How AI, Embedded Finance and Decentralised Savings Models are Shaping the Future of Savings in Nigeria

In this decade and beyond, financial inclusion is more than just access but about deepening usage amongst the unserved and underserved.

The financial inclusion landscape is experiencing a significant change as digital transformation becomes the mainstay in shaping financial services such as savings and investment options for low-income households, alongside the financial behaviours and decisions these individuals seek to make for their futures. As of 2024, there are 31 operational IPS across 26 African countries, with an additional 27 nations preparing to launch similar systems (SIIPS 2024 report). The year on year (YoY) growth trajectory has a correlation with affordable and increased internet penetration, driving ease of adoption of mobile money, all of which has laid a solid foundation for enhanced savings mechanisms.

With more available digital financial transaction data, matched with a regional interoperable emerging digital financial infrastructure – it is only inevitable that to drive scale, efficiency and seamless experience – Artificial Intelligence (AI), embedded finance, and decentralised savings models are future trends to watch out for a future where financial inclusion expands, and savings become more automated, efficient, and tailored to individual needs.

According to the Enhancing Financial Innovation & Access (EFInA) Access to Finance (A2F) 2023 survey, 64% of Nigerians use formal accounts, with the disparity between men and women increasing from 8% in 2020 to 9% in 2023. This indicates a need for targeted interventions to support female financial inclusion.

The future of savings in Nigeria will be defined by bridging this gap through digital innovation. The following table summarises key statistics:

 

Metric	Figure	Source
Financial inclusion rate	64%	EFInA A2F 2023
Gender disparity in inclusion	9%	EFInA A2F 2023
Mobile money transactions (2024)	₦71.5 trillion	fintechmagazine.africa
Operational IPS in Africa	31 across 26 countries	SIIPS 2024

 

 

AI-Powered Financial Services

One critical area artificial intelligence is positioned to support savings digital services management is with making delivery to last mile customers more intuitive and efficient.

Digital platforms like Kuda, Carbon, AjoCard and Cowrywise have commenced utilising AI to analyse location, communication preferences, user saving habits to push out personalised messaging in line with real user journeys, automate savings cycles, and offer personalised financial guidance. AI-driven chatbots, AI voice IVRs (Interactive Voice Response System) and robo-advisors improve financial literacy, identify fraud, and evaluate credit risk, making banking more inclusive, particularly for those who have been traditionally underserved.

 

Embedded Finance: Savings Within Everyday Transactions

A standout insight from a recent jointly hosted workshop between EFInA and Gates Foundation was the critical role of partnerships in making financial inclusion scalable and sustainable. In today’s climate, collaboration is essential to reduce costs while amplifying impact, ensuring financial solutions remain viable for underserved communities.

And the idea of embedded finance through API calls and joint partnerships is gaining popularity, allowing users to save effortlessly through their everyday transactions. For example, health insurtech services are now incorporating micro-saving features that automatically set aside small amounts with each transaction. This “save-as-you-spend” that empowers through extended financial services is a verified approach, supported by Nigeria’s expanding mobile money ecosystem, to making targeted saving easier than ever.

 

The Rise of Decentralised Savings Models

Blockchain technology and decentralised finance (DeFi) are opening up new opportunities for savings and investment. DeFi platforms enable peer-to-peer savings and lending without traditional banking intermediaries. Smart contracts ensure transparency and efficiency, reducing operational costs and increasing returns for savers.

Decentralised finance (DeFi) ecosystem is built on blockchain that operates without traditional intermediaries like traditional financial institutions or payment processors. This is an emerging alternative technology stack, capable of providing micro-savings and investment opportunities. DeFi promotes transparency, lowers costs, and may offer higher returns. Heavy regulatory and compliance scrutiny, especially as it pertains to the    Central Bank of Nigeria’s (CBN) restrictions on cryptocurrency transactions in recent years, has created obstacles for broader acceptance across the country. Despite these challenges, decentralised models are still gaining significant momentum and are showing great potential, especially for individuals, in underserved segments of the population such as young adults, women in rural areas and the displaced within IDP camps, with limited banking access.

 

Overcoming Barriers to Digital Savings Adoption 

There are major advocates for adoption of digital savings platforms, however, challenges persist. A major issue is the perception of mistrust in formal financial systems, gaps in digital and financial literacy, inaccessibility to points-of-sales agents, all of which have greatly impeded adoption. The National Financial Inclusion Strategy (NFIS) for the country – Nigeria, seeks to address these issues by encouraging digital financial services through a cost-effective network of agents utilising the Shared Agent Network Expansion Facilities (SANEF) while enhancing consumer education. Furthermore, collaborations between fintech companies and traditional banks have also created hybrid solutions that combine the convenience of digital services with the security of regulatory compliance.

 

Addressing Challenges for a Digital-First Savings Economy

For the 74% of financially included Nigerian adults, to fully realise the vast potential of digital savings, it is essential to tackle key challenges such as customer fraud, cybersecurity threats, data privacy concerns, and changing regulatory landscapes. Strengthening consumer protection measures and improving digital infrastructure, especially in rural areas, will be vital for fostering long-term adoption.

The future of savings in Nigeria is undoubtedly digital. Innovations driven by AI, embedded finance, and decentralised savings models are reshaping how Nigerians save and manage their finances. However, achieving widespread adoption will require collaborative efforts from regulators, fintech pioneers, and traditional financial institutions. By overcoming existing barriers and implementing progressive policies, Nigeria can pave the way for a future where savings are more accessible, automated, and inclusive.

 

By Titilola Feyijimi

Chief Operating Officer at AjoCard

DFI Alumni

 

Established in 2015, Digital Frontiers Institute is a proud brand of Digital Frontiers. Learn more about the Instant and Inclusive Payment Systems (IIPS) programme: https://iipscertification.org/