The Central Bank of Nigeria (CBN) has directed banks and fintechs to implement automated systems to detect suspicious transactions to strengthen anti-money laundering (AML) and financial crime controls in country's rapidly growing digital payments sector.
In a circular released on March 10, the apex bank established baseline requirements for AML, fighting terrorist financing, and countering proliferation financing.
The framework applies to deposit banks, mobile money operators, international money transfer operators, payment service providers, and other CBN-supervised entities.
Banks have 18 months to comply, while fintech companies and other financial institutions have 24 months. All affected entities must submit implementation plans within three months.
The new requirements will replace manual monitoring with automated anti-money laundering systems that use artificial intelligence, machine learning, and advanced analytics to spot suspect trends, notify compliance teams, and improve real-time reporting.
Institutions will also be obliged to link these technologies with customer due diligence processes such as Know-Your-Customer and Know-Your-Business checks, sanctions screening, and political risk monitoring.
Nigeria has existing financial crime laws and supervisory organisations. Still, regulators warn that the rapid expansion of electronic payments, valued at hundreds of trillions of naira each year, has outpaced traditional monitoring mechanisms.
Weak financial restrictions have previously enabled crimes. Ramon Abbas, a social media star, was arrested in 2020 for allegedly laundering hundreds of millions of dollars through complicated financial networks.
High-profile corruption cases, including allegations against former oil minister Diezani Alison-Madueke, involved billions in illicit financial flows.
Analysts also highlight the importance of monitoring to track the funding of extremist groups such as Boko Haram and Islamic State West Africa Province.
The CBN said the framework aligns with Financial Action Task Force standards and warned that institutions failing to comply could face sanctions under the Banks and Other Financial Institutions Act.
Share
