The Central Bank of Nigeria has introduced a draft framework to revolutionize anti-money laundering practices across the nation’s financial sector, targeting enhanced compliance amid rising digitalization and increasingly complex transactions.
Detailed in a circular (BSD/DIR/CON/AML/018/033) dated May 20, 2025, the initiative mandates financial institutions to adopt advanced artificial intelligence and machine learning technologies to combat financial crimes.
The CBN’s framework, distributed to all regulated entities including deposit money banks, microfinance banks, primary mortgage banks, and digital payment providers, sets new standards for automated AML systems.
Non-compliance after the 12-month implementation period could result in regulatory sanctions, with the CBN planning regular inspections to ensure adherence.
These standards aim to align with both local regulations and international benchmarks, such as those set by the Financial Action Task Force.
Financial institutions have until May 2026 to achieve full compliance following the framework’s final issuance.
The proposed standards emphasize real-time transaction monitoring, anomaly detection, and seamless integration with internal systems like core banking software and customer onboarding platforms.
AML solutions must incorporate AI and ML for behavioral pattern recognition, risk scoring, and adaptive learning to identify suspicious activities, including large cash transactions, cryptocurrency dealings, and cross-border transfers linked to money laundering or terrorist financing.
Key requirements include robust customer due diligence, know-your-customer, and know-your-customer-business processes, with real-time access to national identity systems like BVN and NIN for enhanced verification.
Systems must also support sanctions screening, politically exposed persons identification, and adverse media checks using fuzzy-matching algorithms to ensure accuracy.
The framework mandates enterprise case management systems to streamline the handling of flagged transactions, alongside automated reporting tools for Suspicious Transaction Reports, Currency Transaction Reports, and Foreign Currency Transaction Reports to the Nigerian Financial Intelligence Unit.
Data protection measures, including encryption, multi-factor authentication, and comprehensive audit logging, are also required to safeguard sensitive information.
The CBN is seeking stakeholder feedback on the draft by June 13, 2025, to refine the framework, which draws on an assessment of existing AML tools and global best practices.
“This framework underscores our commitment to a secure and efficient financial system,” the CBN stated, highlighting its proactive approach to addressing evolving financial crime risks in Nigeria’s rapidly digitizing economy
