On February 2023, the Financial Action Task Force (FATF) added Nigeria and South Africa to its global grey list, signalling deficiencies in addressing illicit financial flows. This decision adversely affects their international reputations and could increase costs for banks and asset managers. Conversely, Morocco and Cambodia were removed from the list after enhancing their controls.
During a conversation with Nairametrics on the sidelines of a meeting involving representatives from Nigerian banks and fintech, Chrisol Correia, our Chief Strategy Officer highlighted the significant pressure faced by financial institutions in Nigeria due to the greylisting by the global financial crime community. Although Nigerian banks have previously invested in people and compliance technologies, he emphasised the need for continuous deployment of the latest technologies due to the changing pace of financial crimes and technologies.
He also observed that competition from fintech may have compelled banks to relax certain compliance practices to retain customers. He explained that fintechs lack the traditional compliance experience of banks, exposing them to higher risks compared to banks. For more information, please read the full article.