Integrating Artificial Intelligence and Blockchain for Real-Time Fraud Detection: Evidence from Financial Sector in Nigeria (Published)
This study determines how integrating artificial Intelligence affects blockchain for real-time fraud detection in financial Sector in Nigeria. Survey research design was adopted by the study. The study employed a well-structured questionnaire to the targeted sample size of 240 respondents: 10 per institution across 15 deposit money banks (150 respondents), 6 per institution across 10 fintech companies (60 respondents), and 6 per institution across 5 other supervised entities (30 respondents). However, only 210 respondents were received which represents the study’s sample size. Descriptive statistics, correlation and multiple regressions were used to analyze the data collected. The Cronbach’s alpha test was also conducted to test the reliability and validity of the data collected. The findings from the multiple regression results revealed that indicate that the capability of AI, adoption of blockchain, IT infrastructure and regulatory environment are each statistically significant and independent drivers of the variance of fraud detection effectiveness in the Nigerian financial sector. Furthermore, the interaction between artificial intelligence and blockchain was not statistically significant (p = .259) notably, while the impact of IT infrastructure is significant (β = .252). The study concluded that each of the three factors of Artificial Intelligence capability, Blockchain adoption and IT infrastructure quality, and the regulatory environment significantly and independently improves the effectiveness of fraud detection in Nigeria’s financial sector. The non-significant of artificial intelligence and blockchain interaction, however, suggests that, as yet, the two technologies are complementary and not mutually reinforcing each other. The study recommended among others that financial institutions should continue to invest in both AI-based analytics and blockchain infrastructure, as each independently and significantly improves fraud detection effectiveness, rather than deferring one in favour of the other.
Keywords: Artificial Intelligence, Blockchain adoption, Fincncial sector, IT infrastructure and Regulatory environment.