CBN AML directive triggers tech reset as banks, fintechs battle data, talent gaps

Nigeria’s financial sector is entering a critical transition phase as a new Anti-Money Laundering (AML) directive from the Central Bank of Nigeria (CBN) forces banks and fintech firms to overhaul outdated systems, exposing deep-rooted weaknesses in data quality, technology infrastructure and skilled manpower.

The CBN has given financial institutions 90 days to submit detailed AML implementation roadmaps, a move industry experts say is less about compliance paperwork and more about compelling a full-scale technology reset across the ecosystem.

“This is not just another regulatory exercise. It is a system reset. The expectation now is clear, institutions must build real, working infrastructure, not just policies,” Tolu Adetuyi, co-founder and chief innovation officer at Prembly told BusinessDay.

The directive comes at a time when Nigeria’s digital finance sector is expanding rapidly, driven by mobile banking, fintech innovation and increased cross-border transactions. However, compliance systems have not kept pace with this growth, leaving institutions vulnerable to fraud, illicit flows and regulatory breaches.

Read also: Bank, Fintechs face scrutiny as CBN sets June deadline on AML systems

A shift from manual processes to intelligent systems

For many banks and fintechs, the immediate challenge is confronting the reality of their existing AML frameworks. Industry insiders say a significant number of institutions still rely on manual or semi-automated processes, including spreadsheet-based tracking systems.

“Some institutions are running AML on spreadsheets. That is not sustainable. In today’s environment, that is a risk exposure,” Adetuyi said.

The CBN’s requirement for detailed roadmaps is expected to force organisations to assess their current capabilities honestly, from customer identification processes to transaction monitoring systems, and define how technology will close those gaps.

This could trigger a wave of investments in compliance technology, particularly in identity verification, real-time monitoring tools and case management systems that give regulators and compliance teams better visibility.

Data fragmentation emerges as the biggest risk

At the centre of the compliance challenge is data, or the lack of it. Financial institutions often operate multiple disconnected systems, leading to fragmented, outdated or incomplete customer information.

Experts warn that this fragmentation undermines the ability to detect suspicious activity effectively.

“It is impossible to monitor what you cannot see. Many institutions will discover that their data is not only incomplete but also inconsistent across systems,” Adetuyi said.

One major weakness is the reliance on static customer verification processes. Many banks verified customers at onboarding, sometimes years ago, without continuous updates to reflect changes in behaviour, financial activity or risk exposure.

“A customer verified five years ago is not the same customer today. Risk profiles evolve, and compliance systems must evolve with them,” he said.

The new directive is expected to push institutions toward continuous identity verification models that incorporate behavioural analytics, biometric checks and real-time updates.

Outdated monitoring systems struggle to keep up

Transaction monitoring systems are also under pressure. Many banks still operate rule-based systems configured years ago, which are increasingly ineffective against modern fraud tactics.

These systems often generate high volumes of false positives, overwhelming compliance teams, while allowing more sophisticated suspicious activities to go undetected.

“The fraud landscape has changed, but many monitoring systems have not. That creates a dangerous gap,” Adetuyi said.

To address this, experts say institutions will need to adopt hybrid models that combine traditional rule-based approaches with artificial intelligence capable of identifying emerging patterns and anomalies in real time.

Such systems, while more effective, require significant investment and integration with existing infrastructure, a challenge for smaller institutions with limited resources.

Talent shortage complicates compliance transition

Even as banks look to upgrade their systems, a shortage of skilled professionals is emerging as a major constraint. Compliance today requires expertise at the intersection of regulation, data science and technology, a combination that is still scarce in Nigeria and across Africa.

“There is a limited pool of people who understand both compliance requirements and the technology needed to implement them,” Adetuyi said.

Some institutions are responding by increasing hiring, but experts warn that talent alone cannot solve structural problems.

“You cannot hire your way out of a broken system. Without the right tools and data, even the best teams will struggle to deliver results,” he added.

Breaking organisational silos

Another challenge is organisational structure. Traditionally, AML compliance has been confined to dedicated compliance units, with limited integration across other departments.

The new directive is expected to change that, requiring collaboration across product development, operations, customer service and risk management teams.

“Compliance cannot exist in isolation anymore. If it does, the gaps will remain,” Adetuyi said.

This shift will require significant internal change management, as institutions work to embed compliance into their broader business processes.

Toward real-time intelligence and ecosystem collaboration

Beyond internal reforms, the directive could also reshape how financial institutions collaborate on fraud prevention. Industry stakeholders are increasingly discussing the need for secure, real-time data sharing frameworks that allow institutions to exchange fraud intelligence without compromising customer privacy.

Such collaboration could help stop fraudulent activities at an early stage, preventing them from spreading across multiple institutions.

“This is where the industry needs to go. Fraud prevention must become a shared responsibility,” Adetuyi said.

Solutions such as shared intelligence platforms are already emerging, offering ways to detect and respond to threats collectively.

Read also: How one homegrown platform aligns with Nigeria’s new mandatory AML standards

A defining test for Nigeria’s financial system

With the 90-day deadline already underway, analysts say the CBN directive will act as a stress test for the resilience and readiness of Nigeria’s financial institutions.

Those that invest early in modern AML infrastructure, including clean data systems, real-time monitoring tools and integrated compliance frameworks, are likely to gain a competitive advantage in an increasingly regulated environment.

Others risk falling behind, facing not only regulatory penalties but also reputational damage in a sector where trust is critical.

“The institutions that take this seriously will come out stronger. Those that do not will find themselves struggling to catch up,” Adetuyi said.

As Nigeria pushes toward a more transparent and secure financial system, the shift triggered by the CBN’s AML directive signals a broader transformation, one that places data, technology and collaboration at the centre of compliance in Africa’s largest economy.