Breaking News, Explained: Central Bank of Nigeria Mandates Real-Time AML Transaction Alerts

On May 20, 2025, the Central Bank of Nigeria (CBN) issued the letter “Exposure of Draft Baseline Standards for Automated Anti-Money Laundering (AML) Solutions – Request for Comments.” This draft features a directive requiring all financial institutions to establish real‑time transaction alert systems that flag suspicious activities. 

Affected institutions include all deposit money banks, microfinance banks, primary mortgage banks, digital payment service providers, and any other financial institution subject to AML/CFT/CPF regulations in Nigeria, including virtual asset service providers and wallet providers.

Among other requirements, the draft stipulates there must be real-time alerts for high-risk transactions, including significant cash deposits, cross‑border transactions, cryptocurrency‑related activity, and any other activities flagged as suspicious by existing AML regulations in the country.

This move to update the country’s AML defenses is part of Nigeria’s general commitment to protect the integrity of its financial system in response to rapid digital transformation and the emergence of novel financial products.

The key objectives of the CBN’s directive include securing the effective implementation of automated AML solutions, promoting interoperability and integration, ensuring detection accuracy, facilitating compliance with local and international regulations, and providing a framework for continuous improvement.

The CBN has opened the draft for public feedback until June 13, 2025, and plans to give institutions 12 months after the final framework is published to comply with the new standards. The CBN states this new standard is informed by a thorough assessment of existing solutions within the industry and aligns with global AML best practices, including those of the Financial Action Task Force—the global AML watchdog.

Why it matters

Nigeria is working to address deficiencies in its regulatory approaches to improve its financial reputation and remove its Financial Action Task Force status of a jurisdiction under increased monitoring by the end of 2025. As money laundering techniques have adapted to new technologies, outdated monitoring systems expose financial institutions to risks of financial crime, money laundering, reputational damage, regulatory penalties, and even license revocation—making up-to-date legislative and technological tools essential.

Real-time alerts are one way of helping institutions spot red flags of money laundering so they can prevent it and report offenders to the relevant authorities. This more proactive approach could make it significantly more difficult for criminals to funnel illicit funds through Nigeria’s financial system.

The risks of non-compliance are high for all AML-obligated entities. Once this framework is finalized, institutions that fail to implement real-time alerts and follow new AML standards within the 12-month window could face penalties, restrictions on business activities, or licensing suspensions.

Industry-wide, this directive signals a change in behavior. Banks, fintechs, and crypto platforms will need to invest in intelligent transaction monitoring tools, automated risk scoring, and robust reporting systems, and some may look to third-party providers to accelerate implementation. Compliance in Nigeria will now need to be dynamic, automated, and driven by data in real time.

How Sumsub can help

As the CBN looks to update its AML standards, financial institutions operating in Nigeria need solutions that ensure thorough compliance with evolving regulations with as little friction as possible for end users. This is where Sumsub comes in, with expertise in making life easier for regulated and non-regulated institutions all over the world.

Know Your Customer (KYC) and Know Your Business (KYB)

KYC and KYB are critical under Nigeria’s new real-time AML transaction alert law—they establish the verified identity of individuals and legal entities, which is essential to accurately detect, assess, and report suspicious activities. Without strong customer and business verification, alerts lack context, making it impossible to comply effectively or meet regulatory expectations.

Real-time AML alerting

Sumsub’s AML Compliance Solution includes real-time alerting that detects suspicious behavior as it happens. The system uses behavioral analytics and predefined risk triggers that instantly flag anomalies, helping institutions meet CBN’s demand for faster incident detection and mitigation in real-time.

AI-powered Transaction Monitoring solution

Sumsub’s AML Transaction Monitoring dashboard helps simplify compliance for businesses around the world with cutting-edge AI-powered tools. The interface is designed to be user-friendly and intuitive, helping to cut reaction times.

Customizable and dynamic risk-scoring models

This regulation requires institutions to implement a risk-based approach, which is why Sumsub allows users to tailor risk-scoring models to match internal policies, user types, or transaction categories. Users are free to calibrate what counts as suspicious and adjust thresholds in real time.

Integration ease and scalability

Sumsub’s solutions easily integrate with existing systems that help users gain insights, take action, and accelerate compliance. They are also designed for scalability, helping businesses establish practices for CBN requirements and whatever may come next as the regulatory landscape changes.

The CBN’s new directive marks a pivotal shift in Nigeria’s fight against financial crime. For financial institutions, crypto companies, and fintechs operating in the country and seeking to expand into Nigeria, this is both a challenge and an opportunity. Acting quickly secures compliance with new standards—and builds a resilient, tech-driven defense against evolving global threats.