Key Takeaways for Financial Institutions
- The Central Bank of Nigeria has issued new Baseline Standards for Automated Anti-Money Laundering (AML) Solutions, requiring financial institutions to adopt technology-driven monitoring systems.
- Institutions must deploy automated transaction monitoring tools capable of detecting suspicious activity and maintaining verifiable audit trails.
- Regulated entities are required to commence implementation, with full compliance deadlines of 18 months for Deposit Money Banks and 24 months for other financial institutions from the date of issuance.
On March 10, 2026, the Central Bank of Nigeria issued Circular BSD/DIR/PUB/LAB/019/002, establishing Baseline Standards for Automated Anti-Money Laundering Solutions for regulated financial institutions.
The circular sets out the expectations for Deposit Money Banks, Microfinance Banks, Fintechs, Payment Service Providers, and other regulated entities. It provides a framework to strengthen transaction monitoring, integrate customer identity and risk data, and ensure compliance with existing regulatory requirements.
Automation and Transaction Monitoring
The circular requires regulated institutions to deploy automated monitoring systems to enhance oversight of financial transactions.
These systems are expected to:
- Continuously monitor transactions and flag unusual activity;
- Support structured case management for investigations; and
- Maintain clear audit trails showing how alerts are generated, reviewed, and resolved.
The circular encourages automation as a tool to strengthen existing compliance processes, not as a replacement for human oversight.
Use of Emerging Technologies
The circular highlights that technology, including Artificial Intelligence and Machine Learning, can support transaction monitoring and risk detection.
Institutions using such tools are expected to:
- Ensure appropriate governance and oversight of automated systems;
- Maintain reviewable alerts for compliance personnel; and
- Periodically assess system performance for reliability and accuracy.
Regulatory responsibility remains with the institution, regardless of technology used.
Integration of Customer Data
The circular emphasises the importance of integrating customer identity and risk data within monitoring systems.
Institutions are expected to:
- Link transaction monitoring to KYC and customer risk information (including BVN-linked identity data);
- Analyse activity against historical customer behaviour; and
- Apply a risk-based approach when assessing alerts.
This ensures that transaction reviews are informed by a customer’s established profile and historical behaviour.
Implementation Timelines
The CBN has set a phased schedule for compliance:
- Commencement: Institutions are expected to begin implementation promptly from the date of issuance.
- Full compliance:
- 18 months for Deposit Money Banks
- 24 months for Microfinance Banks, Fintechs, and other financial institutions
- 18 months for Deposit Money Banks
Compliance will be monitored through supervisory reviews, with sanctions applied under existing regulatory frameworks where necessary.
Stark Legal Advisory
At Stark Legal, we advise clients that the implementation roadmap represents a critical compliance milestone.
The roadmap should reflect board-level oversight and clearly outline how institutions plan to transition toward automated monitoring systems. Proper planning demonstrates governance diligence and mitigates potential regulatory scrutiny.
Conclusion
The CBN’s new circular sets a clear framework for technology-supported Automated Anti-Money Laundering compliance. Financial institutions that start preparing now, aligning their systems and governance structures with the circular, will be well-positioned to meet the implementation deadlines.
For assistance in preparing your Board-authorized implementation roadmap or reviewing your Automated Anti-Money Laundering compliance framework, contact our Regulatory team at info@starklegalng.com.
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