Nigerians are demanding quicker and easier ways to handle their money without having to move between apps or cope with complicated interfaces as mobile banking use soars throughout the country. A new AI helper called Xara, which is built on WhatsApp, promises to change that.
Launched in June by Nigerian software engineer Sulaiman Adewale, Xara is a multimodal artificial intelligence banking bot that makes it as easy as texting a buddy to move money, pay bills, and analyze expenditure. 95% of Nigeria’s 31.6 million social media users use WhatsApp, which is where the bot is fully integrated.
“If you look at it properly, you will see that WhatsApp is what even the oldest people among us use,” Adewale told TechCabal, adding that he wanted a simpler method that helps everyone with banking.
The product takes a unique strategy when it enters Nigeria’s congested fintech market by removing obstacles and expanding upon what customers already use. The company’s closest rival is Owo, an AI run by Mono that was created to make payments on WhatsApp easier.
Adewale claims that the large language model (LLM) that powers Xara is the same one that powers generative AI programs like ChatGPT. Additionally, open-source data customized for its particular use case is used to train it on sounds and visuals, particularly accented Nigerian speech patterns.
The AI processes the transaction in real time, comprehends natural language commands, and appropriately interprets them to verify details. A user may converse with the AI, “Send ₦10,000 to Abubakar for breakfast,” and it would handle it.
“We are working on it to make it even understand our local languages like Hausa and Yoruba, but we have only focused on pidgin and English,” Adewale stated.
Users add the AI’s WhatsApp number to make it a personal financial assistant. After onboarding, the AI is connected to a payment source, in this case 9 Payment Service Bank (9PSB), which generates user account numbers. According to Adewale, the group is trying to collaborate with banks so that customers can select the bank of their choice.
After two weeks of testing, TechCabal revealed that the AI bot could analyse user spending, plan payments, and comprehend and conduct transactions involving text, voice notes, and photos. It has the ability to save receivers as beneficiaries and retains user conversions.
In the two weeks since its introduction, the platform attracted about 10,000 members and recorded about ₦135 million ($88,200) in transactions, according to Adewale. He continued by saying that his team has collaborated with a few payment processors and is now pursuing collaborations with banks because its first partner was unable to manage the influx of users, which led to the suspension of new registrations.
According to Stella Adeboye, a waiter at the Kilimanjaro restaurant in Ilorin, Xara might be a convenient payment option for patrons who had to repeatedly look up at the wall to verify their account information in order to make transfers for bill payment.
Adeboye believes it would benefit everyone and make payments much easier for customers if this tool could take a picture of an account number and process the transfer instantly.
The security of their financial and personal information has been a big concern for its early users. According to one user, Babatunde Hassan, “it’s convenient to be able to bank via WhatsApp without opening another app, since it works even on a low network connection.” Babatunde is concerned about the security of everyone’s data, and he is sure that uncertainty may also hinder others.”
Regarding how users’ data is protected, Adewale stated that the AI is designed to make use of WhatsApp’s current end-to-end encryption. This implies that discussions are confidential and not available to outside parties. Additionally, he pointed out that in order to authorize transactions and prevent fraud or account compromise, a 4-digit authentication PIN is optional.
“The only information we log is related to payment transactions, just for tracking and resolution purposes, if any issues arise,” he stated. “We don’t retain those personal banking details ourselves.” “We recommend that users secure their WhatsApp accounts with a password or Face ID, or even use the AI to secure their chats and keep transactions private, for added security.”
Users can visit WhatsApp’s customer service to “request that your account be blocked instantly” in the event of a lost phone or compromised WhatsApp account, Adewale noted. Once identity is presented, accounts can be restored.
In response to a question concerning the kind of licensing that oversees their multimodal AI service, Adewale said that they presently “rely on banking partners’ license” for regulatory cover, citing their financial institution partners’ existing compliance frameworks.
A revolutionary approach to financial inclusion even though the country’s financial exclusion rate decreased from 46.3% in 2010 to about 26% in 2023, the Central Bank of Nigeria (CBN) reports that more than 28 million Nigerians do not have access to financial products and services, including money transfer services.
Using WhatsApp for banking services, according to financial analyst Victor Daniel, might promote even more financial inclusion because the app functions on low-end cellphones even with spotty network connections.
In order to attain more financial inclusion, he stated, “we need more innovations like this that can give us more alternatives to traditional systems.” Fintech developments have contributed to a reduction in financial exclusion in the nation in recent years.
Daniel went on to say that programs like Xara might potentially provide a compelling substitute for QR code payments, which have not been widely used in Nigeria because of issues with fraud and technological know-how. “A simpler payment service is provided by enabling users to start a transfer using natural language by simply snapping an account number from a note or screen.”
Although Nigeria is presently the major emphasis, Adewale stated that he hopes to see Xara AI banking assistant expand to other African nations where banking is still a challenge and WhatsApp is widely used. Additionally, he wagers that the tool will “replace a lot of fintechs, hopefully” and upend the fintech industry.
“As we continue to integrate more services, such as utility payments, savings plans, and even e-commerce and logistics, it will still order food for you if you ask it to do so.”
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