The Central Bank of Nigeria (CBN) has unveiled a draft document titled �Baseline Standards for Automated Anti-Money Laundering (AML) Solutions,� signaling a significant push for financial institutions to adopt advanced technologies in their fight against illicit financial flows. This initiative aims to bolster the detection and real-time reporting of suspicious transactions across the Nigerian financial system.
The details were conveyed in a letter from the Director of Banking Supervision, Dr. Olubukola Akinwunmi, addressed to all financial institutions. The letter invites feedback on the draft before its final release, emphasizing that the proposed standard is based on a thorough evaluation of existing industry solutions and aligns with global best practices and international regulatory frameworks, including recommendations from the Financial Action Task Force (FATF).
“CBN is committed to ensuring the integrity and stability of the Nigerian banking system. In recognition of the high level of digitalisation 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 letter stated. “The standard is aimed at promoting operational efficiency and regulatory compliance to AML/CFT/CPF requirements by financial institutions in Nigeria.”
The apex bank outlined several key objectives for these new standards:
Strengthening the AML/CFT/CPF capabilities of financial institutions through technology-driven approaches.
Encouraging the adoption of emerging technologies to enhance the detection and reporting of suspicious transactions in real time.
Reducing operational inefficiencies associated with manual AML processes.
Supporting compliance with evolving domestic and international regulatory expectations.
The CBN has opened the draft Baseline Standards for Automated AML Solutions for comments and suggestions from all stakeholders, aiming to enrich the final version.
In the exposure draft, the central bank highlighted that these advanced AML solutions will leverage cutting-edge technologies such as Artificial Intelligence (AI), Machine Learning (ML), and big data analytics to identify, prevent, and report suspicious activities in real-time. This move is designed to foster uniformity, efficiency, and enhanced compliance among financial institutions across Nigeria.
Specifically, Section 4.1 of the draft mandates that AML solutions shall include functionalities for risk profiling (including Politically Exposed Persons and other high-risk individuals), risk assessment, identification and verification, sanction screening, transaction monitoring, and regulatory reporting.
Regarding implementation, the CBN stated, “Financial institutions shall align their AML solutions with these baseline standards within 12 months of the issuance of these standards. 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.”
