- The Central Bank of Nigeria has urged banks to strengthen compliance frameworks to combat illicit financial flows
- The CBN stressed the need for Nigerian banks to align with global compliance standards
- Global bank executive highlighted compliance-based risks at international level
The Central Bank of Nigeria (CBN) has urged financial institutions to strengthen their compliance frameworks in line with global banking standards to combat illicit financial flows and maintain the integrity of the financial system.
The CBN stated this at the Mandatory Compliance and Anti-Money Laundering (AML) Training Workshop held in Lagos on February 28, in collaboration with Citi.
According to a statement on Sunday, March 2, the apex bank said the event brought together compliance officers, trade operations specialists, and correspondent banking teams from various financial institutions to discuss global regulatory trends, emerging financial risks, and best practices for ensuring compliance.
The CBN reaffirmed its commitment to reinforcing regulatory oversight and ensuring that Nigerian banks adopt dynamic, risk-based Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) programmes that align with evolving global standards.
CBN stresses need for aligning with global standards
At the event, the Special Adviser to the CBN Governor on Compliance, Shola Phillips, maintained that financial institutions must operate with compliance frameworks that reflect international practices.
She noted that financial institutions in Nigeria should commit to improving their risk management structures as correspondent banking relationships are becoming increasingly dependent on stringent compliance measures.
Philips added that non-alignment with global compliance standards could lead to increased scrutiny of Nigerian banks by international financial institutions, which could affect their access to global banking networks.
“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,” she said.
Compliance risks at global level
Managing Director of Citi’s Correspondent Banking Group, Siobhan Ni Ealaithe, stressed the importance of robust governance frameworks in mitigating financial risks.
She noted that compliance protocols such as Know Your Customer (KYC), Know Your Business (KYB), and Know Your Transaction (KYT) are important in preventing illicit financial flows and enhancing transparency in financial transactions.
At the event, Stephanie Bailey, Head of EMEA AML Risk Management for Foreign Correspondent Banking, highlighted the increasing risks posed by financial crime.
Bailey noted that an estimated $3 trillion in illicit funds flows 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 remain in line with global regulatory expectations.
CBN pledges to intensify regulatory oversight
The statement further noted that the CBN remains committed to maintaining a transparent and resilient financial system, pledging to intensify regulatory oversight.
It noted that the focus of the workshop aligns with Olayemi Cardoso’s vision to uphold regulatory excellence through strict adherence to regulatory standards to sustain trust and stability.
Some of the measures adopted by the CBN to strengthen regulatory oversight include enhancing compliance frameworks, adopting digital monitoring tools, and intensifying supervision of financial institutions to curb money laundering and other illicit financial activities.
“A strong financial system is built on trust, and trust is earned through integrity and compliance.
“The CBN will continue to set high regulatory standards to protect Nigeria’s financial ecosystem and ensure its alignment with global best practices,” the statement added.
CBN to fine banks N150 million for sale of minted naira notes to hawkers
Meanwhile, TheRadar earlier reported that the Central Bank of Nigeria (CBN) imposed a N150 million fine on the first instance per branch on deposit money banks (DMBs) involved in the illicit flow of mint banknotes to currency hawkers and economic agents that commodify naira banknotes.
The CBN noted that the selling of naira banknotes to currency hawkers by banks undermines efficient and effective cash distribution to banks’ customers.
