Is Compliance an important aspect of Nigerian Remittances?
In any financial services institution nowadays, whether is a bank, a non-bank, fintechs, virtual currency providers, compliance and risk management are key. And not only in the CTF – Counter Terrorism Financing, which in Nigeria is a constant threat, and money laundering, another problem that no country in the world can claim to be free from, but also fraud, which sadly in Nigeria, is rampant. We all have received emails with fraudulent messages connected to Nigeria and other countries and it is surprising that still many people get tricked, especially in the US.
When discussing the Money Transfer Compliance Course in IMTC AFRICA’s Pre-Conference Day with the financial institutions in Nigeria that I visited in July this year, I felt that certain compliance actions taken in other countries, such as the U.S. Department of Justice against MoneyGram in November 2018 , where not totally understood. And in the remittance industry, the work on both side of a remittance corridor, between the sending and the paying institution, is critical. International money transfer compliance expert Zory Munoz, which will be instructor teaching the course in Lagos in September 24 is very aware of this fact: “I have lost count of the number of countries and institutions I have visited across the world and even if most of them are keenly aware of the importance of compliance, there are many gaps that need to be addressed, as we work together to develop better systems to control and manage risk”.
MTOs and other institutions that cater to the Nigerian Diaspora must get to know the Bank Verification Number or “BVN” Program in Nigeria that has placed the country as one of the top in the world with an advanced country-wide biometric system that began in 2014/ 2015. This is an advanced KYC system that certainly helps in providing reliable identification of remittance beneficiaries.
 In November 2018 the U.S. Department of Justice reported that MoneyGram had breached the provisions of its 2012 deferred prosecution agreement (DPA) and as a result of its compliance failures, it processed at least $125 million in additional consumer fraud transactions between April 2015 and October 2016 and hence it had agreed to forfeit US 125 Million. See http://bit.ly/2NkpmJ9 . The funds are earmarked to go to victims who lost money in the various fraudulent scams, such as lottery winnings, money left by a distant relative, “Nigerian prince” and other romance scams.