AI-Enabled Fraudulent Schemes and Their Effects on Consumer Trust and Digital Financial Adoption in Nigeria

This study examines how AI-enabled fraudulent schemes affect consumer trust and digital financial adoption in Nigeria. With the rapidly growing field of digital finance, thanks to advances in fintech and recent regulatory changes, cybercriminals are taking advantage of a bigger opportunity to use generative AI tools to commit more elaborate fraud, such as voice cloning, deepfake impersonation, and AI-generated phishing. The data was gathered through an online survey involving 210 digital finance users in Nigeria with the help of a quantitative research design using SPSS. The results indicate that AI-enabled fraud is prevalent, as 87-91% of participants reported that they had experienced synthetic voice calls, fraudulent messages, or deepfake investment advertisements. Surprisingly, the regression analysis did reveal that the more they were exposed to AI fraud, the more they trusted it and adopted it, probably due to resilience or dependency of the experienced users. Nonetheless, qualitative data show that fraud has a major detrimental effect on trust levels of new or susceptible users, which may be a barrier to greater financial inclusion. Demographic analysis established that vulnerability is uneven within the groups. The AI-based fraud detection systems (61.9%), the public awareness campaign (58.6%), two-factor authentication, and tighter control were highly supported by the respondents as the essential measures to mitigate the threat. The analysis is based on the Technology Acceptance Model and Trust-Commitment Theory, which highlights the importance of the multi-stakeholder strategy that integrates high-level cybersecurity, consumer education, and active regulation to maintain the benefits of digital financial inclusiveness in Nigeria in the context of changing AI-driven threats.