CBN Sets New Standards for Anti-Money Laundering Compliance in Nigeria

The Central Bank of Nigeria (CBN) has introduced a draft Baseline Standards for Automated Anti-Money Laundering (AML) Solutions, aimed at strengthening financial institutions’ ability to detect and report suspicious transactions in real time.

The draft document, signed by Dr. Olubukola Akinwunmi, Director of Banking Supervision, was sent to all financial institutions, requesting feedback before final implementation. In the letter, the CBN stated: “CBN is committed to ensuring the integrity and stability of the Nigerian banking system. In recognition of the high level of digitalization within the financial system and rapid emergence of innovative products, the CBN has developed a draft document titled ‘Baseline Standards for Automated AML Solutions.’”

The new AML standards aim to strengthen financial institutions’ AML capabilities through technology-driven approaches. “The standard is aimed at promoting operational efficiency and regulatory compliance to AML/CFT/CPF requirements by financial institutions in Nigeria,” the CBN stated, adding that the standards align with global best practices and recommendations of the Financial Action Task Force (FATF).

The draft document specifies that AML solutions must include risk profiling for Politically Exposed Persons (PEPs) and other high-risk individuals, transaction monitoring, real-time detection of suspicious activities, sanction screening, regulatory reporting, as well as automated customer due diligence (CDD) and Know Your Customer (KYC) processes. “In section 4.1, the AML solutions shall include risk profiling, Politically Exposed Person (PEP) and other high-risk profiling, risk assessment identification and verification, sanction screening, transaction monitoring and regulatory reporting,” the CBN explained.

On implementation and compliance, the CBN stated that financial institutions must align their AML solutions with these baseline standards within 12 months of issuance. The regulator emphasized its commitment to monitoring compliance, stating: “CBN will conduct follow-up reviews and periodic industry assessments to ensure compliance. Institutions shall provide regular training to AML teams on system usage and emerging risks.”

The CBN has invited stakeholders to review the draft and submit feedback before the final version is released.