Evaluation of Anti-Money Laundering Compliance Frameworks in Nigerian Deposit Money Banks

Anti-money laundering compliance is a critical obligation for Nigerian deposit money banks under the Money Laundering Prohibition Act 2011 as amended, and the effectiveness of compliance frameworks in deterring illicit financial flows requires systematic professional evaluation. This study evaluates the anti-money laundering compliance frameworks of deposit money banks in Nigeria, with a focus on compliance infrastructure, suspicious transaction reporting efficiency, and customer due diligence practices. A professional assessment design was adopted, using primary data from structured questionnaires administered to 120 compliance officers and anti-money laundering specialists from ten deposit money banks with national spread, and secondary data from the Nigerian Financial Intelligence Unit annual reports for the period 2018 to 2023. Anti-money laundering compliance effectiveness was measured by suspicious transaction report filing rates, customer due diligence completion rates, and frequency of regulatory sanctions. Multiple regression and descriptive analysis were employed. Results showed that banks with dedicated anti-money laundering technology platforms filed suspicious transaction reports at rates 64% higher than banks relying on manual processes. Customer due diligence completion rates averaged 83%, with enhanced due diligence for politically exposed persons averaging 71%. The study concludes that while Nigerian deposit money banks have made progress in anti-money laundering compliance, technology gaps and politically exposed person due diligence weaknesses remain. Mandatory transaction monitoring system certification for all deposit money banks is recommended.

Keywords: anti-money laundering, compliance, suspicious transaction reporting, deposit money banks, Nigerian Financial Intelligence Unit