The Central Bank of Nigeria (CBN) has introduced a draft titled ‘Baseline Standards for Automated Anti-Money Laundering’ (AML) solutions, aimed at promoting the adoption of emerging technologies by financial institutions.
These technologies are designed to enhance the detection and real-time reporting of suspicious transactions.
This information is detailed in a letter from the Director of Banking Supervision, Dr. Olubukola Akinwunmi, addressed to all financial institutions, inviting their feedback prior to the release of the final version.
The apex bank indicated that this standard is based on a thorough evaluation of the current solutions available in the industry.
Additionally, it emphasised that this initiative is in line with global best practices and international regulatory frameworks, including the recommendations set forth by the Financial Action Task Force (FATF).
The letter stated: “CBN is committed to ensuring the integrity and stability of the Nigerian banking system. 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 AML Solutions’.
“The standard is aimed at promoting operational efficiency and regulatory compliance to AML/CFT/CPF requirements by financial institutions in Nigeria.”
The letter further read: “The objectives of these standards include:Strengthening the AML/CFT/CPF capabilities of financial institutions through technology-driven approaches; Encouraging the adoption of emerging technologies to enhance the detection and reporting of suspicious transactions in real time; Reducing operational inefficiencies associated with manual AML processes; Supporting compliance with evolving domestic and international regulatory expectations.
“CBN hereby exposes the draft Baseline Standards for Automated AML Solutions to all stakeholders and invites comments and suggestions to enrich the final version.”
In the exposure draft, the central bank observed that the solutions utilise cutting-edge technologies including artificial intelligence (AI), machine learning (ML), and big data analytics to identify, avert, and report suspicious activities in real-time.
This initiative is designed to promote uniformity, efficiency, and compliance among financial institutions in Nigeria.
“In section 4.1, the AML solutions shall include risk profiling, Politically Exposed Person (PEP) and other high-risk profiling, risk assessment identification and verification, sanction screening, transaction monitoring and regulatory reporting.
“On implementation and compliance, CBN said: “Financial institutions shall align their AML solutions with these baseline standards within 12 months of the issuance of these standards. CBN will conduct follow-up reviews and periodic industry assessments to ensure compliance. Institutions shall provide regular training to AML teams on system usage and emerging risks,” the apex bank added.