Onerous and stringent regulation changes in anti-money laundering laws is fuelling interest in regulatory technology (regtech) in countries around the world. At its heart, regtech is a range of innovative technologies built to address the regulatory hurdles faced by businesses of all sizes.
This type of technology can help banks, law firms, insurance companies, wealth and asset managers and others save significantly, not only in terms of hard cash but in time too, as fewer human resources are needed to complete mandatory checks and balances.
Regtech can assist with everything from risk management, compliance, transaction monitoring and even identity management by simplifying the Know Your Customer (KYC) process, which is a requirement of the Financial Intelligence Centre Act (Fica).
There is no doubt that software and digital solutions have forever changed how businesses manage their regulatory compliance in a range of ways.
Whenever the topic of compliance comes up, the first complaint is that complying with these regulations is an onerous and arduous task that hampers productivity, thanks to all the extra time and resources dedicated to this task.
It’s no surprise then that this is the top reason most businesses, irrespective of size, are compelled to start using an automated solution. With the right solution, these monotonous, repetitive tasks happen automatically and mountains of paperwork are taken out of the equation.
Consistency across the board
As a company grows, ensuring all employees are consistently adhering to the correct procedures grows increasingly complex. Companies spend an enormous amount of time formulating and implementing policies and procedures covering every aspect of the business.
Unfortunately, too many have no visibility into whether these policies and procedures are being adhered to. With the right software, the business can define, create and implement a range of policies and procedures that meet their specific needs.
According to the amended Fica Act, risk rating customers to determine the amount of due diligence that needs to be done is critical and needs to be carried out whenever a customer is onboarded, without fail. Organisations with a configured system in place that is already set up according to its unique business rules means that clients can be consistently onboarded with their risk rating considered.
Visibility at your fingertips
The days when companies needed to spend hours pulling various reports to get status updates are long over. A centralised software solution gives users dashboards that organise data, so more time can be spent on analysis.
To meet Fica requirements all clients must go through all the steps FICA requires, and a good software solution helps businesses have real visibility into which stage of onboarding clients are in.
Because compliance is such a mundane yet time-consuming task, it is inevitable that human error will creep in from time to time. For the most part, automation eliminates repetitive work and allows employees to focus on more value-added activities.
Regtech also enables and simplifies those tasks that were seen as practically impossible, and that put businesses at risk. Fica demands that: “Accountable Institutions must be able to determine whether they have a sanctioned person or entity as a client or whether a prospective client is a sanctioned person or entity in order to determine their exposure to TFS-related obligations.”
This means that any accountable Institution must be able to screen clients and prospective clients against the relevant sanctions’ lists, not only during the client-take-on process but on a continuous basis. However, there are frequent changes made to sanctions lists, and finding lists with the most up-to-date names can be tricky. It also takes hours for workers to manually screen and search each individual on a range of sanctions lists before onboarding them, which is why clever solutions have been created to ensure faster turnaround times with greater accuracy.
Staying abreast of regulations
The compliance and regulatory landscape is in a state of constant flux, and keeping up with these changes can seem nearly impossible. Just as a business thinks it’s finally on top of it all, so another regulation is signed into law, turning everything on its head.
Therefore, because it is a ‘living’ process, organisations must continually scan and keep abreast of changes in regulations and law. However, there are no excuses for falling foul of regulations, so businesses often hire specialists to take over this task.
This isn’t always affordable, so many businesses turn to leading software solutions that are always kept up to date. Not only does this ensure they remain compliant at all times, it levels the playing field and enables even small businesses to compete more effectively against their corporate counterparts.
Better for the customer
Finally, no one likes having to queue for hours with a large stack of documents to get their KYC completed. Onboarding should be as simple and pleasant as possible, and having a software solution that lets customers take pictures of their documents and then automatically uploads the documents for checking prevents lengthy email trails and mountains of paperwork.
This approach is far less hassle and is more effective in the long run.
In the end, there’s no doubt that having an automated software solution to help with compliance requirements has a list of compelling advantages that make it a no-brainer.
DocFox is an end-to-end software and services solution that enables you to be fully FICA-compliant. Our software has been built around the latest Financial Intelligence Centre Act and can be tailored for your specific industry. DocFox is trusted by hundreds of law firms, wealth and asset management companies and other accountable institutions around the globe. Visit us on Facebook, LinkedIn or Twitter.