Over the years, Nigerian fintechs and startups have been recognised for their relentless pace and success in addressing financial exclusion. Yet, as the ecosystem matures, that rapid growth is now confronting a tightening regulatory environment.
This shift has created a high demand for proper corporate structuring, strict regulatory compliance, and effective communication between service providers and their customers.
This critical pivot point was the central focus of a panel discussion on Day 2 of the Moonshot by TechCabal event, held in Lagos on Thursday, October 16th, 2025.
The session, titled “Scale, Compliance and the Cost of Growth in African fintech,” argued that compliance is no longer optional; it is the non-negotiable cost of entry for any company seeking long-term success.
Moderated by TechNext Editor Ejike Kanife, the panel offered a clear roadmap for navigating these regulatory hurdles. It featured key insights from industry leaders such as Tomi Oduyemi, Growth Leader at Cardtonic; Toni Akinmolayan, Senior Software Engineer at Busha; and Lukman Bello, Technical Solutions Lead at Paystack.
Read also: “Verification compliance is not an obstacle” – CBN tells innovators at Nigeria Fintech Week
The mistakes of market expansion and local trust
The allure of new markets often drives fintech growth, but each new entry comes with its own unique regulatory environment. Addressing the common pitfalls that startups encounter during expansion, the panel highlighted a major mistake of ignoring local context.
Tomi Oduyemi of Cardtonic pointed out the danger of using a generic approach, saying, “A Common mistake that I have seen many companies make is going into a new market with a generalised knowledge of compliance and ignoring the local market’s trust psychology.”
She explained that before launching a product, companies must pay attention not just to the regulatory policies and licenses, but also to the necessary documentation that builds user trust. Trust is compliance.
Compliance costs such as legal, operational, and technical expenses can be a heavy burden, especially for new ventures. However, founders can budget for these costs without stalling their growth.
Toni Akinmolayan of Busha, speaking from the crypto sector, acknowledged that compliance can be very expensive. For a volatile sector like crypto, this compliance deepens as the user base grows.
His key advice for startups is to partner or leverage existing licensed platforms. This method allows startups to grow while learning the ropes, making compliance a strategic advantage rather than a simple expense.
“The more users you have, the more compliance you have to make. It’s almost like plug and play. Leveraging existing APIs that can handle your compliance and transaction processing already has a license. So that way you’re cutting down a lot of costs and still pulling alongside,” he said.
Read also: Equity funding into African fintech startups declines by 88% in Q3
Building partnerships with regulators
For Nigerian fintechs to stay afloat, they must secure investor confidence and reassure regulators.
Lukman Bello of Paystack emphasised that achieving this starts with being proactive and transparent. He championed a collaborative mindset, urging startups to view regulators as “partners, not like they are police.” He noted that startups and regulators share the same goal, which is protecting the ecosystem.
However, a perennial challenge for startups is balancing the pressure to innovate quickly with the slow, tedious process of meeting licensing, KYC, and consumer protection requirements. But once a company has the necessary licenses and partnerships, the doors open for innovation.
To foster this relationship, Bello advised fintechs to reach out to the regulator before there is a problem, invite them to product demonstrations, and present a clear plan to resolve issues immediately after an audit.
“Any startup that treats regulators as partners, not police, ends up building the most sustainable kind of startups,” Bello said.
Addressing the issue of uneven regulatory frameworks across different African countries and succumbing to the reality of building partnerships with regulators, Tomi Oduyemi shared a dose of reality about cross-border scaling.
“While regional harmonisation of rules might look good on paper, it’s not very practical. Regulatory bodies draft policies based on their unique local experiences and cultural nuances,” she said.
Instead of waiting for an impossible pan-African rulebook, Oduyemi suggested that collaboration and shared databases among independent regional regulators are more feasible.
“If, as a fintech, you build discipline while at home, it will be easier for you to earn the trust of the regulatory bodies when you are now ready to scale to other parts of Africa,” she said.
Read also: Meet the top 10 Nigerian women leading fintech growth in 2025
