FICA (the Financial Intelligence Centre Act, 31 of 2001) and the crimes in the financial sector addressed in the Act, are both topics close to Daniel Burke’s heart. Daniel is a specialist in Risk and Compliance at Thomson Reuters for Sub-Saharan Africa.
FICA came into effect on 1 July 2003 in South Africa. This Act aims to prevent crimes in the financial sector, for example money laundering, tax evasion, identity theft, and financial transactions that aid and abet terrorist activities.
All financial institutions, as well as businesses who provide credit facilities in the form of assets (such as a house or a car), retail items (such as cell phone or data contracts, appliance or clothing accounts), or cash amounts (such as a personal loan or short-term loan) need to comply with the regulations set out in FICA as a pro-active measure, to prevent such crimes from occurring.
Control measures involving the criminalisation of money laundering activities are some of FICA’s main concerns. As such, the three basic principles of the detection and investigation of money laundering activities are the following:
- Intermediaries in the financial system must know with whom they are doing business
- The paper trail (and, in today’s times, digital trail) of transactions through the financial system of lending institutions must be recorded and preserved.
- Any possible money laundering transactions must be brought to the attention of the Financial Intelligence Centre and the investigating authorities.
For consumers, companies, closed corporations, and partnerships; this means that the growing, interconnected network of relationships within a business, already a complex and dynamic structure, is potentially a high risk environment. As businesses grow, their supply chains grow in size and complexity, making it difficult to retain transparency in terms of truly knowing who the third parties are, and with which you are actually doing business. This, in turn, has the potential to cause lapses in regulatory compliance, as well as causing dissatisfaction amongst shareholders and clients who demand responsible corporate behaviour.
In the international arena, the risk caused by this network of third parties has created great sensitivity in both the public and private sectors. There has been a particular focus of attention on preventing bribery and corruption, financial crimes and sanctions, slavery and human abuse, conflict minerals (such as blood diamonds), and environmental crime.
On a global scale, many companies now offer extensive third party risk management, including screening potential clients and suppliers by collecting, analysing and compiling data on various individuals and companies.
In South Africa, Compuscan is at the forefront of developing such products. Our information and credit services division not only compiles and analyses the most comprehensive set of consumer and commercial data in Africa, and globally, it has tailor-made certain products to specifically cater to the financial intelligence compliance of the countries in which we operate as well. Some of our products that enable South African businesses to be FICA compliant include Account Verification Services, Person Status Services, and Person verification service
Compuscan’s Account Verification Services enable businesses to verify the banking details of both consumers and businesses. This simplified and streamlined verification processing system is hosted on a secure web interface, minimising ID theft for the consumer, reducing debit order rejections at various participating banks, and assisting in the prevention of fraud. Our clients will request an AVS on a business or an individual, and we will send the requested information with corresponding bank account numbers to the relevant banks. The information is processed to return a result confirming:
- The account holder’s name or business name
- An individual’s ID number or a business registration number
- The bank account number
- The bank branch code
- The account status (open or closed)
- Whether the bank account has been active or open for more than three months
- The account type
- Whether the account accepts both debits and credits
Results of the AVS can be submitted and returned in batch format, which usually takes three to four hours. However, results of AVS-R (Account Verification Services Real-Time) allow for verification in as little as 30 seconds.
Our Person Verification Services enable the accurate identification of an individual in real-time (i.e. in milliseconds), using their credit information which we have stored on our vast database. This instant and accurate identification not only minimises fraud, it also streamlines internal processes. Compuscan has made PVS unique, in that clients can create and implement their own rules to manage their risk of possible phishing attacks, or illegal attempts to access personal information.
In addition to products that we offer for businesses to be compliant with FICA, we also offer a fantastic solution for individuals to view their credit information. We provide millions of consumers with secure, online access to their credit history and score, via our online My Credit Check services. We empower people to manage and improve their financial status, and also help them to protect themselves against fraud and identity theft. We even educate individuals about their debt and financial wellbeing in an easy-to-understand and fun manner, via our MyCC blog posts.
If you’d like to find out more about FICA compliance and the risk associated with crimes in the financial sector, book your place at the Credit and Decision Analytics Conference from 6-8 September 2017, where Daniel Burke will expand on the topic!
Visit www.2017cada.com more information, and remember to search for us on social media under the hashtag #2017CADA.