The Central Bank of Nigeria (CBN) has released a draft framework aimed at transforming the country’s anti-money laundering (AML) regime through the adoption of automated, intelligent technologies, including artificial intelligence (AI) and machine learning (ML).
In a circular dated May 20, 2025 (Reference: BSD/DIR/CON/AML/018/033) and addressed to all regulated financial institutions, the apex bank stated that the proposed standards are designed to reflect the increasing digitalisation of Nigeria’s financial system and the growing complexity of financial crimes.
The draft outlines baseline requirements for the deployment of AI-driven AML systems that offer real-time monitoring, anomaly detection, and adaptive learning capabilities. These solutions are expected to enhance efficiency, improve detection accuracy, and ensure compliance with both Nigerian regulations and global standards set by the Financial Action Task Force (FATF).
Key Features of the Draft AML Framework:
- Scope: The framework applies to deposit money banks, microfinance banks, mortgage institutions, fintechs, digital payment service providers, and any other financial entities under the CBN’s AML/CFT/CPF oversight.
- Compliance Timeline: Stakeholders have until June 13, 2025, to submit comments. Once finalised, institutions will have 12 months to fully align with the standards.
- System Requirements: Institutions must deploy AI/ML-powered systems capable of:
- Real-time transaction monitoring
- Risk scoring and pattern recognition
- Continuous customer risk profiling
- Detection of high-risk activities, including large cash flows, cross-border transfers, and crypto transactions
- System Integration: AML platforms must interface with:
- Core banking systems
- Customer onboarding tools
- The Bank Verification Number (BVN) and National Identification Number (NIN) databases
- Watchlist Screening: Institutions are required to integrate with:
- Domestic and international sanctions lists
- Politically exposed persons (PEP) lists
- Systems supporting fuzzy matching to detect aliases and spelling variations
- Enhanced Due Diligence: The framework mandates:
- Real-time KYC/Know-Your-Business verification
- Continuous risk classification based on customer behavior
- Case Management: AML systems must feature:
- Enterprise-grade case management tools
- Role-based workflows and audit trails
- Automated reporting to the Nigerian Financial Intelligence Unit (NFIU)
Cybersecurity and Vendor Oversight:
The CBN places strong emphasis on data security, requiring:
- End-to-end encryption (data in transit and at rest)
- Multi-factor authentication
- Audit logging for user and system activity
For institutions using third-party vendors, the framework demands full compliance with CBN standards, including:
- Documented service level agreements
- Defined vendor responsibilities
- Ongoing oversight and validation
Regulatory Monitoring and Sanctions:
The CBN said it will conduct regular inspections and compliance validations, adding that institutions failing to meet the 12-month deadline will face regulatory sanctions.
Although still in the consultation phase, the draft framework signals a shift toward a tech-driven, proactive AML regime. The CBN has urged financial institutions to begin realigning their AML architecture in anticipation of the framework’s finalisation.
