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The Central Bank of Nigeria (CBN) has extended the timeline for financial institutions to comply with its newly issued baseline standards for automated anti-money laundering (AML) solutions.
Under the new directive, Deposit Money Banks have been given 18 months to achieve full compliance, while other financial institutions will have 24 months from March 10, 2026, to meet the requirements.
In a circular dated March 10, 2026, the CBN stated that implementation of the guidelines takes effect immediately, with the compliance timelines set according to the category of institution.
“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) from the date of issuance,” the circular noted.
The circular, titled Issuance of Baseline Standards for Automated Anti-Money Laundering Solution for Financial Institutions in Nigeria, was signed by Akinwunmi Olubukola, Director of the Banking Supervision Department at the CBN, and Olubunmi Ayodele-Oni for the Director of the Compliance Department. It was addressed to banks, mobile money operators, international money transfer operators, payment service providers, and other regulated financial institutions.
The revised timeline extends an earlier proposal that initially set the compliance deadline at 12 months.
As part of the transition process, the regulator directed all affected institutions to submit detailed implementation roadmaps to its Compliance Department within three months of the circular’s issuance.
According to the CBN, the standards are designed to strengthen the integrity and stability of Nigeria’s financial system by enhancing the detection and reporting of suspicious transactions.
“The Baseline Standards provide a framework for implementing automated solutions that strengthen the detection and reporting of suspicious transactions in real time and enhance compliance with applicable AML/CFT/CPF laws and regulations,” the bank stated.
The framework also encourages the use of emerging technologies to improve financial crime risk management across the sector.
All financial institutions under the CBN’s supervision are required to deploy automated AML systems, although the level of sophistication is expected to reflect each institution’s size, business model, risk profile, transaction volumes, and operational complexity.
The standards are anchored on the Central Bank of Nigeria Act 2007 and the Banks and Other Financial Institutions Act 2020, and are intended to complement existing regulatory obligations rather than replace them.
The CBN noted that manual compliance controls are increasingly inadequate as financial services become more digital and complex. Institutions are therefore expected to implement systems that enable risk-based customer due diligence, real-time monitoring of suspicious activities, and timely reporting to regulatory authorities including the Nigerian Financial Intelligence Unit.
The guidelines align with recommendations from the Financial Action Task Force and cover key compliance areas such as transaction monitoring, customer due diligence, know-your-customer (KYC) and know-your-business (KYB) processes, sanctions and politically exposed persons screening, reporting mechanisms, and case management.
Additional requirements include robust audit trails, secure authentication systems, data protection protocols, vendor management standards, and system scalability to support evolving compliance needs.
Financial institutions are also encouraged to integrate advanced technologies such as artificial intelligence, machine learning, and data analytics into their AML frameworks. These systems must undergo independent annual validation, including accuracy assessments, fairness reviews, and bias testing.
The CBN further mandated the adoption of tamper-proof audit trails, role-based workflow controls, and compliance with the Nigeria Data Protection Act to safeguard sensitive customer information.
Third-party technology providers must also be governed by strict vendor management policies covering procurement, implementation, operational support, incident response, and exit strategies.
Institutions applying for new licences will be required to demonstrate compliance with the standards or present credible implementation plans as part of the authorisation process.
The CBN said compliance will be monitored through off-site surveillance, on-site examinations, thematic reviews, and other supervisory mechanisms.
Failure to meet the requirements could result in regulatory action, including remedial directives, administrative sanctions, and financial penalties imposed under existing laws.
“All stakeholders are required to ensure strict compliance with the guidelines and all other regulations,” the apex bank stated, adding that it will continue to monitor developments and provide further guidance where necessary.
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