Why FICA Compliance is crucial for the Real Estate Industry’s future

• The critical role of Property Practitioners in combating Financial Crime
  Property practitioners help prevent money laundering and financial crimes by complying with FICA, safeguarding their business and the industry.
• The financial risks of non-compliance with FICA
  Non-compliance with FICA can result in fines up to R50 million, damaging reputation and risking severe legal and financial consequences.
• Integrating Technology for efficient FICA Compliance
  Using technologies like nCino KYC automates compliance processes, reducing paperwork and ensuring businesses meet high standards while preventing criminal exploitation.

Did you know that criminals often use estate agents to launder money, which can have severe implications for you and your business?

With a staggering 2 - 5% of global GDP, equivalent to around $800 billion - $2 trillion, being laundered annually, the imperative for robust anti-money laundering and counter terrorist/proliferation financing control measures cannot be overstated, particularly in the wake of the country’s greylisting.

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Since its inception in 2001, the Financial Intelligence Centre Act (FICA) has been synonymous with compliance challenges and seemingly endless documentation. Many property practitioners fulfil their FICA requirements with reluctance, if at all, while their clients find the frequent need to verify their identity burdensome.

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The rationale behind FICA is compelling, as property practitioners play a vital role in identifying the proceeds of money laundering, terrorist/proliferation financing and tax evasion, along with uncovering the individuals behind these activities. Money launderers and other criminals tend to exploit the buying, selling, and renting of property to launder illicit funds.

South Africa’s greylisting by the Financial Action Task Force in 2023 highlights the ongoing challenges we face in controlling financial crime.

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The government cannot solely be blamed for South Africa’s deficiencies. While resources in our regulators, law enforcement and prosecuting authorities are stretched, the private sector must also be held accountable. Companies serve as the front-line defence against South Africa being seen as a hotspot for financial crime.

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Due Diligence and Compliance Challenges for Property Practitioners
FICA aims to ensure that Accountable Institutions (AI's), such as property practitioners, have sufficient and accurate knowledge of their clients’ true identities, source of funds and motivations, empowering them to alert authorities about any suspicious activities or transactions.

Without information from the people who are confronted with criminals’ attempts to clean dirty money, authorities have nothing to base their investigations on.

Yet for many industries, compliance remains a tremendous challenge. Legal practitioners and property practitioners are two categories of AIs that have been consistently declared non-compliant.

According to the Financial Intelligence Centre (FIC), approximately 80% of law firms fail to adhere to FICA requirements. Non-compliance carries significant consequences, including reprimands and fines of up to R50 million for entities.

Embracing the Future of FICA Compliance

To win the fight against financial crime, human intelligence and technology must work together effectively and progressively.
This means that in addition to having the appropriate smart technology, you need to have a compliance partner you can rely on for advice, insights, trends and industry know-how.

This is where nCino KYC comes in.

nCino KYC, formerly known as DocFox, is committed to enhancing your business’ FICA compliance processes through an offering that is easy on your business and clients, and frustrating for criminals.

Navigating FICA compliance can be complex, but you don’t have to do it alone. With the global innovation of nCino and our local expertise, we offer smarter, more efficient ways to conduct Know Your Client (KYC) checks. Our solutions simplify the verification process, reducing paperwork while ensuring you meet the highest standards.

Contact us today to learn more about the smartest, fastest way to perform KYC.

nCino KYC can automate your FICA process - Request a demo today.

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