The Central Bank of Nigeria (CBN) has issued a directive to banks, instructing them to obtain the social media handles of customers as part of enhanced Customer Due Diligence (CDD) regulations. The directive was included in the CBN Customer Due Diligence Regulation 2023, which was recently released via a circular signed by Mr. Chibuzor Efobi, the Director of the Financial Policy and Regulation Department at the CBN.
According to the regulation, financial institutions (FIs) are prohibited from establishing or maintaining anonymous accounts, numbered accounts, or accounts under fictitious names. The CDD measures outlined in the regulation must be implemented by FIs in various scenarios, including when establishing business relationships, conducting occasional transactions exceeding the designated threshold of US$1,000 or its equivalent in other currencies (as determined by the CBN), carrying out wire transfers (including cross-border and domestic transfers between FIs), and when credit or debit cards are used as a payment method for money transfers.
Also, the regulation emphasizes that CDD measures should be taken in cases where doubts arise regarding the accuracy or adequacy of previously obtained customer identification data, or when there is suspicion of money laundering (ML), terrorist financing (TF), and proliferation financing (PF), irrespective of any exemptions or thresholds mentioned in the regulations or the CBN Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and Counter Proliferation Financing (CPF) Regulations.
The inclusion of social media handles as part of the CDD process demonstrates the CBN’s commitment to staying abreast of technological advancements and leveraging digital platforms to enhance financial transparency and mitigate risks associated with financial crimes. By collecting social media handles, banks can gain additional insights into customers’ online presence and activities, contributing to a more comprehensive customer profile for risk assessment and fraud prevention.
This directive aligns with global efforts to combat financial crimes and adhere to international best practices in customer due diligence. It also highlights the growing importance of digital identities and online behavior in the context of financial transactions and regulatory compliance.
The CBN’s regulation serves as a reminder to banks and other financial institutions in Nigeria to strengthen their compliance frameworks and adopt robust measures to identify and manage potential risks associated with their customer base. It is expected that banks will promptly implement the directive and integrate the collection of social media handles into their customer onboarding processes.
As the financial landscape continues to evolve, regulatory bodies like the CBN play a crucial role in ensuring the integrity and stability of the banking sector. By enforcing CDD regulations and staying vigilant against financial crimes, the CBN aims to foster a secure and transparent financial ecosystem that protects the interests of customers and contributes to the overall economic growth of Nigeria.