In a landmark move to modernise Nigeria’s financial surveillance system, the Central Bank of Nigeria (CBN) has issued a draft framework mandating the deployment of intelligent, automated anti-money laundering automated anti-money laundering (AML) systems across all regulated financial institutions. The draft, released on May 20, 2025, signals the CBN’s strategic shift toward leveraging artificial intelligence (AI) and machine learning (ML) technologies to combat increasingly sophisticated financial crimes.
The directive, referenced BSD/DIR/CON/AML/018/033, comes in response to the rapid digitalisation of Nigeria’s financial ecosystem and the need to match global best practices in financial integrity. In the circular, the apex bank emphasized the importance of advanced digital tools in enhancing detection accuracy, efficiency, and regulatory compliance.
“Financial institutions shall align their AML solutions with these baseline standards within 12 months of the issuance of these standards,” the CBN declared. Stakeholders have until June 13, 2025, to submit feedback before the framework is finalised. The countdown to compliance will begin immediately after the final version is released.
The proposed standards apply to deposit money banks, microfinance banks, mortgage institutions, fintech platforms, and other financial entities under CBN’s AML/CFT/CPF regulatory oversight. These institutions are expected to deploy intelligent systems with capabilities such as:
Real-time monitoring of transactions
AI-powered behavioural pattern recognition
Risk scoring and adaptive learning
Integration with customer onboarding and core banking systems
The framework places a strong emphasis on customer due diligence (CDD), know-your-customer (KYC), and know-your-customer’s-business (KYCB) protocols. Financial institutions must integrate their systems with the Bank Verification Number (BVN) and National Identification Number (NIN) databases, ensuring seamless and secure onboarding.
Beyond onboarding, institutions must implement continuous monitoring mechanisms for dynamic customer risk profiling. High-risk accounts will require enhanced due diligence, in line with international standards.
A major highlight of the standards is the requirement for intelligent screening systems. Institutions must link their AML systems to international and local watchlists, including those for politically exposed persons (PEPs) and sanctions.
Fuzzy matching algorithms will be required to detect name variations and flag potential threats often missed by conventional systems. Other essential features include:
Adverse media screening
Automated case assignment and escalation
Full audit trails for regulatory oversight
Integrated dashboards for compliance teams
AML systems must also support automated reporting to the Nigerian Financial Intelligence Unit (NFIU), covering Suspicious Transaction Reports (STRs), Currency Transaction Reports (CTRs), and Foreign Currency Transaction Reports (FCTRs).
To ensure data integrity and operational security, the framework mandates robust cybersecurity protocols. These include:
Data encryption at rest and in transit
Multi-factor authentication
Role-based access controls
Detailed audit logging of system activities
In cases where third-party vendors supply AML systems, institutions must document vendor responsibilities and ensure full compliance with CBN standards through comprehensive service-level agreements.
The CBN has warned that non-compliant institutions will face regulatory sanctions after the 12-month implementation period. The apex bank will conduct regular audits and validations to assess institutional readiness and adherence.
This move is part of Nigeria’s broader financial reform agenda and is aligned with recommendations from the Financial Action Task Force (FATF). The CBN’s decision follows a global trend where financial institutions are being compelled to adopt AI technologies for regulatory compliance, fraud detection, and transaction transparency.
Industry experts have welcomed the framework as a progressive step that will enhance the integrity of Nigeria’s financial system. However, they also caution that the transition may pose cost and technical challenges for smaller financial institutions, especially microfinance banks and digital startups.
Nonetheless, the CBN’s initiative is seen as a crucial intervention in strengthening Nigeria’s defence against financial crimes such as money laundering, terrorist financing, and cyber fraud.
As the June 13 deadline for stakeholder feedback draws near, financial institutions are expected to begin reassessing their AML infrastructure in preparation for the sweeping changes ahead.