In Eastern and Southern Africa, banks and virtual asset service providers (VASPs) have converged on a set of anti‑money‑laundering controls – risk‑based customer due diligence, tiered onboarding, transaction monitoring that flags anomalies, and escalation to dedicated financial crime units. However, they do so in isolation, with no structured mechanism to compare notes.
This lack of connectivity is the region’s most significant unaddressed AML vulnerability, according to Chanal Subramoney, Group Senior Compliance Manager at Yellow Card. The gap is not a shortage of individual compliance effort; it is a missing shared platform for information exchange.
Sub‑Saharan Africa’s average remittance cost sits at about 7.9%, more than double the United Nations’ Sustainable Development Goal target of 3%. Much of that cost is driven by compliance friction passed down a shrinking correspondent banking network, where the top twenty correspondent banks handle roughly 80% of global cross‑border payment value. Banks withdraw from relationships they judge to carry uncertain regulatory expectations and disproportionate compliance cost, especially affecting African, Pacific Island, and Caribbean institutions.
Regulation has not closed this gap. FATF’s latest update found that 83% of surveyed jurisdictions have enacted Travel Rule legislation, up from 73% a year earlier, yet most struggle to convert that legislation into effective supervision and to identify which entities conduct VASP activity.
During ESAAMLG’s ninth Public‑Private Sector Dialogue in Kigali in September 2026, a panel on electronic Know‑Your‑Customer and Transaction Monitoring brought together compliance leaders from Commercial Bank of Mauritius, BPR Bank Rwanda Plc, and Yellow Card. Subramoney discovered that the controls described by the two banks and Yellow Card were nearly identical, yet none had coordinated with the others.
Without a lawful, structured channel, a single illicit flow that moves through a bank account, into a VASP wallet, and back through a second bank passes through three competent compliance programmes, each seeing only part of the pattern. The result is broader caution that disproportionately affects ordinary, low‑value activity such as remittances and savings deposits, the majority of financial inclusion use cases in the region.
Regulators already see industry readiness to move. Since the Kigali dialogue, ESAAMLG has invited continued engagement from Yellow Card on awareness and training, and several national financial intelligence units have approached the company for input on drafting virtual asset regulation.
The recommendation is clear: regulators, including central banks, financial intelligence units, and regional standard‑setters such as ESAAMLG, should convene and build a shared, cross‑sector, cross‑border compliance information‑sharing mechanism. This platform would allow licensed banks and VASPs to support joint investigations, calibrate risk‑based monitoring collectively, and align emerging Travel Rule data standards with the operational reality of institutions at different levels of technical maturity.
Regulators are best positioned to set the legal basis, data protection safeguards, and participation rules for such a mechanism. Industry has already shown it can converge on compatible control design; it is ready to help build the connective layer quickly once regulators take the lead.
