CBN Calls on Banks to Strengthen Compliance With Global Anti-Illicit Fund Standards

The Central Bank of Nigeria (CBN) has urged financial institutions to tighten their compliance frameworks and conform with global banking norms to combat illicit money flows and ensure the financial system’s integrity.

The apex bank made this request during the Mandatory Compliance and Anti-Money Laundering (AML) Training Workshop, which was organized in partnership with Citi and took place in Lagos on February 28, 2025.

Compliance officers, trade operations experts, and correspondent banking teams from different financial institutions convened to discuss financial risks, global regulatory developments, and compliance best practices at the event. 

The CBN reiterated its commitment in a statement released on Sunday to strengthen regulatory oversight and ensure Nigerian banks have dynamic, risk-based AML and CFT programs that comply with changing international standards.

CBN advises banks to improve risk-based compliance

According to Shola Phillips, Special Adviser to the CBN Governor on Compliance, who spoke at the event, financial institutions must use compliance frameworks that mirror global best practices.

She pointed out that Nigerian banks must enhance their risk management systems since correspondent banking relationships are becoming increasingly reliant on strict compliance standards. 

Regulators anticipate that financial institutions will continue to run risk-based, dynamic AML/CFT programs that adapt to the changing financial landscape. For institutions to successfully satisfy these expectations, proactive engagement with regulatory developments and incorporating creative compliance solutions are crucial,” she stated in the release.

She also emphasized that Nigerian banks may be subject to heightened scrutiny from foreign financial institutions if they do not comply with global compliance requirements, which might impact their ability to access international banking networks.

Global banking CEOs emphasize compliance risks

Siobhan Ni Ealaithe, Managing Director of Citi’s Correspondent Banking Group, emphasized the value of strong governance frameworks in reducing financial risks throughout the session.

She emphasised that compliance procedures like Know Your Customer (KYC), Know Your Business (KYB), and Know Your Transaction (KYT) are essential to stop illegal money flows and improve transparency in financial transactions.

With an estimated $3 trillion in illicit funds flowing through the global banking system each year, Stephanie Bailey, Head of EMEA AML Risk Management for Foreign Correspondent Banking, also warned about the growing threats posed by financial crime.

To comply with international regulatory standards, she advised Nigerian banks to improve their due diligence procedures, adopt technology-driven risk assessments, and uphold openness in all financial transactions. 

CBN to Step Up Regulatory Monitoring

The statement claims that Governor Olayemi Cardoso’s resolve to implement international best practices in Nigeria’s financial industry is consistent with the CBN’s renewed emphasis on compliance.

According to the statement, he stated that a robust financial system necessitates rigorous adherence to regulatory norms to preserve stability and confidence.

According to the statement, the CBN will continue to enforce strict regulations to safeguard Nigeria’s financial system and guarantee that it complies with international best practices.

The CBN is strengthening regulatory oversight by strengthening compliance frameworks, implementing digital monitoring tools, and stepping up financial institution supervision to prevent money laundering and other illegal financial activity. 

Nigerian banks are anticipated to enforce more stringent compliance procedures to preserve access to global financial markets and evade possible regulatory penalties, given the increased emphasis on transparency and risk reduction in the global financial system.