The Central Bank of Nigeria (CBN) has issued new baseline standards requiring banks and other financial institutions to adopt automated anti-money laundering (AML) systems to strengthen the detection of suspicious transactions.
The directive, contained in a circular dated March 10, 2026, applies to deposit money banks, mobile money operators, international money transfer operators, payment service providers and other regulated institutions in Nigeria.
According to the regulator, the move is aimed at improving financial crime detection as the country’s financial services sector becomes increasingly digital.
The circular titled “Issuance of Baseline Standards for Automated Anti-Money Laundering (AML) Solution for Financial Institutions in Nigeria” was signed by Akinwunmi Olubukola, director of the banking supervision department, and Olubunmi Ayodele-Oni for the director of the compliance department.
18–24 months compliance window
The CBN said the implementation of the standards takes effect immediately.
However, deposit money banks have been given 18 months to achieve full compliance, while other financial institutions have 24 months to meet the requirements.
Financial institutions are also required to submit implementation roadmaps to the regulator within three months.
“The implementation of these guidelines shall start from the date of issuance, while full compliance shall be 18 months for Deposit Money Banks and 24 months for Other Financial Institutions,” the circular stated.
Shift from manual to automated monitoring
The apex bank said the directive reflects the increasing complexity of financial transactions and the limitations of traditional manual compliance systems.
As digital financial services expand, the regulator noted that manual AML monitoring processes are no longer sufficient to manage emerging risks linked to financial crimes.
Under the new standards, institutions are expected to deploy automated AML systems capable of supporting risk-based customer due diligence, identifying suspicious activities in real time and reporting them promptly to regulators and other authorities.
The framework aligns with global anti-money laundering recommendations issued by the Financial Action Task Force.
Key requirements for financial institutions
Under the new standards, financial institutions must deploy AML platforms that support several critical functions.
These include customer identification and verification, risk assessment and customer profiling, sanctions screening, politically exposed persons monitoring, transaction monitoring, regulatory reporting, and investigation case management.
The CBN said AML systems must also integrate with core banking platforms and other operational systems to allow effective monitoring across customers, products and transaction channels.
“For the avoidance of doubt, the CBN expects automated AML solutions to assess activity in the context of the full customer profile and not monitoring solely on raw transactional data,” the document stated.
Use of AI and machine learning
The central bank also encouraged financial institutions to adopt emerging technologies such as artificial intelligence, machine learning and predictive analytics to enhance financial crime detection.
However, the CBN stressed that such technologies must be properly governed and independently validated.
Financial institutions are required to carry out independent validation of AI and machine-learning models at least annually, including checks for accuracy, bias testing and performance drift.
Stronger KYC and identity verification
The guidelines also require institutions to strengthen know-your-customer (KYC) and due diligence processes through automated identity verification systems.
Banks are encouraged to integrate these systems with national identification infrastructure such as the bank verification number (BVN) and the national identification number (NIN) databases for real-time identity checks.
In addition, AML systems must screen customers and transactions against domestic and international sanctions lists, politically exposed persons registers and adverse media sources.
Where confirmed sanctions matches occur, the system should automatically block onboarding or transactions in line with regulatory requirements.
Enforcement and penalties
The CBN said compliance will be monitored through off-site surveillance, on-site examinations and thematic regulatory reviews.
Institutions that fail to meet the new baseline standards could face sanctions or regulatory penalties.
According to the apex bank, the new framework represents the minimum compliance threshold for financial institutions and may be strengthened depending on their risk profile and operational complexity.
The regulator said the policy is expected to improve Nigeria’s ability to prevent money laundering, terrorism financing and proliferation financing while strengthening the integrity of the financial system.
