Banks and fintech companies in Nigeria will soon rely more on automated systems powered by artificial intelligence (AI) to detect money laundering and fraud after the Central Bank of Nigeria (CBN) introduced new baseline standards for automated anti-money laundering (AML) solutions across the banking sector.
The guidelines, issued in March 2026, formally recognise artificial intelligence and machine learning as tools banks and payment companies can use to monitor suspicious transactions.
They also require financial institutions to deploy automated anti-money laundering systems capable of detecting unusual activity and reporting it to regulators.
Under the directive, banks, mobile money operators, international money transfer operators and other regulated financial institutions must implement systems that support customer risk profiling, sanctions screening, transaction monitoring and case management.
“As financial services become increasingly digitised and complex, manual AML/CFT/CPF controls are no longer sufficient to manage evolving risks,” the central bank said in the framework.
For years, many compliance processes in Nigeria’s financial sector relied heavily on manual reviews and rule-based systems. The new standards shift the focus toward technology-driven monitoring.
Banks will now be expected to deploy automated platforms that can track customer behaviour, flag unusual transaction patterns and support real-time reporting of suspicious activity to regulators, including the Nigerian Financial Intelligence Unit.
These systems must integrate with core banking platforms and customer onboarding systems so institutions can analyse transactions in the context of a customer’s profile rather than isolated payment data.
The framework also encourages the use of tools such as anomaly detection, behavioural pattern recognition and automated risk scoring. Systems should be capable of identifying name variations during sanctions checks and screening customers against politically exposed persons lists.
However, the central bank insists technology cannot operate without oversight. Financial institutions that deploy machine-learning models must validate those systems regularly and ensure investigators can understand why alerts were triggered.
Real-time fraud monitoring becomes a requirement
The new standards don’t just focus on money laundering, as banks must also deploy automated fraud monitoring tools that track transactions across cards, electronic channels, deposits and lending platforms.
The systems are expected to operate in real time or near real time so institutions can stop suspicious transactions before funds leave an account.
Fraud monitoring tools may operate on the same platform as anti-money laundering systems, but the regulator requires institutions to maintain separate management and governance structures for each function.
Data from the Financial Institutions Training Centre shows fraud losses climbed to ₦3.29 billion in the first quarter of 2025, representing a 603% increase year-on-year, with 12,347 cases reported across the banking sector.
Regulators say the growing use of digital payment platforms, instant transfers and online banking has created new opportunities for organised financial crime.
Aligning Nigeria with global compliance trends
Nigeria’s new regulations also place the country within a bigger global shift toward technology-based compliance.
Industry estimates suggest that about 90 per cent of financial institutions worldwide will use artificial intelligence or machine learning in anti-money laundering programmes by 2026, up from roughly 62% in 2024.
Regulators in other jurisdictions are already seeing similar adoption. Data from the UK’s Financial Conduct Authority shows about 75% of financial firms already use AI in compliance operations, with another 10% planning deployment within three years.
These technologies can reduce false alerts by as much as 40%, allowing compliance teams to focus on genuinely suspicious transactions rather than reviewing thousands of routine alerts.
The regulatory technology market is also expanding. Analysts estimate the global RegTech market could reach $19.5 billion by 2026, driven largely by demand for AI-powered compliance systems.
Implementation timeline for banks and fintechs
The central bank has given financial institutions a phased timeline to implement the new framework.
Banks classified as deposit money institutions must fully comply within 18 months, while other financial institutions have up to 24 months to deploy compliant systems.
Each institution must also submit a detailed implementation roadmap to the regulator within three months of the circular’s issuance.
Supervisory teams will monitor compliance through inspections and regulatory reviews. Institutions that fail to meet the requirements risk sanctions under existing banking regulations.
Part of a clean-up of Nigeria’s financial system
The new CBN AI anti-money laundering (AML) standards follow several regulatory movements aimed at strengthening financial oversight in Nigeria.
In recent years, the central bank strengthened customer verification regulations, requiring new account holders to provide a Bank Verification Number or National Identification Number. Authorities also introduced stronger reporting requirements for fraudulent transactions and refund investigations.
These reforms were important in Nigeria’s removal from the grey list of the Financial Action Task Force in 2025, after the country improved transparency in its financial system.
Regulators are now pushing banks and fintech companies toward a more integrated financial crime monitoring system where fraud detection and anti-money laundering management share data and analytics.
Officials say the goal is to detect suspicious activity faster and close the gaps criminals use to move money through the financial system.
