The Central Bank of Nigeria has issued new baseline standards for automated anti-money laundering (AML) solutions, directing banks and other financial institutions to deploy technology-driven systems capable of detecting suspicious transactions and strengthening financial crime compliance within 18 months.
The directive is contained in a circular dated March 10,
2026, titled “Issuance of Baseline Standards for Automated Anti-Money
Laundering (AML) Solution for Financial Institutions in Nigeria’.
The circular, signed by Akinwunmi Olubukola, director of the
banking supervision department, and Olubunmi Ayodele-Oni for the director of
the compliance department, applies to banks, mobile money operators,
international money transfer operators, payment service providers and other
regulated financial institutions.
According to the apex bank, the standards are designed to
strengthen the country’s financial crime detection framework as financial
services become increasingly digital.
“The Baseline Standards provide a framework for implementing
automated solutions that strengthen the detection and reporting of suspicious
transactions in real time and enhance compliance with applicable AML/CFT/CPF
laws and regulations,” the circular said.
The CBN added that the standards also support the adoption
of emerging technologies to improve financial crime risk management.
18-24 MONTHS COMPLIANCE TIMELINES
The regulator said implementation of the guidelines takes
effect immediately from the date of issuance.
However, deposit money banks have been given 18 months to
fully comply, while other financial institutions have 24 months to meet the
requirements.
The institutions are also required to submit implementation
roadmaps to the regulator.
“The implementation of these guidelines shall start from the
date of issuance, while full compliance shall be 18-months (for Deposit Money
Banks) and 24-months (for Other Financial Institutions) from the date of
issuance,” the CBN said.
“Therefore,
institutions shall submit implementation roadmaps to the Compliance Department
within three months from the date of issuance.”
SHIFT FROM MANUAL TO AUTOMATED AML MONITORING
The CBN said the move reflects the growing complexity of
financial transactions and the limitations of traditional manual compliance
processes.
“As financial services become increasingly digitised and
complex, manual AML/CFT/CPF controls are no longer sufficient to manage
evolving risks,” the apex bank said.
The CBN said financial institutions are expected to deploy
automated AML solutions that support risk-based customer due diligence, enable
timely detection of suspicious activity, and facilitate accurate and timely
reporting to regulators and other competent authorities.
The apex bank said the standards align with international
anti-money laundering frameworks, including the recommendations of the
Financial Action Task Force.
TRANSACTION MONITORING, PROFILING AS REQUIREMENT
Under the framework, the regulator said financial
institutions must implement automated AML platforms capable of supporting
customer identification and verification, risk assessment and customer
profiling, sanctions and politically exposed persons screening, transaction
monitoring, case management and investigation, regulatory reporting, and audit
and governance functions.
According to the CBN, the systems must also be integrated
with core banking platforms and other operational systems to ensure efficient
monitoring and risk analysis across products, channels and customers.
The regulator said AML solutions should assess transactions
within the context of full customer profiles.
“For the avoidance of doubt, the CBN expects automated AML
Solutions to assess activity in the context of the full customer profile and
not monitoring solely on raw transactional data,” the document stated.
Based on the standard, CBN said financial institutions are
allowed to deploy advanced technologies such as artificial intelligence (AI),
machine learning and predictive analytics to improve the detection of
suspicious patterns.
However, the CBN emphasised that such technologies must be
properly governed.
“Perform independent validation of all artificial
intelligence and machine-learning models at least annually and upon significant
change covering accuracy, performance drift, fairness audits, bias testing, and
humaneview where relevant and appropriate to the institution’s risk profile,”
the apex bank said.
KYC, SANCTIONS SCREENING AND IDENTITY VERIFICATION
Furthermore, the guidelines require financial institutions
to strengthen know-your-customer (KYC) and customer due diligence processes
through automated systems.
CBN added that banks are encouraged to integrate identity
verification processes with national infrastructure such as the bank
verification number (BVN) and national identification number (NIN) databases to
support real-time identity checks.
According to the apex bank, the AML platforms must also
screen customers and transactions against domestic and international sanctions
lists, politically exposed persons registers, internal watchlists and adverse
media sources.
The financial regulator said the AML systems should also be
capable of blocking onboarding or transactions where confirmed sanctions
matches occur, in line with legal and regulatory requirements.
In addition to anti-money laundering detection, the
framework encourages financial institutions to deploy automated fraud
monitoring capabilities across electronic channels, card payments, deposits and
lending platforms.
“The AML Solution shall monitor activities across relevant
channels (e.g. cards, e-channels, deposits, lending) in real time or near real
time to detect unusual patterns indicative of fraud,” the document added.
The standards require systems to support enterprise case
management tools that can automatically generate, assign and track
investigations arising from suspicious activity alerts.
ENFORCEMENT AND SUPERVISION
The apex bank said compliance with the standards will be
monitored through off-site surveillance, on-site examinations and thematic
reviews.
Institutions that fail to comply could face regulatory
action, according to the CBN.
“Institutions that fail to meet these Baseline Standards, or
that operate AML Solutions in a manner that results in ineffective AML/CFT/CPF
control, may be subject to remedial directives, administrative sanctions and
penalties in line with extant laws and regulations,” the financial regulator
said.
CBN added that the standards represent the minimum
compliance threshold and that institutions may be required to implement
stronger controls depending on their risk profile and operational complexity.
According to the regulator, the baseline standards represent
the minimum compliance threshold for financial institutions and may be
strengthened depending on the risk profile and operational complexity of
individual institutions.
The CBN said the initiative is expected to enhance Nigeria’s
capacity to prevent, detect and report money laundering, terrorism financing
and proliferation financing within the financial system, while reinforcing the
integrity and stability of the country’s financial sector.
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