The Central Bank of Nigeria (CBN) has unveiled a draft framework that sets a new benchmark for anti-money laundering (AML) practices across the financial sector, introducing AI-driven standards aimed at transforming how financial crimes are detected and prevented.
In a circular titled BSD/DIR/CON/AML/018/033, dated May 20, 2025, and addressed to all regulated financial institutions, the apex bank said the new standards were designed in response to the increasing digitalisation of Nigeria’s financial ecosystem and the mounting sophistication of financial transactions.
According to the circular, banks and other financial entities will be required to fully comply with the new rules within 12 months of the final adoption of the standards.
The framework outlines baseline requirements for automated AML systems that incorporate artificial intelligence (AI) and machine learning (ML), with the goal of boosting detection accuracy, improving operational efficiency, and ensuring compliance with both domestic regulations and international best practices, including guidelines from the Financial Action Task Force (FATF).
The CBN noted that the draft was informed by a detailed review of current AML tools deployed across the industry and draws on global benchmarks. It added that stakeholder input is now being solicited, with comments and recommendations due by June 13, 2025.
The standards will be binding on a wide range of financial institutions regulated by the CBN—including deposit money banks, microfinance banks, primary mortgage institutions, digital payment service providers, and any other entities covered under Nigeria’s AML/CFT/CPF framework.
A key pillar of the new policy is the requirement for institutions to implement advanced AML systems capable of real-time transaction monitoring and anomaly detection. These systems must utilise AI and ML for behavioural pattern analysis, risk scoring, and continuous learning—essential tools in identifying suspicious activities such as large cash deposits, crypto-related transactions, and cross-border fund transfers.
In addition, financial institutions are expected to integrate their AML platforms with both national and international watchlists used for sanctions screening and the identification of politically exposed persons (PEPs).
The systems must allow for real-time updates and include fuzzy-matching algorithms to detect variations in names or spelling errors that could otherwise result in oversight.
The CBN also mandates that the systems must support adverse media screening and allow institutions to maintain internal watchlists. These features should be capable of generating accurate, real-time alerts that prompt immediate case reviews or escalation.
Although still in draft form, the CBN has made clear its expectation that institutions begin preparing to align their systems with the new standards. Once finalised, the 12-month countdown to full compliance will begin.
The central bank has also confirmed that it will carry out follow-up reviews and industry-wide assessments to evaluate the degree of implementation across the financial sector.