5 Reasons why you should automate your FICA Process

There is no doubt that software and digital solutions have forever changed how businesses manage their regulatory compliance. The concept of digital transformation and Regulatory Technology (RegTech) innovation has long changed from being “a futuristic nice to have” to an enabler of existing procedures and processes and is now an essential component of any business.

But what is it that businesses are finding so useful and why have so many turned to software to assist with their regulatory compliance needs?

Increase in productivity

When discussing compliance, the number one complaint is that implementing compliance procedures and requirements are labour intensive across the business, therefore it negatively impacts productivity due to all the extra time and resources spent on compliance procedures.

It should also then come as no surprise that this is the number one reason why most businesses – small or large – are motivated to start using an automated solution. The benefit of using an automated solution means that repetitive tasks get completed automatically and mundane tasks (like collecting and filing mountains of paperwork) are removed.

In terms of FICA compliance, an example of this is no longer having to manually request nor send countless emails to collect and follow up on customers’ documentation for FICA purposes. Automated software enables you to load a customer with a specific entity type and takes care of emailing the customer to ask for the relevant forms and will send a follow up email when the incorrect or invalid documentation has been sent.

Standardise and enforce a single approach to ensure consistent policies and procedures

As a business grows, the task of ensuring everyone is consistently carrying out the correct procedure becomes more complex. The best software tools allow you to define, create and implement your policy and procedures according to your unique business needs.

According to the FIC Amendment Act, risk rating your customers, to ultimately determine the amount of due diligence to be done, is vital and should be consistently carried out whenever you onboard a customer. Having a configured system that is set up according to your business rules means that when onboarding a client, you are able to enforce that each client is risk rated and thus onboarded consistently across your business, according to your rules.

Have easy oversight at the click of a button

Gone are the days where businesses need to spend hours pulling various reports to get status updates. Using a centralised software solution means that businesses can use dashboards to organise data, so more time can be spent on data interpretation.

For example, in order to meet your FICA requirements, it is important to ensure that each client progresses through all the “FICA required steps”. So, in terms of better managing your client onboarding, when using a software solution you should be able to access a view that will allow you to easily see what stage of onboarding your clients are in. In terms of managing where your clients are at in the “FICA process” you could have a dashboard that shows you how many clients are in a “pending” stage as you wait for them to send their documents. You can also have a view to see if clients have appeared on any sanctions lists.

Eliminate human error and perform near impossible tasks

Let’s face it, compliance is often an onerous task and due to its monotonous nature, there is possibility for human error. Automation largely takes away the monotonous work and therefore enables staff to instead focus on decision making.

As per the FIC “ 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 implies that accountable institutions which are likely to meet sanctioned persons or entities are able to screen clients and prospective clients against the relevant sanctions lists. This should be done during the client-take-on process as well as subsequently as and when the UNSC adopts new TFS measures or expand existing ones.”

If recent times are anything to go by, there are frequent changes made to sanctions lists, and finding lists with the most up to date names can be challenging. A further consequence of this is that it takes hours for staff members to manually screen and search every individual on various sanctions lists before onboarding them, so there have been solutions created to ensure shorter turnaround times, with higher levels of accuracy, leading to improved and enhanced processes. In other words, just one example is using a software solution to automate your sanction, DPIP and FPPO screening so that staff no longer must spend hours searching sanctions lists. As a bonus software solutions can largely reduce risk more as they have the ability to enable algorithms that skillfully handle variations in names and spelling ensuring that nothing slips through the cracks.

Keep up to date with the latest regulatory requirements

Albeit frustrating and sometimes confusing, there is one guarantee when it comes to laws, compliance, and regulations and that is they will always be changing. Just as you think you have understood and successfully implemented procedures to meet compliance requirements, new laws and rules come into effect. It is therefore a continuous process that businesses should be scanning and looking out for changes in regulations and law. Being a “small business” is not an excuse for being non-compliant and law enforcers do not accept the excuse of “I was unaware or unintentionally breaking the law”.

Software solutions are often built around the latest requirements, so the best providers will have an in-house compliance team that ensures that the software is up to date with compliance regulations, meaning that you business can now rely on your software provider to keep you up to date with the latest regulatory requirements.

To conclude, having an automated software solution to assist you with your compliance requirements has many advantages such as enhancing customer experience, improving productivity, and eliminating inefficiencies. However, having a solution alone is not enough to eliminate the risk of non-compliance. Businesses should seek to partner with end-to-end solutions that will provide frequent training, guidance, support, and advice. Continually training and upskilling all your staff on software and compliance requirements plays a large role in how successful your business can be at using software to assist you in meeting all your compliance requirements.

CLICK HERE to enquire about automating your KYC process