The Central Bank of Nigeria (CBN) has established a dedicated Compliance Department to strengthen regulatory oversight and address emerging risks in the financial sector, including financial crimes, cybersecurity, and environmental, social, and governance (ESG) standards.
The new department, created in the first quarter of 2025 and fully operational from the second quarter, was announced in a circular signed by Olubunmi Ayodele-Oni. The move forms part of the apex bank’s broader structural reforms designed to consolidate supervisory roles, improve efficiency, and ensure targeted regulation of non-prudential risks.
Expanded Oversight Functions
The Compliance Department will now oversee four key areas:
Financial Crime Supervision — covering anti-money laundering (AML), counter-financing of terrorism (CFT), counter-proliferation financing (CPF), and sanctions compliance.
Market Conduct Supervision — including disclosure practices, complaint handling, and advertising standards.
Enterprise Security Supervision — focusing on cybersecurity, data protection, and third-party risk management.
Corporate Governance and ESG Supervision — assessing board effectiveness and compliance with ESG frameworks.
The CBN directed all regulated financial institutions to route future reports, correspondence, and inquiries on these areas to the Director of the Compliance Department, with further guidance on submission procedures to follow.
“The establishment of the Compliance Department is a strategic move to embed regulatory discipline and ensure robust oversight of non-prudential risks,” the circular stated.
Rising Fraud Risks
The development comes amid growing concerns over financial fraud in Nigeria. In July, CBN Governor Olayemi Cardoso disclosed that fraud incidents surged by 45 per cent within one year, with 70 per cent of losses linked to digital channels, particularly unregulated virtual asset platforms.
Cardoso, represented by Deputy Governor for Economic Policy Muhammad Sani Abdullahi at an EFCC public lecture, noted that while digital innovation has boosted financial inclusion, it has also introduced complex regulatory and security challenges.
Global Standards in Focus
In line with global reforms, the CBN recently directed all players in the payment ecosystem—including banks, mobile money operators, switching companies, and super agents—to complete migration to the ISO 20022 payments messaging standard and implement geo-tagging of payment terminals by October 31, 2025.
The apex bank reaffirmed its commitment to collaborating with financial institutions to ensure a smooth transition and maintain the highest standards of regulatory compliance.
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