Fintech Trends To Watch in 2025

Africa is becoming a major player in the global fintech landscape. McKinsey estimates that the African financial services market could generate as much as $230 billion in annual revenues in 2025 ^[1] . With the rise of fintech in Africa comes key trends turning the tide, including regulatory developments and innovation, digital payments and mobile money expansion, artificial intelligence and automation, and now increasingly, cybersecurity, alternative credit models, and embedded finance solutions ^[2] . With this in mind, what is the future of FinTech in 2025?

Regulatory Developments & Innovation

The rise of innovation has come with an increased need to ensure that regulatory developments are complementing these changes and not curtailing the efforts that are being made. A key question for deliberation is: How do we promote innovation and ensure the relevant rules are present to adequately govern it, yet ensure these rules do not become a hindrance?

A notable example is Paystack introducing Zap, a new product to foster fast and seamless payments for customers ^[3] . Though this is an innovative app created by Paystack, it faced a ₦250M fine from the Central Bank of Nigeria because it does not have a microfinance banking license, which is needed for the funds holding feature on their new app.

Although it is commendable to see how they are approaching enhancing their customers’ experience when making purchases, developing innovative products such as this should not come at the expense of breaching regulatory rules. With the rise of fintech in Africa and regulatory bodies assessing compliance, there will likely be more of such cases. Due to this, innovators should ensure a thorough review is made with legal consultants to ensure that products being built are regulatory compliant.

A growing trend in this space is the Fintech-as-a-Service (FaaS) and Open Finance model, enabling companies to build products faster using APIs and banking infrastructure. However, this makes regulatory clarity and real-time compliance more urgent than ever, particularly as more non-traditional players enter financial services.

Digital and Mobile Payments: Considering Cybersecurity

With innovation, the expansion of digital and mobile payments is expected. The increasing adoption of cashless transactions is driven by consumer demand. This ranges from convenience to government-led financial inclusion policies, and the CBN’s Payment Service Bank (PSB) licensing framework, enabling non-bank entities, including telecom companies and fintech start-ups, to provide basic financial services.

This expansion has significantly increased banking penetration in previously underserved communities, allowing individuals and small businesses in rural and remote areas to access formal financial services ^[4] . Mobile money platforms have emerged as critical enablers of financial transactions, facilitating peer-to-peer transfers, bill payments, and merchant transactions through mobile wallets and digital banking applications.

Though mobile payments have become increasingly accessible, issues with cybersecurity are rising and are likely to remain a trend in 2025 unless adequately curtailed. These issues include hacking, malware attacks, and fraudulent payments. Positive Technologies’ Cybersecurity Threatscape for African Countries 2022–2023 reported that 97% of leaders of large financial institutions in Africa believe that cybercrime poses a big threat. In 2022 alone, Nigeria lost over $500 million, according to Nigeria’s Economic and Financial Crimes Commission ^[5] .

Kenya too lost $83 million to cybercrime in 2023. A key question to ask is how to strike an appropriate balance between promoting digital and mobile payments and ensuring customers’ data is not compromised. Cybersecurity issues, unless effectively dealt with, could begin to counteract the significant progress that has been made. Many African countries, for example, lack adequate legal frameworks for cybersecurity. Timely reforms are needed to ensure that new developments do not compromise customers’ data.

In 2025, we will also see the rise of zero-trust cybersecurity frameworks, increased investments in real-time fraud detection, and partnerships between fintech and cybersecurity startups as a defensive strategy becomes a competitive edge.

Artificial Intelligence and Automation

The increased use of digital payments has led to the integration of AI in transforming these payments through customer experience, automated support, and improved fraud protection ^[6] . Utilizing AI in facilitating digital payments is projected to increase in 2025, with forecasts projecting the African AI market to reach $6.9 billion in revenue by 2024 ^[7] .

Strategic partnerships are forming to accelerate this growth, such as Vodafone and Microsoft’s $1.5 billion deal in January 2024 ^[7] . This partnership is expected to bring generative AI, digital services, and cloud infrastructure to over 300 million customers. Complementing this, the African Union (AU) developed its strategy document to improve AI uptake on the continent in July 2024 ^[7] .

In 2025, expect to see more AI-powered financial advisors, smart underwriting engines, and intelligent chatbots as fintech aim to serve millions more with lean teams and smarter systems.

Other Notable 2025 Trends to Watch

Here are some other trends to watch out for:

Alternative Credit Models:

Fintechs are leveraging telco, utility, and behavioral data to build credit scoring systems for thin-file or unbanked populations. This innovation is particularly vital in African countries where traditional credit histories are scarce.

Embedded Finance:

Expect to see financial services like credit, insurance, or payments embedded directly into platforms such as e-commerce, agriculture tech, and mobility apps. This Fintech trends in 2025 in Nigeria increase accessibility and convenience, especially for SMEs.

Central Bank Digital Currencies (CBDCs) & Stablecoins:

While Nigeria has already launched the eNaira, 2025 may see improved adoption frameworks and integration with existing financial systems. This could enhance remittances and simplify cross-border transactions in the continent’s regional blocs.

Conclusion

As fintech makes waves across Africa, it is clear that the sector is at a critical inflection point. The Financial trends for 2025 shaping the ecosystem, regulatory innovation, digital payments, cybersecurity, AI, alternative credit scoring, and embedded finance will require collaboration, compliance, and capacity building.

While it is encouraging to see the strides being taken, fintech companies must ensure regulatory alignment when developing new products. For countries still lacking legal and technical infrastructure, swift reform is essential to fully harness the opportunities of fintech and ensure a secure, inclusive, and innovative financial future for all.

References:

[1] https://www.mckinsey.com/industries/financial-services/our-insights/fintech-in-africa-the-end-of-the-beginning/
[2]https://techcabal.com/2025/03/24/prospects-for-payment-service-providers-in-africa-2025-challenges-opportunities-and-trends/ [3] https://techcabal.com/2025/04/30/cbn-fines-paystack/ [4] https://practiceguides.chambers.com/practice-guides/fintech-2025/nigeria/trends-and-developments/ [5] https://fintechnews.africa/44750/fintechafrica/key-fintech-trends-in-africa-to-watch-in-2025/ [6] https://techcabal.com/2025/03/24/prospects-for-payment-service-providers-in-africa-2025-challenges-opportunities-and-trends/ [7] https://fintechnews.africa/44750/fintechafrica/key-fintech-trends-in-africa-to-watch-in-2025/