In a bold move to enhance the resilience and transparency of Nigeria’s financial system, the Central Bank of Nigeria (CBN) has released a draft Baseline Standard for Automated Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Solutions.
The initiative is geared towards leveraging technology to deepen real-time surveillance and compliance across financial institutions.
The apex bank is calling for stakeholders’ feedback on the proposed standards, which are aimed at aligning Nigeria’s financial integrity framework with global best practices.
Director of Banking Supervision, Dr. Olubukola Akinwunmi, in explaining the rationale for the draft posted on its website in Wednesday, noted that the high level of digitalisation in Nigeria’s financial landscape now necessitated a robust and automated compliance framework.
He added that the draft standard was expected to promote operational efficiency and strengthen adherence to AML/CFT regulations by regulated institutions.
It added: “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 Anti-Money Laundering (AML) Solutions.
“The Standard is aimed at promoting operational efficiency and regulatory compliance to AML/CFT/CPF requirements by financial institutions in Nigeria.
“This standard is informed by a comprehensive assessment of existing solutions within the industry. It aligns with global best practices and international regulatory frameworks, including the recommendations of the Financial Action Task Force (FATF).”
According to the draft, automated AML systems are expected to feature real-time monitoring, politically exposed person (PEP) identification, sanction screening, risk profiling, transaction analysis, and compliance reporting. The systems must also support case management and trend analysis through a centralised dashboard interface.
One of the key innovations is the inclusion of AI-powered fuzzy matching algorithms to identify name variations and detect potential matches across domestic and global watch lists. The draft also mandates that institutions periodically conduct stress testing and set clear thresholds for false positives to improve system accuracy and reduce compliance friction.
“The AML solution shall have AI/ML capabilities for anomaly detection, behavioural pattern recognition, automated risk scoring, and adaptive learning to recommend improvements based on insights from flagged alerts and resolution outcomes,” the document states.
In a further step to deter illicit flows, the CBN noted that the system must generate real-time alerts for high-risk activities including excessive cash deposits, cross-border transactions, and crypto-related activities. Institutions are expected to screen and act on such alerts within a defined timeline.
To support comprehensive customer due diligence, financial institutions will also be required to integrate AML solutions with national databases, such as the Bank Verification Number (BVN) and National Identity Number (NIN), ensuring real-time onboarding and verification.
Additionally, the AML tools must incorporate Know Your Customer (KYC) and Know Your Business (KYB) functionality, enabling automated risk profiling based on historical data, behavioral patterns, and typologies related to money laundering and terrorist financing.
The proposed standard comes at a time when regulators across the world are embracing digital surveillance frameworks to close regulatory gaps and improve oversight, especially with the rise in virtual assets and cross-border financial flows.
The CBN has encouraged financial institutions and stakeholders to review and provide comments on the draft framework, which is expected to be finalised following public consultations.
Nume Ekeghe
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