Artificial Intelligence in Financial Services: Rethinking Financial Regulation, Consumer Protection and Institutional Accountability in Nigeria

Abstract

Artificial intelligence has increasingly influenced financial services through automated credit assessment, fraud detection, compliance, customer service, and risk management. This study discussed Artificial Intelligence in Financial Services: Rethinking Financial Regulation, Consumer Protection, and Institutional Accountability in Nigeria. It embraced a doctrinal methodology with an analytical and comparative approach and explored Nigerian legislation, regulatory instruments, and pertinent scholarship. It was discovered that Central Bank of Nigeria Act 2007, Banks and Other Financial Institutions Act 2020, Federal Competition and Consumer Protection Act 2018 and Nigeria Data Protection Act 2023, had laid important foundations in regulating AI-enabled financial activities. However, the institutional structure had not been adequately integrated, and the issues of algorithmic bias, explainability, automated decision-making, and third-party technological responsibility and effective redress have not been sufficiently addressed. In the study it is thus proposed to establish a risk-based framework for AI systems, with algorithmic impact assessment, meaningful transparency, human oversight, institutional accountability, coordinated supervision, and accessible remedies. It said that the “usage of AI should have created innovation and financial inclusion while not compromising consumer rights and with technology's complexity not hiding legal accountability.”