CBK ROLLS OUT REAL TIME SURVEILLANCE SYSTEM TO STRENGTHEN FIGHT AGAINST FINANCIAL CRIME

The Central Bank of Kenya (CBK) has gained real-time access to monitor customer transactions through its new “Granular Data Integration” system, significantly expanding its oversight capabilities. This system allows the CBK to track transactions across the entire banking sector, including RTGS, PesaLink, and mobile money platforms, enhancing its ability to monitor activity and identify potential risks.

This development is part of Kenya’s broader efforts to strengthen its financial monitoring systems after the Financial Action Task Force (FATF) placed the country on its grey list in February of the previous year due to concerns over weak controls against money laundering and terrorism financing. According to CBK’s annual Bank Supervision Report, Kenya has committed at a high level to addressing the gaps in its Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) framework, as outlined in a tailored action plan developed by FATF in collaboration with Kenyan authorities.

The action plan includes measures to improve the effectiveness of Kenya’s AML/CFT/CPF systems. Some of these measures involve reviewing the risk profiles of financial institutions licensed by the CBK, incorporating findings from the updated national risk assessment of 2023.

Additionally, the government is working on drafting the Virtual Assets Service Providers (VASPs) Bill of 2025, which will set out licensing requirements, market entry controls, and monitoring guidelines for Virtual Asset Service Providers. Once enacted, this bill will require VASPs to be licensed and adhere to the Proceeds of Crime and Anti-Money Laundering Act. It also designates the CBK and the Capital Markets Authority as the primary regulatory bodies for VASPs, with clear responsibilities for overseeing their activities.

In a further effort to combat illicit financial flows, CBK has partnered with the UK Treasury to enhance checks in non-bank institutions, aiming to tackle illegal cash flows and help Kenya exit the FATF grey list. The government has also introduced a requirement to conduct parallel terrorism-financing investigations for every terrorism case, addressing concerns from the global watchdog. This means that every terrorism suspect arrested will now also be subject to an investigation into potential financing links.