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TL;DR,

• The CBN compliance department launched in Q1 2025 addresses Nigeria’s 45% surge in fraud incidents and $2 million in flagged suspicious cryptocurrency transactions through specialized financial crime supervision.
• Nigeria’s Central Bank restructured its regulatory framework to tackle cybersecurity vulnerabilities and digital asset risks through dedicated compliance oversight across all financial institutions.
• CBN mandates ISO 20022 migration for all payment ecosystem participants while establishing proactive measures against sophisticated multichannel financial attacks.

The CBN compliance department is Nigeria’s next step in structuring better regulations for its evolving financial space. The region has made numerous steps from its Investments and Securities Act 2025, to acknowledging its native stablecoins. The department is a structured approach to understanding that traditional regulatory approaches no longer suffice in this new era.

An era where virtual assets break new grounds for cybersecurity concerns, and finance is the honeypot for illicit activities.

Inside the New CBN Compliance Department

The CBN compliance department, launched in the first quarter of 2025, was a foreshadowing of the region’s embrace of new technology. In Q2 2025, the department zeroed in on all banks, payment services and other institutions regulated under the BOFIA 2020. The main focus: providing proactive measures instead of reacting to compliance violations.

RELATED: Nigeria SEC: Stablecoin Rules to Empower Users and Protect Markets

Nigeria is Africa’s leading digital asset consumer and adopter. While this has garnered much praise, fraud incidents have surged by 45% year-over-year, with 70% of financial losses tracing back to digital channels.

Only recently did Nigeria flag over $2 million in suspicious transactions facilitated by cryptocurrency. The CBN compliance department answers this need through specialised oversight granted by the central bank.

The Central Bank of Nigeria has officially restructured the departments, focusing on preventing well-known risks like anti-money laundering.

This structural reform forms part of the Bank’s broader efforts to consolidate and embed regulatory effectiveness within existing supervisory frameworks, clarify institutional responsibilities, and maintain focused oversight of non-prudential and emerging risks.

Nigeria has newfound zeal in redefining its approach to digital assets regulation. The CBN compliance department’s main focus will revolve around several areas, including:

• Financial crime supervision – covering areas like anti-money laundering, counter-fiancing of terrorism, counter-proliferation financing, and sanctions compliance
• Market Conduct Supervision — covering disclosure practices, complaints management, and advertising standards
• Enterprise Security Supervision — including cybersecurity, data protection, and third-party risk management
• Corporate Governance and ESG Supervision — focusing on board effectiveness and environmental, social, and governance oversight

New Banking Regulations Tackle Cybersecurity Vulnerabilities Head-On

Blockchain technology and cryptocurrencies have transformed Nigeria’s financial ecosystem. Denying this truth has caused massive damage to its fiat currencies. Today, six out of ten Nigerian youths are interested in cryptocurrencies or blockchain technology. At least four actively participate in digital assets. The fiasco over Binance and the SEC is enough to showcase the impact digital assets represent.

Digital assets bring about a newfound approach to finance; however, current laws cannot keep up. Nigeria has steadily crafted new banking regulations, and the Compliance departments are a piece of the chessboard.

Incorporating blockchain will require most financial institutions to heavily rely on external technology providers. Outsourcing does offer a faster means of adoption, but it also presents numerous loopholes within security. Its approach extends beyond the standard compliance checklist with the added operational layers. The department acts as a separate regulatory entity, keenly dissecting what works and what doesn’t work.

Additionally, there is still the matter of leveraging AI, an aspect many organisations are embracing. Modern financial crimes have evolved into more sophisticated, multichannel attacks. CBN’s Financial Stability Report 2024, which greatly highlights upcoming technology, has presented new security challenges.

Furthermore, new CBN compliance reporting requirements specifically mandate that all future regulatory reports, correspondence, and inquiries related to these new areas will be handled by its Director.

How the CBN Compliance Department Changes the Game

CBN means business, issuing a directive that mandates all participants in the country’s payment ecosystems to complete migration to the ISO 20022 messaging standard. The region has caught the eye of global regulators with the IMF issuing warnings over the dangers of its current regulatory approach.

The pressure of aligning with global standards while also tailoring them to meet local needs is a task, and Nigeria is effectively tackling it one department at a time.

As per the publication, all Deposit Money Banks (DMBs), Microfinance Banks (MFBs), Mobile Money Operators (MMOs), Switching and Processing Companies, Payment Terminal Service Providers (PTSPs), Payment Solution Service Providers (PSSPs), Super Agents, and other licensed operators that ISO 20022 must adhere to the global benchmark for payments messaging.