Consumers Should Work Together with Banks to Help Combat Financial Crime

Consumers should be commended for their increasing cooperation with their banks when providing their latest and most accurate information in order to comply with the Financial Intelligence Centre Act (FICA); however there are still those who need to validate their bank accounts.

Eric Enslin, CEO of FNB Private Wealth and RMB Private Bank says that while FICA may be viewed as unnecessary administration by some consumers; FICA is in fact an essential piece of legislation that has been established to safeguard consumers and the country against financial crimes, such as money laundering and terrorist financing activities.

Enslin says whilst these financial crimes may not necessarily have an immediate impact on individuals, they do affect us in the long term. For example, money laundering is often used to fund illegal conduct, leading to an increase in criminal activities which would have a direct impact on society.

“It is essential that banks and their customers work together to ensure FICA compliance in order to combat the increasing spate of fraud, as well as money laundering activities which have negative consequences for the economy,” says Enslin. He adds that individuals can be more proactive regarding FICA by fulfilling the following compliance requirements:

  • If an existing customer wishes to take up a new product or service, the bank must first verify the customer’s details.
  • Any person who wants to open a new bank account is required to provide the relevant documentation to validate their information when opening the bank account.
  • Banks are required to hold the latest and most accurate information about all their customers in order to comply with the requirements of FICA.  Should the documentation and information in the position of the bank be illegible, incomplete or not verified, the customer will be required to re-submit FICA documentation.
  • Individuals who own businesses are required to FICA their business accounts separately as the documentation requirements in terms of the Act are not the same.

Individuals are required to produce their green bar coded ID book or new Smart ID card, as well as an acceptable proof of address (i.e. rates and taxes or utilities account/bill less than three months old) to be FICA compliant.

People should also be aware that FICA is not a once-off event. Banks and the broader financial services sector regularly review their compliance with FICA and Know-Your-Customer (KYC) regulations in order to verify their customers’ sources of income and funds. This can only be achieved through collaboration with customers.

“We urge consumers who have been notified of FICA non-compliance to provide their banks with all outstanding information and documentation on time. This will prevent the freezing of accounts being carried out as a last resort,” concludes Enslin.