CBN urges banks to align with global standards in tackling illicit funds 

The apex bank made this call at the Mandatory Compliance and Anti-Money Laundering (AML) Training Workshop held in Lagos on February 28, 2025, in collaboration with Citi.

The event brought together compliance officers, trade operations specialists, and correspondent banking teams from various financial institutions to discuss global regulatory trends, financial risks, and best practices for ensuring compliance. 

In a statement issued on Sunday, the CBN reaffirmed its commitment to reinforcing regulatory oversight and ensuring that Nigerian banks adopt dynamic, risk-based Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) programmes that align with evolving global standards. 

CBN urges banks to enhance risk-based compliance 

Speaking at the event, Shola Phillips, Special Adviser to the CBN Governor on Compliance, stressed that financial institutions must operate with compliance frameworks that reflect international best practices.

She noted that correspondent banking relationships are becoming increasingly dependent on stringent compliance measures, making it imperative for Nigerian banks to improve their risk management structures. 

“Regulators expect financial institutions to maintain dynamic, risk-based AML/CFT programmes that are responsive to the evolving financial environment. Proactive engagement with regulatory developments and the integration of innovative compliance solutions are essential for institutions to meet these expectations effectively,” she said in the statement. 

She further highlighted that failing to align with global compliance standards could expose Nigerian banks to increased scrutiny from international financial institutions, potentially affecting their access to global banking networks. 

Global banking executives highlight compliance risks 

At the workshop, Siobhan Ni Ealaithe, Managing Director of Citi’s Correspondent Banking Group, underscored the importance of robust governance frameworks in mitigating financial risks.

She pointed out that compliance protocols such as Know Your Customer (KYC), Know Your Business (KYB), and Know Your Transaction (KYT) are key in preventing illicit financial flows and enhancing transparency in financial transactions. 

Similarly, Stephanie Bailey, Head of EMEA AML Risk Management for Foreign Correspondent Banking, warned of the increasing risks posed by financial crime, noting that an estimated $3 trillion in illicit funds flows through the global financial system annually.

She urged Nigerian banks to strengthen due diligence processes, embrace technology-driven risk assessments, and maintain transparency in all financial dealings to remain in line with global regulatory expectations. 

CBN to Intensify Regulatory Oversight 

According to the statement, the CBN’s renewed focus on compliance aligns with Governor Olayemi Cardoso’s commitment to enforcing global best practices in Nigeria’s financial sector.

According to the statement, the CBN’s renewed focus on compliance aligns with Governor Olayemi Cardoso’s commitment to enforcing global best practices in Nigeria’s financial sector.

The statement quoted him as saying that maintaining a strong financial system requires strict adherence to regulatory standards to sustain trust and stability. 

The statement noted that the CBN will continue to set high regulatory standards to protect Nigeria’s financial ecosystem and ensure its alignment with global best practices. 

As part of efforts to strengthen regulatory oversight, the CBN is enhancing compliance frameworks, adopting digital monitoring tools, and intensifying supervision of financial institutions to curb money laundering and other illicit financial activities. 

With the global financial system placing greater emphasis on transparency and risk mitigation, Nigerian banks are expected to implement stricter compliance measures to maintain access to international financial markets and avoid potential regulatory sanctions.