Africa: Afreximbank Advocates for AI-Driven Compliance to Strengthen African Trade

The African Export-Import Bank (Afreximbank) is championing the integration of artificial intelligence (AI) into financial and regulatory processes to enhance compliance and bolster African trade. This initiative is aimed at streamlining operations, mitigating financial crime risks, and promoting intra-African trade.

At the Afreximbank Compliance Forum held recently in Dakar, Senegal, Idrissa Diop, Compliance Director at Afreximbank, underscored the transformative impact AI could have on compliance across the continent. He highlighted how AI’s capability to analyze vast data sets and identify irregularities could revolutionize regulatory adherence, resulting in faster and more accurate reporting within African financial institutions.

“Our objective is to improve the efficiency and effectiveness of regulatory compliance through AI technology. This will not only protect our financial systems but also create a more seamless trading environment across Africa,” Diop shared with the Business & Financial Times (B&FT).

By adopting AI, Afreximbank envisions a future where African businesses can navigate complex regulatory frameworks with ease, boosting trade volumes and economic integration across the continent. This push for AI is also critical in addressing challenges such as money laundering, which remains a major obstacle to trade in Africa.

Afreximbank’s emphasis on AI-driven compliance aligns with its broader mission to advance intra-African trade and economic growth by modernizing regulatory standards.

AI Adaptation to African Markets

During the forum, themed ‘Better Compliance, Better Trade,’ Diop stressed the importance of adapting AI technologies to Africa’s unique business and regulatory environment. “We need to ‘tropicalize’ AI and tailor it to our environment, regulations, and business flows,” he said, cautioning against the direct importation of foreign-developed technologies without customization. “We don’t want to just purchase external technology and deploy it, only to find it yielding irrelevant results.”

This call for tailored AI solutions is timely as several African nations, including Nigeria and South Africa, continue to grapple with their inclusion on the Financial Action Task Force (FATF) grey list, which identifies countries with weaknesses in their anti-money laundering and counter-terrorism financing (AML/CFT) frameworks.

Diop elaborated on the grey list issue, explaining that many African economies were not initially structured to defend against financial crimes such as money laundering and tax evasion. These deficiencies have made them vulnerable and led to their inclusion on the grey list. He emphasized that the process of exiting the grey list is lengthy and complex, requiring cooperation between governments, parliaments, and financial institutions to update regulations.

Afreximbank’s Educational Role

Although Afreximbank cannot directly remove countries from the grey list, it plays an educational and facilitative role, creating platforms for knowledge exchange and promoting best practices in compliance. “We are organizing forums like this to raise awareness about the importance of strong regulation and best practices,” Diop added.

He also highlighted the critical role compliance will play in the smooth implementation of the African Continental Free Trade Area (AfCFTA), stating, “Improved compliance will certainly aid the swift implementation of AfCFTA.”

Formation of an African Compliance Association

In a significant announcement, Diop revealed plans for the establishment of an African Compliance Association, which aims to bridge the gap between regulatory requirements and business needs. This body will serve as a platform for compliance professionals across the continent to share knowledge and best practices. “We will package and disseminate knowledge across the continent, so that someone in Ghana can be informed about developments in Burundi, and vice versa,” Diop explained. He further noted that this association will help align the interests of regulators and businesses, providing a unified approach to compliance challenges.

The Afreximbank Compliance Forum

The Afreximbank Compliance Forum, held in collaboration with the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), attracted support from banks including Vista Bank, GCB Bank, Wave, Rawbank, SUNU Group, and compliance technology providers like LexisNexis, Elucidate, Finastra, Lloyd’s List Intelligence, Consortix, and Vneuron.

The forum addressed the FATF’s requirements for identifying Ultimate Beneficial Owners (UBOs) and the implications for trade facilitation. The FATF, an international body, sets standards to prevent financial crimes, with one of its key mandates being the identification of UBOs to ensure transparency and accountability in financial transactions.

The event also explored how AI could transform compliance processes, offering strategies for African countries to implement necessary reforms and exit the FATF grey list, while showcasing the latest innovations in compliance technology.

Through these efforts, Afreximbank is positioning itself as a key player in modernizing compliance and regulatory frameworks in Africa, aiming to foster a safer, more integrated trading environment across the continent.