On May 20, 2025, the Central Bank of Nigeria (CBN) published the Exposure Draft of the Baseline Standards for Automated Anti-Money Laundering (AML) Solutions (the "Exposure Draft" / "Proposed Baseline Standards"). The Exposure Draft was developed in recognition of the rapid pace of technological advancement in the financial sector and the increasing use of innovative products. The Proposed Baseline Standards aim to promote greater efficiency, ensure consistency, and support compliance with Anti-Money Laundering, Combating the Financing of Terrorism, and Counter-Proliferation Financing (AML/CFT/CPF) obligations under applicable law through the use of automated systems.
Scope of Application
The Proposed Baseline Standards are intended to apply to all financial institutions operating in Nigeria including Deposit Money Banks, Microfinance Banks, Primary Mortgage Banks, Digital Payment Service Providers and other financial institutions subject to AML/CFT/CPF regulations.
Key Highlights of the Exposure Draft
The Exposure Draft outlines several baseline requirements that automated AML solutions must meet. Notable highlights include:
- Compliance with applicable Nigerian data protection laws.
- In-built data security features to safeguard sensitive customer and transaction data.
- Integration of an Enterprise Case Management System for the automated creation, assignment, and management of cases.
- Automated tools for regulatory compliance reporting.
- Automated detection, escalation, and reporting of suspicious transactions to the Nigerian Financial Intelligence Unit (NFIU).
- Automated risk assessment at customer onboarding and continuous monitoring of customer risk levels.
- Automated execution of Customer Due Diligence and Enhanced Due Diligence, with ongoing risk reviews.
- Real-time alerts for high-risk activities, including cross-border transactions, excessive cash deposits, and crypto-related transactions.
- Integration with both domestic and international watchlists for sanctions screening.
- Inclusion of a database of Politically Exposed Persons (PEPs), with automated flagging of PEPs and other high-risk individuals.
- Real-time data exchange between all systems involved in the AML/CFT lifecycle.
- Scalability of AML solutions to accommodate growing transaction volumes.
- Seamless integration with other core financial systems, such as core banking platforms.
- Multi-language and multi-currency support to ensure usability across regions and subsidiaries.
- Minimal vendor dependency.
Proposed Implementation
The Exposure Draft proposes a 12-month implementation period within which all financial institutions are expected to align their AML solutions with the prescribed Baseline Standards.
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