About nine years ago, I began a career in banking in a country where having a compliance culture was just another nice toy to have which never got used. Then, the apex regulator for the banking sector, while having regulatory compliance structures in place, could not boast of a robust framework, modelled after international best practice. However, the regulator was hard pressed to put something in place, especially as the Financial Action Task Force (FATF) had taken an interest in the country, when it had placed the nation on a watch-list three years before. While the regulator was trying its best to meet the FATF’s global standards or face further sanctions, the banks were still carrying on their “business as usual.” As for the employees within this sector, those that lived by personal ethical principles grumbled and hoped things would change. Some of us couldn’t stand to watch the un-ethical goings-on. Less than two years later, I left the banking sector. As part of the measures that were taken by the country in a bid to comply with the FATF, West Africa’s pioneer Financial Intelligence Unit was formed. Well, coincidentally, I found myself there. Here I was, an employee of a poorly regulated industry, going to work for a specialised government agency that was to work hand-in-hand with all financial sector regulators, especially from an anti-money laundering angle. I was ecstatic.
I was to spend close to six years at the Nigerian Financial Intelligence Unit (NFIU). During those years, I saw a weak regulatory framework become strong as Nigeria bowed to immense international pressure to comply with global standards. Today, Nigeria has the most robust AML/CFT framework in West Africa. As for the financial sector, they are better regulated than they used to be, with the new banking regulatory administration taking compliance and risk management to new heights, never before seen. However, has this guaranteed a secure financial sector? Is Nigeria immune to the type of sharp practices that recently saw the resignation of David Bagley of HSBC? The answer is NO.
I left the NFIU late last year. Today, I oversee regulatory compliance in a new bank. Having to ensure compliance with the regulations that I had a hand in reviewing and even developing has been far from easy, with the problems ranging from lack of understanding of compliance issues, poor man-power, and a constantly evolving regulatory compliance framework. However, I have to confess that the biggest problem is the fact that the industry is still used to their ways of non-compliance. They are finding it hard to wean habits developed over years of weak regulatory compliance, poor corporate governance structures, and unrealistic profit drives, amongst so many things. I thought having all the knowledge built over the years at the NFIU, coupled with my disdain for non-compliance, and the recent efforts by government to constantly review regulatory frameworks, would make things a walk in the park. I was so wrong. I seem to be nothing but a regulator in an unregulated world. I seem to be speaking a strange language in an industry that continues to play lip service to compliance. If I was to be asked to mention my top three compliant banks, I would have mentioned HSBC. With the recent events, would I be right?
Nigerian Banks are taking advantage of the deepening global financial market and have presence all over West Africa. Some of them are even in the UK and the US. This means that while they may escape stiff regulatory sanctions in Nigeria, they sure would not avoid same in the foreign jurisdictions they operate in. I am not stating that Nigerian banks are not regulated. However, alot needs to be done. Compliance needs to come naturally, not because of international pressure.
I have a mission to pursue the engendering of a sincere compliance culture in the Nigerian banking sector, while still cognisant of the need for profit in a very competitive industry. Will this regulator turned one of the regulated succeed. Time shall tell…
IbrahimComplies 