Why financial institutions based in Africa should have robust compliance systems in place

Alfred Pobi, Key Account Manager at Accuity, presented on the challenges facing African banks and the importance of having the right Anti Money Laundering (AML) system in place within those banks during the GIABA Commission (Inter-Governmental Action Group against Money Laundering in West Africa) at Praia, Cape Verde where 17 countries from Africa were represented.

The GIABA, is a specialized institution of the Economic Community of West African States (ECOWAS) which is responsible for strengthening the capacity of member states towards the prevention and control of money laundering and terrorist financing in the region.

The goal of this event is to evaluate what the member states have put in place in terms of AML / Counter Terrorist Financing (CTF) structures according to the FATF recommendations, and study the trends in the different countries; research for the best methodologies, and review vendors’ solutions to strengthen the prevention and control of Money Laundering and Terrorist Financing.

Some of the key challenges identified

Role of compliance officers:

In Western countries, compliance officers have important and crucial responsibilities and can influence the company’s strategy as they are usually part of the Board. Their responsibilities include identifying new requirements from regulatory bodies and ensure the company properly addresses these in order to remain compliant.

In Africa, compliance is mainly perceived as a cost centre instead of cost avoidance and compliance professionals struggle to overcome this perception. A lack of training was identified as the main concern for risk management among African entities.

African correspondent banks:

Western investors and banks are currently reducing the number of correspondent banks they interact with that are based in Africa. The most important issue for them when deciding whether to continue or cut relationships with correspondent banks is an entity’s ability to demonstrate that they have the right AML procedures and systems in place.

The world’s largest banks prefer to avoid and stop business relationships with institutions deemed AML deficient rather than associating themselves with their procedural and reputational risks. Unfortunately this trend has a very negative impact on the African economy which is dependent on those business relationships.


Accuity’s Alfred Pobi pointed out that Africa is undergoing a significant economic turnaround which is attracting a lot of foreign investment so it is important for local banks to have strong AML/CTF policies and systems in place to retain those investors, but also to help develop the local economy.

He added that they should meet the latest international standards while answering local African needs. It is vital for African-based financial institutions to screen existing and new customers, national and international payment transactions as well as product reports for internal and external use. They should also reinforce their KYC practices by accessing a comprehensive sanctions and Politically Exposed Persons (PEPs) database to make sure they are not doing business with counterparties yielding in unacceptable risk for the company. Learn more about how the notion of PEP in Africa differs from that in the West.

The member states were very receptive and underscored their needs to better address existing and emerging challenges to meet with the FATF requirements. The GIABA reviewed the AML/CTF structures and urged some member states to put the right systems in place and send their requests to technical/financial partners for such assistance.

As a platinum sponsor, Accuity will be presenting the above challenges at the upcoming ACCPA conference, held in Nairobi, Kenya on August 18-19, 2016 at the Ole Sereni Hotel.

For more information on the need for a pan-African sanctions lists, please visit here

For more information about the Future of compliance in Africa, please visit here

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