The Central Bank of Nigeria (CBN) has heightened its focus on terrorism financing supervision, a development that is expected to place greater scrutiny on how financial institutions manage existing financial crime compliance controls.
The apex bank, in a press statement issued on September 8, 2026, identified terrorism financing supervision as a current supervisory priority, signalling the need for banks and other financial institutions to demonstrate that their compliance frameworks are not only in place but are effective in practice.
According to Kanayo Kemuwa, a RegTech founder and specialist in compliance and technology infrastructure, the CBN’s position should be viewed as an important warning for financial institutions to reassess their existing systems.
“The message is not necessarily about introducing an entirely new regulatory framework. It is about placing greater supervisory attention on obligations that already exist,” Kemuwa said.
He noted that financial institutions should expect closer examination of areas including terrorism financing risk management, transaction monitoring, sanctions screening and suspicious transaction reporting.
Kemuwa said effective compliance must begin at the point of customer onboarding, stressing that the quality of information captured at that stage can determine the effectiveness of subsequent financial crime controls.
“Accurate data capture is fundamental to effective financial crime compliance. If customer information is incomplete, inaccurate or poorly structured at onboarding, every subsequent control is affected,” he said.
He identified customer due diligence, beneficial ownership information, source of funds, source of wealth where applicable, customer risk classification and the quality of customer information as areas institutions should review.
The RegTech specialist also stressed the importance of moving beyond one-time screening at onboarding, noting that customers, beneficial owners and relevant counterparties require appropriate ongoing screening against sanctions and other risk indicators.
According to him, institutions must also strengthen their ability to identify and resolve potential matches while ensuring that transaction monitoring systems can detect unusual patterns and changes in customer behaviour.
“Institutions need to examine whether they are conducting real-time or sufficiently timely monitoring of transactions, rather than relying primarily on retrospective reviews,” Kemuwa said.
He added that financial institutions should be able to identify unusual transaction behaviour, high-risk transactions, unusual counterparties and potentially connected transactions as part of a broader effort to strengthen their financial crime controls.
Reporting and investigations, he said, are equally important, particularly where institutions need to demonstrate how alerts were handled and how decisions were reached.
Kemuwa said institutions should ensure that alerts are properly investigated, escalated and reported where required, while maintaining a clear audit trail showing who reviewed an alert, the basis for the decision and the action that followed.
Against this background, he argued that regulatory technology should no longer be viewed simply as a technology investment but as a core component of modern compliance infrastructure.
“This is where RegTech needs to move from being viewed as a technology investment to being recognised as part of the compliance infrastructure,” he said.
According to him, an integrated RegTech environment can support financial institutions across several stages of the compliance process, including customer onboarding, screening, risk assessment, transaction monitoring, investigations and reporting.
He said technology can help institutions validate customer data, automate appropriate screening, continuously assess risk, identify transaction patterns, manage alerts and maintain reliable audit trails.
However, Kemuwa stressed that technology should complement rather than replace compliance professionals.
“The objective is not to replace the compliance professional with technology. It is to give compliance teams the data, intelligence and operational visibility required to make better decisions and respond faster,” he said.
He further noted that technology-enabled compliance could become increasingly important for Nigerian financial institutions seeking to expand into international markets.
According to him, institutions operating across multiple jurisdictions face different regulatory expectations, sanctions regimes, reporting obligations, customer identification requirements and supervisory standards.
A fragmented and largely manual compliance environment, he said, could make international expansion more difficult to manage.
“A well-designed RegTech framework provides a stronger foundation for expansion because the institution’s compliance architecture is built around structured data, consistent controls, automated monitoring and demonstrable evidence,” Kemuwa said.
He added that such systems can help institutions adapt their control environments as they enter new markets and interact with different customers, currencies, payment channels and counterparties.
Kemuwa therefore described the CBN’s latest position as more than a regulatory compliance issue, arguing that it presents an opportunity for financial institutions to reassess the way their compliance infrastructure is designed.
“The institutions that will remain resilient are those that know their customers, understand their counterparties, capture accurate data, monitor activity effectively, report appropriately and maintain evidence of their decisions,” he said.
He urged financial institutions to consider whether their existing compliance frameworks could withstand closer regulatory examination.
“The question every financial institution should now be asking is simple: if the regulator examined our framework tomorrow, would we be able to demonstrate that our controls exist, or that they actually work?” Kemuwa said.
He maintained that as regulatory expectations become more demanding, technology-enabled compliance is increasingly becoming a critical part of ensuring that financial institutions remain compliant, audit-ready and capable of pursuing international growth.
Kanayo Kemuwa is a RegTech founder specialising in compliance and technology infrastructure, with experience spanning digital banking systems and financial technology.
