CBN Urges Financial Institutions to Combat $3tr Global Illicit Fund Flow
By Patience Ikpeme
In a bid to fortify Nigeria’s financial sector against the staggering $3 trillion in illicit funds circulating globally, the Central Bank of Nigeria (CBN) has issued a call to financial institutions to elevate their compliance standards to meet international benchmarks.
This directive came during a high-level Mandatory Compliance and Anti-Money Laundering (AML) Training Workshop, where the apex bank emphasized the critical need for robust regulatory adherence and risk management.
Ms. Shola Phillips, Special Adviser to the CBN Governor on Compliance, stressed the necessity for institutions to evolve their AML/CFT programs in response to the dynamic financial landscape. “Regulators expect financial institutions to maintain dynamic, risk-based AML/CFT programmes that are responsive to the evolving financial environment,” Phillips stated, highlighting the importance of proactive regulatory engagement and innovative compliance solutions.
The workshop, designed for compliance officers, trade operations specialists, and correspondent banking teams, focused on global regulatory trends and strategies to mitigate emerging financial risks.
A key highlight was the alarming statistic shared by Stephanie Bailey, Head of EMEA AML Risk Management for Foreign Correspondent Banking, who revealed that over $3 trillion in illicit funds traverse the global financial system annually. This revelation underscored the urgency for Nigerian financial institutions to reinforce their due diligence measures and leverage technology-driven risk assessments.
Siobhan Ni Ealaithe, Managing Director of Citi’s Correspondent Banking Group, reinforced the importance of strong governance frameworks, particularly the implementation of stringent Know Your Customer (KYC), Know Your Business (KYB), and Know Your Transaction (KYT) protocols. These measures are pivotal in preventing financial institutions from unwittingly facilitating illicit activities.
The CBN’s initiative aligns with Governor Olayemi Cardoso’s vision for a resilient and trustworthy financial system. “A strong financial system is built on trust, and trust is earned through integrity and compliance,” Governor Cardoso has consistently stated. The apex bank’s commitment to setting high regulatory standards aims to protect Nigeria’s financial ecosystem and align it with global best practices.
By enhancing compliance and strengthening risk management frameworks, the CBN seeks to safeguard Nigeria’s financial sector from the pervasive threat of global financial crime. This proactive approach is crucial for maintaining the sector’s credibility and ensuring its resilience in the face of evolving financial risks, ultimately contributing to the nation’s economic stability.
