The African Export-Import Bank (Afreximbank) is leading an initiative to enhance compliance across African trade by incorporating artificial intelligence (AI) into financial and regulatory frameworks.
This innovative approach aims to streamline operations, mitigate the risk of financial crime, and promote intra-African trade.
At a recent high-level Compliance Forum held in Dakar, Senegal, Afreximbank’s Compliance Director, Idrissa Diop, spoke about AI’s transformative potential within the compliance sector. He highlighted how AI can rapidly analyze vast datasets and identify irregularities, thereby revolutionizing regulatory adherence among African financial institutions for quicker and more precise 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 embracing AI, Afreximbank envisions a future where African businesses can more easily navigate complex regulatory landscapes, resulting in increased trade volumes and deeper economic integration. This initiative is crucial in combating financial crimes, including money laundering, which continue to hinder trade across Africa.
Afreximbank’s push for AI adoption aligns with its overarching mission to foster intra-African trade and promote economic development by modernizing compliance and regulatory standards.
The forum, themed “Better Compliance, Better Trade,” gathered regulators, banking officials, and industry leaders to explore the nexus between compliance and trade in Africa.
During the event, Diop stressed the importance of tailoring AI solutions to fit the unique regulatory and business environments of African markets.
“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.”
his call for AI integration comes as several African nations face challenges associated with their presence on the Financial Action Task Force (FATF) grey list, with significant economies such as Nigeria and South Africa among those affected. Diop explained, “Historically, our economies were not structured to effectively guard against risks like money laundering and tax evasion, which have weakened our economies and contributed to their placement on the grey list.”
Navigating the path to exit the grey list is complex and requires the collaboration of various stakeholders and legislative amendments. “It involves government action and parliamentary changes; regulatory adjustments cannot be made overnight,” Diop elaborated.
While Afreximbank cannot directly remove countries from the grey list, it plays an essential educational and facilitative role, aiming to create platforms for sharing knowledge and best practices. “Through forums like this, we aim to raise awareness about the importance of robust regulations and practices,” Diop emphasized.
The bank believes that enhanced compliance is directly linked to the effective implementation of the African Continental Free Trade Area (AfCFTA). Diop asserted, “Improved compliance will certainly expedite the implementation of the AfCFTA.”
In a noteworthy announcement, Diop revealed plans to establish an African Compliance Association. This organization aims to bridge the gap between regulatory requirements and business needs, serving as an educational resource for compliance professionals across the continent. “Our goal is to gather knowledge and disseminate it continent-wide, ensuring that a person in Ghana is aware of developments in Burundi, and vice versa,” he said, underscoring the current lack of communication between regulators and businesses.
The initiative reflects a growing acknowledgment of the necessity for a unified pan-African strategy to tackle compliance challenges. By creating a collaborative platform for sharing insights and strategies, Afreximbank aims to accelerate the adoption of best practices across various African markets.
About the Afreximbank Compliance Forum
The Afreximbank Compliance Forum, organized in collaboration with the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), received sponsorship from several banks, including Vista Bank, GCB Bank, Wave, Rawbank, SUNU Group, and compliance system providers like LexisNexis, Elucidate, Finastra, Lloyd’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 discussed their implications for trade facilitation. As an intergovernmental organization, the FATF sets international standards to prevent money laundering, terrorist financing, and threats to the integrity of the global financial system, emphasizing the need for transparency in financial transactions.
Additionally, the forum addressed the crucial role of AI in compliance processes, discussed strategies for African nations to reform and remove themselves from the FATF’s grey list, and showcased the latest compliance technologies.