Nigeria: CBN Governor Advocates Regional Cooperation Against Money Laundering

The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, has called for increased cooperation among monetary authorities in the West African sub-region to combat money laundering.

Speaking at the 10th meeting of the College of Supervisors for Non-Bank Financial Institutions (CSNBFI) in the West African Monetary Zone (WAMZ), held in Abuja, Cardoso highlighted the growing trends in the Fintech space and their potential risks to global financial stability.

Represented by the Acting Director of the Other Financial Institutions Department, Mr. Abayomi Arogundade, Cardoso emphasized, “We must continue to push forward the agenda of strengthening anti-money laundering practices, enhancing supervisory capacity on cybersecurity and Fintech regulation, and implementing a risk-based supervisory approach.

“We reiterate the importance of monitoring trends, risks, and innovations of NBFIs/OFIs, as their increasing transaction volumes pose significant risks to financial system stability.”

Addressing the issue of Fintech loans, Cardoso remarked, “Fintech loans are one of the most commonly reported innovations. While these may appear small relative to the size of credit by Deposit Money Banks (DMBs), there is a growing trend in the volume of these loans globally.

“In many cases, Fintech credit is provided via electronic platforms that connect lenders to borrowers, where the platform acts as a financial auxiliary. In some instances, however, loans are taken on the balance sheet of these platforms, making them akin to new types of financial intermediaries. These entities are typically Fintech firms offering applications, software, and other technologies to streamline mobile and online banking.”

He further noted that in many jurisdictions, digital firms hold banking licenses and are subject to prudential requirements, or they may be regulated as Fintech payment service firms. Innovations linked to crypto or stablecoin assets have also been reported by some jurisdictions.

Cardoso urged greater cooperation among regulatory bodies in the sub-region to prevent the exploitation of technological innovations to the detriment of the public and financial institutions.