There are certain compliance standards for fintechs in Nigeria. The Anti-Money Laundering regulations, provided by CBN regulate virtually all sectors and institutions in Nigeria including Fintechs.
These regulations provide compliance standards for all financial institutions in Nigeria. They relate largely to money laundering and financial crimes.
The 2022 AML regulations are to forestall cyber breaches and combat all forms of cyber threats. The goal is to reduce the risks in digital financial transactions.
This post seeks to highlight key regulatory standards provided by the AML regulations in Nigeria for all financial institutions in Nigeria, including fintechs.
Compliance Standards For Fintechs According To AML
A Fintech is required to file suspicious transaction reports to the (Nigerian Financial Intelligence Unit) NFIU where funds, property, and assets are linked to terrorism, weapons of mass destruction, sexual exploitation, bribery, etc.
Where any assets are frozen or where actions are taken with the UN Security Council resolutions on terrorism and financing, the reports go to the NFIU.
A Fintech is also required to adopt policies in tandem with AML and CFT regulations and develop internal controls in line with the regulations.
Also, they are to ensure that all employees, and agents clearly understand the AML regulations.
Hence, the ultimate responsibility of AML compliance lies with the Board and top management.
There shall also be a designated Chief Compliance Officer to implement AML regulations.
It is mandatory that all FIs including Fintechs submit their compliance report to the CBN by the 31st of Dec of every financial year.
Fintechs shall not operate anonymous accounts or accounts with fictitious names.
Additionally, Shell banks are prohibited from operating in Nigeria.
A Fintech shall also maintain records of domestic and international transactions for at least five years after completion or for such longer period as required by CBN.
Fintechs are to submit their annual AML employee training program for the following year to the CBN.
These compliance standards for fintechs highlighted above alongside the other provisions in the AML regulations 2022, are innovative strategies deployed by the CBN in collaboration with other key agencies to combat cybersecurity and money laundering in Nigeria.
All financial institutions, including Fintechs, must adequately familiarize themselves with these provisions for effective compliance.
References
1 https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.cbn.gov.ng/Out/2022/FPRD/AML%2520CIRCULAR%2520AND%2520REGULATIONS%2520MERGED.pdf&ved=2ahUKEwjtwIqCkan9AhUEZ_EDHU9KBdcQFnoECBIQAQ&usg=AOvVaw1AXHtY5H4JCCX5lSUOfbu9 accessed on Feb 21 2023
2 David Nkang Odu, “Impact of AML/CFT regulations on digital disruptions (FinTech) and financial inclusion in Sub-Saharan” available at, https://dc.cbn.gov.ng/bullion/vol44/iss4/2/ accessed on Feb 21 2023
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