CBN Establishes New Compliance Department to Tackle Financial Crimes, Cybersecurity, and ESG Risks
ABUJA, FCT – September 5, 2025 – The Central Bank of Nigeria (CBN) has formally announced the establishment of a dedicated Compliance Department, a strategic move aimed at strengthening its regulatory oversight and addressing the rise of complex, non-prudential risks in the nation’s financial system.
In a circular signed by Olubunmi Ayodele-Oni, the apex bank confirmed that the new department was created in the first quarter of 2025 and became fully operational in the second quarter. This structural reform is designed to consolidate supervisory functions and provide focused attention on emerging threats like financial crime, cybersecurity, and lapses in corporate governance.
Key Focus Areas: A Multi-Pronged Approach to Risk Management
The establishment of the Compliance Department centralizes the oversight of several critical areas that have become increasingly important in a digitized economy. According to the CBN, the department’s core responsibilities now include:
Financial Crime Supervision: Combating Anti-Money Laundering (AML), Counter-Financing of Terrorism (CFT), Counter-Proliferation Financing (CPF), and ensuring compliance with international sanctions.
Market Conduct Supervision: Overseeing fair treatment of customers, including disclosure and transparency practices, complaints management, and advertising standards.
Enterprise Security Supervision: Focusing on mitigating technological risks such as cybersecurity threats, data protection breaches, and third-party vendor risks.
Corporate Governance and ESG Supervision: Ensuring board effectiveness and promoting the adoption of sustainable Environmental, Social, and Governance (ESG) principles within financial institutions.
Why Now? CBN Responds to a Surge in Digital Financial Fraud
The creation of this department is not happening in a vacuum. It is a direct and robust response to the alarming increase in financial fraud within Nigeria.
In July, CBN Governor Olayemi Cardoso revealed that financial fraud cases had surged by 45% in just one year. Critically, he noted that 70% of the financial losses from these incidents were traced back to digital channels, with unregulated virtual asset platforms being a major conduit.
The CBN’s Financial Stability Report for 2024 further corroborated this sharp increase in fraud. The establishment of a specialized Compliance Department is therefore a clear strategy to build a more resilient defence against these evolving digital threats.
A Broader Regulatory Push for a More Secure Ecosystem
This new department is part of a wider, concerted effort by the CBN to modernize Nigeria’s financial system and bring it in line with global best practices. This initiative complements other recent directives, including:
The mandate for all payment system participants to migrate to the ISO 20022 global messaging standard.
The requirement for mandatory geo-tagging of all payment terminals (PoS machines) to enhance security and traceability.
These measures, taken together, signal a clear intent from the CBN to tighten regulatory loopholes, enhance transaction security, and build a more trustworthy financial ecosystem.
Directive to All Financial Institutions
As part of the new operational structure, the CBN has directed all regulated financial institutions—including banks, fintechs, and other payment service providers—to now channel all reports, correspondence, and inquiries related to the above-listed compliance areas directly to the Director of the Compliance Department.
The circular stated that this is a “strategic move to embed regulatory discipline and ensure robust oversight.” The CBN reaffirmed its commitment to working with all institutions to ensure a smooth transition and uphold the highest standards of regulatory compliance.
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