By Abiola Olawale
The Central Bank of Nigeria (CBN) recently issued an extension for the implementation of its Automated Anti-Money Laundering (AML) system standards, providing breathing room for financial institutions.
Under the revised timeline, Deposit Money Banks (DMBs) now have an 18-month window to achieve full compliance, while Other Financial Institutions (OFIs) and fintechs have been granted 24 months.
The extension was from the previously reported 12 months, when the apex bank first proposed the guidelines.
The circular, titled Issuance of Baseline Standards for Automated Anti-Money Laundering Solution for Financial Institutions in Nigeria, was signed by CBN’s Director of Banking Supervision Department, Akinwunmi Olubukola, and Olubunmi Ayodele-Oni for the Director, Compliance Department. It was addressed to all banks, mobile money operators, international money transfer operators, other financial institutions, and payment service providers.
“The implementation of these guidelines shall start from the date of issuance, while full compliance shall be 18 months (for Deposit Money Banks) and 24 months (for Other Financial Institutions) from the date of issuance.”
Institutions were also directed to submit implementation roadmaps to their Compliance Department within three months from the date of issuance, tightening the transition timetable for the new compliance regime.
All banks and financial institutions under the CBN’s purview must operate automated AML solutions, although the sophistication of each system will depend on the institution’s size, risk profile, business model, transaction volumes, and complexity. The standards are anchored on the CBN Act, 2007, and the Banks and Other Financial Institutions Act, 2020, and are meant to complement, not replace, existing legal obligations.
The CBN stressed that manual controls are no longer sufficient as financial services become more digitised and complex. Institutions must deploy systems that support risk-based customer due diligence, enable timely detection of suspicious activities, and facilitate accurate and timely reporting to the CBN, the Nigerian Financial Intelligence Unit, and other authorities.
According to the regulator, the standards were issued to promote financial system stability and integrity, noting that the framework covers automated solutions for AML, combating the financing of terrorism, and countering proliferation financing in Nigeria.
“The Baseline Standards provide a framework for implementing automated solutions that strengthen the detection and reporting of suspicious transactions in real time and enhance compliance with applicable AML/CFT/CPF laws and regulations, while also supporting the use of emerging technologies to improve overall financial crime risk management,” the bank stated.
