CBN Issues Draft Standards for Automated Anti-Money Laundering Technologies

In a strategic move to bolster real-time surveillance of suspicious financial activities, the Central Bank of Nigeria (CBN) has unveiled a draft framework titled “Baseline Standards for Automated Anti-Money Laundering (AML) Solutions“. This initiative aims to support financial institutions in adopting cutting-edge technology that improves the identification and reporting of suspicious transactions.

The draft was disclosed in a letter addressed to all financial institutions and signed by Dr. Olubukola Akinwunmi, Director of Banking Supervision at the CBN. The apex bank is currently seeking feedback and suggestions from industry stakeholders before finalizing the document.

According to the letter, the CBN remains firmly dedicated to safeguarding the resilience and trustworthiness of Nigeria’s banking infrastructure. In response to the rapid digitization and the growing presence of innovative financial tools, the bank developed this new set of standards to promote compliance and operational efficiency in tackling money laundering, terrorism financing, and the financing of proliferation (AML/CFT/CPF).

These standards were informed by an in-depth evaluation of existing anti-money laundering systems in the financial sector. The framework aligns with global standards, including recommendations from the Financial Action Task Force (FATF)—a leading international body dedicated to combating financial crimes.

Key objectives of the standards include:

• Enhancing the technology-driven capabilities of institutions to identify and report suspicious transactions effectively.
• Promoting the integration of modern technologies such as artificial intelligence (AI), machine learning (ML), and big data in AML processes.
• Reducing inefficiencies linked to manual anti-money laundering operations.
• Supporting regulatory compliance both locally and globally.

The draft, which has been circulated for industry input, proposes a system-wide adoption of AI-powered tools to monitor and analyze financial behaviors in real time. According to the CBN, these solutions are intended to establish consistency, reliability, and strict compliance throughout the Nigerian financial system.

In section 4.1 of the draft, the document outlines mandatory features for AML systems, including risk profiling, screening for politically exposed persons (PEPs), identification and verification protocols, transaction monitoring, and automated regulatory reporting.

Regarding the timeline for implementation, the CBN specified that all financial institutions are expected to align their AML solutions with the proposed standards within 12 months following official issuance. Additionally, the CBN will carry out periodic audits and industry assessments to ensure thorough compliance. Institutions must also offer ongoing training programs for their AML teams, with a focus on system operation and evolving risk factors.