In a bid to strengthen the integrity of Nigeria’s financial system, the Central Bank of Nigeria (CBN) has urged financial institutions to enhance their compliance frameworks and align with international banking standards to tackle illicit financial flows. This directive was issued during the Mandatory Compliance and Anti-Money Laundering (AML) Training Workshop held in Lagos on February 28, 2025, in partnership with Citi.
The workshop brought together compliance officers, trade operations specialists, and correspondent banking teams from various financial institutions to discuss global regulatory trends, financial risks, and best practices for ensuring compliance. The event highlighted the need for Nigerian banks to adopt dynamic, risk-based AML and Counter-Financing of Terrorism (CFT) programmes to meet evolving global standards.
CBN Reaffirms Commitment to Regulatory Oversight
In a statement released on Sunday, the CBN reiterated its commitment to reinforcing regulatory oversight and ensuring that Nigerian banks implement robust compliance measures. The apex bank emphasized the importance of adopting international best practices to maintain the stability and trustworthiness of the financial system.
Shola Phillips, Special Adviser to the CBN Governor on Compliance, stressed the need for financial institutions to operate with compliance frameworks that reflect global standards. She noted that correspondent banking relationships increasingly rely on stringent compliance measures, making it essential for Nigerian banks to improve their risk management structures.
“Regulators expect financial institutions to maintain dynamic, risk-based AML/CFT programmes that are responsive to the evolving financial environment. Proactive engagement with regulatory developments and the integration of innovative compliance solutions are essential for institutions to meet these expectations effectively,” Phillips stated.
She further warned that failure to align with global compliance standards could expose Nigerian banks to increased scrutiny from international financial institutions, potentially jeopardizing their access to global banking networks.
Global Experts Highlight Compliance Risks
During the workshop, global banking executives emphasized the importance of robust governance frameworks in mitigating financial risks. Siobhan Ni Ealaithe, Managing Director of Citi’s Correspondent Banking Group, underscored the critical role of compliance protocols such as Know Your Customer (KYC), Know Your Business (KYB), and Know Your Transaction (KYT) in preventing illicit financial flows and enhancing transparency.
Stephanie Bailey, Head of EMEA AML Risk Management for Foreign Correspondent Banking, highlighted the growing risks posed by financial crime, estimating that approximately $3 trillion in illicit funds flow through the global financial system annually. She urged Nigerian banks to strengthen due diligence processes, adopt technology-driven risk assessments, and maintain transparency in all financial dealings to align with global regulatory expectations.
CBN to Intensify Regulatory Measures
The CBN’s renewed focus on compliance aligns with Governor Olayemi Cardoso’s commitment to enforcing global best practices in Nigeria’s financial sector. The statement quoted Cardoso as saying that maintaining a strong financial system requires strict adherence to regulatory standards to sustain trust and stability.
To strengthen regulatory oversight, the CBN is enhancing compliance frameworks, adopting digital monitoring tools, and intensifying supervision of financial institutions to curb money laundering and other illicit financial activities. The apex bank aims to set high regulatory standards to protect Nigeria’s financial ecosystem and ensure its alignment with global best practices.
Nigerian Banks Face Stricter Compliance Expectations
With the global financial system placing greater emphasis on transparency and risk mitigation, Nigerian banks are expected to implement stricter compliance measures to maintain access to international financial markets and avoid potential regulatory sanctions. The CBN’s call to action underscores the importance of proactive compliance in safeguarding the integrity of Nigeria’s financial system and fostering trust in the global banking community.
As the financial landscape continues to evolve, Nigerian banks must prioritize innovation and adherence to international standards to remain competitive and secure in the global market.
