The African Export-Import Bank (Afreximbank) is spearheading an initiative to enhance compliance in African trade by integrating artificial intelligence (AI) into financial and regulatory processes.
This push for AI-driven compliance aims to streamline operations, reduce the risk of financial crime, and foster greater intra-African trade.
Speaking at a recent high-level Afreximbank Compliance Forum in Dakar, Senegal, Idrissa Diop, Compliance Director at Afreximbank, emphasized the transformative potential of AI in the compliance sector. He noted that AI’s ability to swiftly analyze large volumes of data and detect anomalies could revolutionize how African financial institutions adhere to regulations, ensuring faster and more accurate reporting.
“Our goal is to make regulatory adherence more efficient and robust by leveraging AI technology. This will not only safeguard our financial systems but also create a more seamless trading environment across the continent,” he remarked in a chat with the B&FT.
By adopting AI, Afreximbank envisions a future where African businesses can navigate complex regulatory frameworks with ease, increasing trade volumes and boosting economic integration. The move is also seen as critical to combating financial crimes such as money laundering, which remain significant barriers to trade on the continent.
Afreximbank’s call for AI adoption aligns with its broader mission to promote intra-African trade and economic development by modernizing compliance and regulatory standards.
The conference, themed ‘Better Compliance, Better Trade’, brought together regulators, banks, and industry representatives to discuss the intersection of compliance and trade in Africa, there, Mr. Diop emphasized the need for a nuanced approach to implementing AI solutions in the African financial sector.
“We need to tropicalize it and make it adaptable or adapted to our environment, our regulation, the way the business is flowing from point A to point B,” he stated, addressing the challenges of applying foreign-developed technologies to African markets. He cautioned against the direct implementation of external solutions, noting, “We don’t want to also just go buy a technology outside and just come deploy it and it’s going to work or it’s going to give you results which are not relevant to you.”
The push for AI integration comes as several African nations grapple with their presence on the Financial Action Task Force (FATF) grey list. Notable economies such as Nigeria and South Africa remain on this list, which identifies countries with strategic deficiencies in their anti-money laundering and counter-terrorist financing (AML/CFT) regimes.
Addressing the grey list issue, Afreximbank’s compliance czar explained, “From inception, our economies were not properly framed to really protect themselves against the risk of money laundering, tax evasion, et cetera, which make the economy weak and submitted to some risk that when you look at it at the best practice point of view, make them join the grey list.”
The process of exiting the grey list is complex and time-consuming, involving multiple stakeholders and legislative changes. “You have the government pushing, you have the Parliament who has to change the regulation, and you don’t just overnight change a regulation like that,” Mr. Diop elaborated.
Afreximbank’s role in this process is primarily educational and facilitative. While the bank cannot directly remove countries from the grey list, it aims to create platforms for knowledge sharing and best practice dissemination. “We are organizing this kind of forum to sensitize people about the need of having good regulation, having good practices,” Mr. Diop said.
The bank sees a direct link between improved compliance and the successful implementation of the African Continental Free Trade Area (AfCFTA). He asserted, “Compliance will certainly help the AFCFTA to be more swiftly implemented.”
In a significant development, Mr. Diop revealed plans for the creation of an African Compliance Association. This body aims to bridge the gap between regulatory requirements and business needs, serving as an educational platform for compliance professionals across the continent. “We are going to acquire knowledge and we package it in such a form that we are disseminating it throughout the continent, then someone seated in Ghana will know what’s happening in Burundi and vice versa,” Mr. Diop explained, adding “What we don’t have today is that bridge between what the regulators want and what the business wants.”
The initiative reflects a growing recognition of the need for a pan-African approach to compliance issues. By creating a unified platform for knowledge sharing and implementation strategies, Afreximbank hopes to accelerate the adoption of best practices across diverse African markets.
The Afreximbank Compliance Forum
The Afreximbank Compliance Forum, which was organised in partnership with the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) was sponsored by some banks including Vista Bank, GCB Bank, Wave, Rawbank, SUNU Group and compliance system providers such as Lexus Nexis, Elucidate, Finanstra and Llyod’s List Intelligence, Consortix, and Vneuron.
The Forum focused on the Financial Action Task Force’s (FATF) requirements for identifying Ultimate Beneficial Owners (UBOs) and their far-reaching implications for trade facilitation. The FATF, an intergovernmental organisation, sets international standards to prevent money laundering, terrorist financing, and other threats to the integrity of the global financial system. One of its critical mandates is to identify and verify UBOs to ensure transparency and accountability in financial transactions.
Additionally, the Forum explored the transformative role of Artificial Intelligence (AI) in compliance processes, address strategies for African countries to make the necessary reforms to be removed from the FATF’s grey list and showcase the latest compliance technologies.
