On September 5, 2025, the Central Bank of Nigeria (CBN) unveiled its newly formed Compliance Department, a pivotal move to strengthen oversight and address emerging risks in the financial sector. The initiative, launched in the first quarter of 2025 and fully operational by the second quarter, aims to enhance regulatory efficiency and clarify supervisory roles.
Key Responsibilities of the Compliance Department
The Compliance Department is tasked with overseeing several critical areas:
Financial Crime Oversight: This includes monitoring Anti-Money Laundering (AML), Counter Financing of Terrorism (CFT), Counter-Proliferation Financing (CPF), and compliance with sanctions.
Market Conduct Regulation: The department will supervise disclosure practices, handle consumer complaints, and regulate advertising standards.
Enterprise Security Management: This covers cybersecurity, data protection, and risks associated with third-party engagements.
Corporate Governance and ESG: Focus areas include board performance and adherence to environmental, social, and governance (ESG) standards.
Directives for Financial Institutions
The CBN has instructed all regulated financial institutions to direct reports, inquiries, and correspondence related to these areas to the Compliance Department’s Director through designated communication channels. Further details on submission processes and points of contact will be provided by the department.
The CBN emphasized that this restructuring is a strategic effort to instill regulatory discipline and ensure robust management of non-prudential risks. The bank is committed to collaborating with financial institutions to facilitate a seamless transition and maintain high compliance standards.
Rising Concerns Over Financial Fraud
The establishment of the Compliance Department comes amid growing concerns about financial fraud in Nigeria. In July 2025, CBN Governor Olayemi Cardoso highlighted a 45% surge in fraud cases over the past year, with 70% of losses linked to digital channels, particularly unregulated virtual asset platforms. Speaking through Muhammad Sani Abdullahi, Deputy Governor for Economic Policy, at an Economic and Financial Crimes Commission (EFCC) event, Cardoso noted that while digital innovations have boosted financial inclusion, they have also introduced significant regulatory and security challenges.
Broader Regulatory Efforts
In a related development, the CBN recently mandated that all participants in Nigeria’s payment ecosystem adopt the ISO 20022 messaging standard and implement geo-tagging for payment terminals by October 31, 2025. This directive, aimed at Deposit Money Banks, Microfinance Banks, Mobile Money Operators, and other licensed entities, aligns with global payment messaging standards to enhance security and efficiency.
The creation of the Compliance Department underscores the CBN’s proactive approach to addressing evolving risks in Nigeria’s financial landscape, ensuring a safer and more resilient banking system
