Banks in Africa investing heavily in AI are moving beyond simple digitisation. Absa Bank Kenya disclosed a $31 million technology spend aimed at automating 71 % of its processes, and it now reports that 94 % of customer transactions occur through digital or alternative channels.
Mobile money surge fuels AI ambitions in Tanzania
In Tanzania, mobile‑money activity topped $79 billion, and real‑time payment volumes keep doubling each year, according to a recent industry analysis. The rapid growth is prompting banks to upgrade the back‑end systems that handle those flows.
Infrastructure upgrades target speed and insight
Banking firms are laying down hardware and software designed to accelerate payment processing while mining the data those payments generate. The goal is to use artificial intelligence for fraud detection, operational automation and tailored customer experiences.
At the same time, cyber‑attack activity is climbing across East Africa, prompting a parallel rise in security spending. Projections show the Tanzanian cybersecurity sector will earn $60.93 million in 2025, with a 9 % compound growth rate through 2030.
Related: Ghana Allocates $105 Million to Rehabilitate Irrigation Schemes
Preserving data confidentiality, integrity and availability has become a strategic priority for financial institutions. “For banks, this shift is as much about resilience as innovation,” the report notes, highlighting the need for low‑latency systems that can handle massive data streams.
To cut fraud, banks such as Absa are positioning servers nearer to key payment networks and digital channels, enabling near‑instant decision making. This proximity is expected to improve operational uptime and reduce loss from fraudulent activity.
While the promise of AI is clear, the path forward is not without friction. The blend of legacy core banking systems with modern analytics platforms often creates integration bottlenecks, and the regulatory environment adds another layer of complexity.
The Tanzania Communications Regulatory Authority reported a 30 % rise in attempted digital fraud during the first quarter, which shows the need for smarter monitoring tools. Meanwhile, local data‑hosting rules limit the use of global hyperscale cloud services, complicating the training of large AI models.
Related: Reckitt in court over formula claims
South Africa enjoys a mature cloud market with major providers, but many neighbouring economies lack high‑capacity data centres. This gap can lead to higher latency, increased costs and compliance headaches, especially when AI workloads demand reliable, high‑performance compute.
Open banking APIs are emerging as a bridge. NMB Bank in Tanzania and Kenya’s Co‑operative Bank have each rolled out dozens of APIs to let fintech partners connect securely. The Central Bank of Kenya’s Open Finance Initiative further encourages standardized, safe API sharing.
Innovation has often outpaced regulation, creating uncertainty around data sovereignty, algorithmic transparency and ethical AI use. Bank leaders must find ways to maintain trust and ensure long‑term viability in these areas.
Regulatory bodies such as the Bank of Tanzania set expectations for risk management, outsourcing and ICT governance, extending to emerging technologies like AI.
