CBN rolls out baseline standards for Anti-Money Laundering solutions

 

The Central Bank of Nigeria, CBN, in a bid to encourage financial institutions’ adoption of emerging technologies that enhances detection and reporting of suspicious transactions in real time,  has rolled out a draft  ‘Baseline Standards for Automated Anti Money Laundering’, AML, solutions.

This is contained in its letter signed by the Director, Banking Supervision, Dr. Olubukola Akinwunmi, to all financial institutions requesting for comments before the final version.

The letter stated: “CBN is committed to ensuring the integrity and stability of the Nigerian banking system.  In recognition of the high level of digitalization 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.  

“This standard is informed by a comprehensive assessment of existing solutions within the industry.  

“It aligns with global best practices and international regulatory frameworks, including the recommendations of the Financial Action Task Force (FATF).

“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 apex bank noted that the solutions leverage advanced technologies such as artificial intelligence (AI), machine learning (ML), and big data analytics to detect, prevent, and report suspicious activities in real-time and is   issued to ensure uniformity, efficiency, and compliance across 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,” the apex bank added.

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.”