On 20 May 2025, the Central Bank of Nigeria (CBN) released the Exposure Draft on Baseline Standards for Automated Anti-Money Laundering, Combating the Financing of Terrorism, and Countering the Proliferation Financing (AML/CFT/CPF) Solutions (Exposure Draft).
The Exposure Draft sets out what automated AML solutions at Nigerian banks and other financial institutions must be able to do. Its goal is to bring compliance in line with global best practice and international frameworks, including the Recommendations of the Financial Action Task Force (FATF).
Why the CBN wants automated AML solutions
Nigeria arguably already has robust AML/CFT/CPF guidelines and regulations. However, many institutions still comply manually. In the CBN’s view, that undermines the fight against money laundering and terrorist financing.
The Exposure Draft therefore pushes a technology-driven approach. It encourages emerging technologies that detect and report suspicious transactions in real time. It also aims to cut the inefficiency of manual processes and keep pace with domestic and international expectations. (i)
If the CBN issues it as a final regulation, it should also make AML compliance more uniform across the sector. Below are the notable highlights, grouped by compliance area.
What automated AML solutions must deliver
1. User interface and customisation (ii)
Institutions must deploy intuitive, user-friendly solutions that support real-time reporting, trend analysis and case management. In addition, users should be able to customise rules with minimal vendor involvement. Multi-language and multi-currency features are also required.
2. System integration and scalability (iii)
Solutions should exchange and process data seamlessly, in real time, across every system in the AML/CFT/CPF lifecycle. They should support both real-time and batch processing.
Integration matters too. Solutions should connect through standard APIs, such as RESTful APIs, and work with legacy and third-party systems through configurable connectors. They must also scale with growing transaction volumes, transmit data securely and link to core banking and regulatory systems.
Two further points apply. With CBN approval, institutions may run AML solutions under a shared services arrangement. Where integration is not feasible, they should provide user-friendly interfaces and automated import and export tools.
3. Sanctions and PEP screening (iv)
Solutions must connect to domestic and global sanctions lists and watchlists. They should use AI-driven fuzzy matching to catch name variations and update sanctions lists in real time. Institutions should also be able to add internal watchlists. Finally, solutions should integrate databases of Politically Exposed Persons (PEPs), flag high-risk individuals automatically and monitor adverse media.
4. Transaction monitoring and risk-based analysis (v)
Monitoring systems must be robust. They should use artificial intelligence and machine learning for anomaly detection, behavioural analysis and adaptive learning, which reduces false positives.
Institutions must also run periodic stress tests and apply configurable, risk-based rules. Furthermore, they need real-time alerts for high-risk activity, including crypto-related and cross-border transactions, and must meet set decision timelines.
5. Customer due diligence, KYC and KYB (vi)
Solutions need real-time access to customer due diligence, Know Your Customer and Know Your Customer’s Business information. This supports dynamic risk profiling, smooth onboarding and ongoing monitoring.
They must also connect to national identity databases, such as BVN and NIN. In practice, that means continuous customer classification, synchronised data and both standard and enhanced due diligence according to risk.
6. Regulatory reporting (vii)
Solutions must detect and escalate suspicious transactions automatically. They must also file reports electronically with the Nigerian Financial Intelligence Unit within regulatory timeframes, including Suspicious Transaction Reports, Currency Transaction Reports and Foreign Currency Transaction Reports.
Reporting tools should give real-time insight and accurate data for both internal monitoring and external obligations.
What this means for financial institutions
The Exposure Draft underscores the CBN’s commitment to a stronger AML/CFT/CPF regime built on robust technology and international best practice. By setting standard baseline capabilities, it gives institutions a clear direction on innovation, efficiency and compliance.
Institutions should begin gap assessments against these standards now, rather than wait for the final guideline. The same push behind these standards helped Nigeria’s removal from the FATF grey list, and our note on the CBN directive on advertising compliance covers another area of tightening supervision.
ENDNOTE
- Exposure Of Draft Baseline Standards for Automated Anti-Money Laundering (Aml) Solutions, BSD/DIR/CON/AML/018/033 May 20, 2025
- Article 4 (4.2) of the Exposure Draft
- Article 4 (4.3) of the Exposure Draft
- Article 4 (4.4) of the Exposure Draft
- Article 4 (4.5) of the Exposure Draft
- Article 4 (4.6) of the Exposure Draft
- Article 4 (4.8) of the Exposure Draft