mobile money interoperability rules are all adding compliance complexity.
Data protection rules are also creating new obligations around localization, consent management, breach notification, and portability, further supporting demand for regtech solutions.
Industry Analysis
The report suggests that SSA’s regtech market is moving from early adoption toward broader institutional use, with AI likely to play a larger role in predictive compliance over the next few years. As regulatory frameworks become more connected across markets, firms that can offer scalable, multi-jurisdiction solutions may be best positioned to benefit. The growth outlook will depend heavily on whether regulators can balance stronger oversight with harmonized standards and secure digital infrastructure.
Looking ahead, Regtech Africa expects predictive regtech, stronger public-private collaboration, and crypto compliance tools to become major themes over the next three to five years. The report also outlines three possible growth paths for the sector by 2030, ranging from 8% to 10% CAGR in a downside case to more than 25% in an upside scenario driven by continental standards and wider PAPSS adoption.
