The Traffic

CBN Directs Banks to Implement Real-Time Monitoring for Suspicious Transactions

By Achimi muktar 

In a bold move to tighten the noose on money laundering and financial crimes, the Central Bank of Nigeria (CBN) has mandated all financial institutions to deploy real-time transaction monitoring systems as part of a sweeping overhaul in Anti-Money Laundering (AML) compliance.

This directive, revealed in a letter dated May 20, 2025 (Ref: BSD/DIR/CON/AML/018/033), titled “Exposure of Draft Baseline Standards for Automated Anti-Money Laundering (AML) Solutions – Request for Comments,” signals a transformative shift in the way banks handle suspicious transactions.

Signed by Olubukola Akinwunmi, Director of Banking Supervision, the CBN’s directive underscores an urgent need for Nigerian banks to embrace cutting-edge, automated AML solutions. These new standards are open for industry feedback but already lay down clear expectations: financial institutions must now respond to high-risk transactions—including large cash deposits, cryptocurrency trades, and cross-border transfers—in real time.

“This standard is informed by a comprehensive assessment of existing solutions within the industry and aligns with global best practices, including recommendations by the Financial Action Task Force (FATF),” the letter states.

The CBN’s push for real-time alerts comes amid a rapidly evolving digital banking landscape, where financial crimes are increasingly sophisticated. The regulator is aiming to modernize AML efforts using artificial intelligence (AI) and machine learning (ML) to sniff out anomalies and patterns in transaction behavior that human eyes might miss.

Here’s what’s changing:

Immediate Alerts for Suspicious Activity: Banks must now detect and act on high-risk transactions within a set timeframe.

AI & Machine Learning Integration: New systems must feature behavioral pattern recognition, automated risk scoring, and adaptive learning.

Automated Customer Verification: Banks are required to plug into BVN and NIN databases for instant Know Your Customer (KYC) checks.

Dynamic Risk Profiling: Customers will now be continuously analyzed and classified based on their transactional behavior and risk exposure.

Institutions are also expected to regularly test these systems to reduce false positives—a common flaw in older AML setups—while balancing accuracy with responsiveness.

According to the draft, solutions must be capable of supporting multiple risk scenarios with configurable filters and segmentation tools. This means banks must detect red flags before they escalate—no more delayed alerts or post-incident analyses.

The document is currently accessible on the CBN’s official website, and stakeholders across the financial sector have been encouraged to review the draft and provide comments that could shape its final form.

This move by the CBN reflects a strategic push to not only align with international AML norms but also protect the integrity of Nigeria’s financial system amid growing digital risks.

As financial institutions brace for this real-time revolution in compliance, one thing is clear: Nigerian banks can no longer afford to be slow when crime moves in milliseconds.