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.

Nigeria’s mobile money sector experienced significant growth, in 2024, marked by substantial increases in transaction volumes, user adoption, and strategic investments.

For instance, between January and July 2024, licensed mobile money operators, including PalmPay, processed transactions totaling ₦41.5 trillion.

This represents a 74% increase compared to the ₦23.9 trillion recorded during the same period in 2023.

Given that the total transaction value for the entire year of 2023 was ₦46.6 trillion, the 2024 figures indicate a trajectory toward surpassing previous records.

Flip to 2025, PalmPay is forecasting that with smartphone penetration projected to reach 65% by 2026 as well as improved internet infrastructure, more Nigerians will be enabled to access mobile money services.

Speaking during a media parley at their Lagos office, Chika Nwosu, the managing director, PalmPay, reiterated that smartphone penetration, internet connectivity and innovative technologies as key factors that are crucial to increased access to mobile money services in Nigeria.

According to him, with smartphone penetration projected to reach 65% by 2026 as well as improved internet infrastructure, more Nigerians will be enabled to access mobile money services.

He disclosed that, with fintech companies such as PalmPay evolving through digital wallets and seamless payment gateways, accessibility to mobile money service was bound to expand soon.

He emphasized that with demand for affordability of financial services growing, more opportunities would be unlocked for PalmPay in the nearest future.

“From under 10,000 agents in 2015 to over 1.5 million agents in 2023, agent networks have become the backbone of mobile money operations in Nigeria. For this reason, we are more likely to see a sharp increase in the number of mobile money agents and merchants. Apart from that, MMOs will increasingly use artificial intelligence to improve customer experiences, such as machine learning, predictive analytics, and fraud detection,” he said.

Donald Ubeh, head, Risk and Compliance, MLRO at PalmPay, in a presentation on impact of Fintech, stated that with more collaboration with regulators and other financial institutions, it was only a matter of time that Nigeria’s name will be expunged from the list.

While highlighting the impact of fintech companies such as PalmPay, Ubeh explained that the berth of PalmPay has led to economic empowerment particularly for individual users and several Small and Medium Scale enterprises.

He noted that many Nigerians including bank customers have migrated their funds to PalmPay owing to convenience and accessibility it provides.

He added that mobile money operators were conceived with the aim of driving financial inclusion for the underserved and unbanked population.

According to EFInA, increasing adoption of fintech companies by Nigerians has led to increase in financial inclusion rate by 13% in 13 years.

In his presentation, Femi Hanson, head, Marketing and Communications, PalmPay, disclosed the company’s seven (7) Mobile Money Forecasts for 2025:

1. Financial Inclusion

Fintech companies integrated innovative technologies, such as digital wallets and seamless payment gateways, USSD to expand service accessibility.

2. Collaboration with Regulators, Financial Institutions

More Fintech collaboration with regulators is crucial to fostering a stable financial ecosystem and address compliance concerns to ensure that Nigeria’s removal from the FATF grey list.

Interestingly, just last Friday, the Nigerian government, through the efforts of the National Information Technology Development Agency (NITDA), and the Nigerian Financial Intelligence Unit, (NFIU) have kick-started an initiative that would ensure the exclusion of the country from the FATF Grey List by May 2025.

This initiative was a directive of President Bola Tinubu to the request of the NFIU to develop and implement an Anti-Money Laundering/Counter Financial Terrorism/Counter Proliferation of Firearms Data Management Framework and Platform in collaboration with NITDA. [READ MORE here]

3. Increased Smartphone Adoption

PalmPay has said that increased adoption of smartphones and Internet connectivity will enable more Nigerians to have access to mobile money services, particularly the unbanked and underserved.

Smartphone penetration is projected to reach 65% by 2026, will enable more Nigerians to access mobile money services. – PalmPay

4. Increased Demand for Affordability

The demand for affordable offerings and savings will increase and this is where the fintech will plug in.

5. Extensive Agency Network

From under 10,000 agents in 2015 to over 1.5 million agents in 2023, agent networks have become the backbone of mobile money operations in Nigeria. “We expect to witness growth in this aspect”, Mr. Hanson said.

6. Expansion of AI, Blockchain, and Big Data.

MMOs will increasingly use artificial intelligence to improve customer experiences, such as through machine learning, predictive analytics, and fraud detection.

7. Diversification of Digital Services

“We will see more operations in insurance tech, health tech, savings & wealth all on the fintech platform”, he added.

PalmPay Story:

PalmPay is an emerging markets-focused, multinational fintech founded in 2019.

By leveraging cutting-edge technology, the Fintech makes world-class financial services available to the mass market in regions that need it the most.

PalmPay operates Nigeria’s biggest financial app by monthly active users of 16 million and are rapidly expanding into new markets.

Today, PalmPay serves over 35 million customers and 1.2 million business users with digital accounts, real-time payments and savings and credit solutions.