By Juliet Ezeh
The Central Bank of Nigeria (CBN) has directed banks and other financial institutions to deploy advanced automated systems capable of detecting suspicious transactions in real time, as part of a new framework aimed at strengthening the country’s fight against financial crimes.
Under the new baseline standards for Automated Anti-Money Laundering (AML) solutions issued on March 10, 2026, Deposit Money Banks have been given 18 months to fully comply with the requirements, while other financial institutions have up to 24 months to implement the framework.
The apex bank said the new standards were designed to enhance the detection and reporting of suspicious financial activities while improving the integrity and stability of Nigeria’s financial system.
In a circular signed by the Director of the Banking Supervision Department, Akinwunmi Olubukola, and Olubunmi Ayodele-Oni on behalf of the Director of the Compliance Department, the CBN stated that the new framework requires financial institutions to transition from manual monitoring processes to automated technology-driven systems.
According to the regulator, the increasing complexity and digitalisation of financial services mean traditional manual controls are no longer adequate for identifying illicit financial activities such as money laundering, terrorism financing and proliferation financing.
The CBN explained that the automated systems must support risk-based customer due diligence processes, including Know-Your-Customer and Know-Your-Business verification, sanctions screening and monitoring of politically exposed persons.
Financial institutions are also expected to implement advanced transaction monitoring systems capable of identifying unusual patterns and generating alerts for suspicious transactions that must be reported to the Nigerian Financial Intelligence Unit and other regulatory authorities.
The standards further encourage the use of emerging technologies such as artificial intelligence, machine learning and advanced data analytics to strengthen financial crime detection and risk management.
However, the CBN noted that institutions deploying such technologies must subject them to independent annual validation to ensure accuracy, fairness and the absence of bias.
To improve accountability and transparency, the regulator mandated tamper-proof audit trails, role-based workflow systems and secure authentication protocols for all AML platforms.
Financial institutions must also comply with the Nigeria Data Protection Act in managing sensitive customer information processed through the systems.
In addition, the guidelines require strict vendor management procedures covering procurement, implementation, maintenance and exit strategies for third-party technology providers.
The CBN said the new standards align with recommendations from the Financial Action Task Force and are anchored on the provisions of the CBN Act 2007 and the Banks and Other Financial Institutions Act 2020.
Financial institutions are required to submit detailed implementation roadmaps to the CBN’s Compliance Department within three months of the issuance of the circular.
The apex bank warned that institutions that fail to meet the requirements risk regulatory sanctions, administrative penalties and other enforcement actions under existing financial laws.
Compliance will be monitored through off-site surveillance, on-site examinations and thematic supervisory reviews conducted by the regulator.
The CBN added that the initiative forms part of broader efforts to strengthen Nigeria’s financial crime prevention framework and align the country’s banking system with global anti-money laundering standards.
Juliet Ezeh is the founder and chief reporter at Westbridge Reporters with over 7 years of experience in journalism. She covers crime, industry, policy, and social developments, delivering timely and accurate reporting.