The Prudential Authority (PA) has imposed administrative sanctions on Discovery Bank, as a result of its non-compliance with certain provisions of the Financial Intelligence Centre (FIC) Act, following an inspection conducted in 2021.
According to a statement, the administrative sanctions imposed on the digital bank follow four transgressions, which led to non-compliance, and a financial penalty totalling R3 million, of which R1 million is conditionally suspended for 36 months from 9 July 2025.
“Discovery Bank failed to comply with section 29, read with section 42 of the FIC Act and Regulation 24(3) of the FIC Act Regulations, in that it failed to timeously report 24 suspicious and unusual transaction reports or suspicious and unusual activity reports to the Financial Intelligence Centre,” notes the PA in a statement.
“The PA imposed a caution not to repeat the conduct which led to the non-compliance and a financial penalty of R1 million, of which R500 000 is conditionally suspended for 36 months.”
Secondly, Discovery Bank, according to the PA, failed to comply with section 43 of the FIC Act, as it failed to provide training as prescribed by its Risk Management and Compliance Programme (RMCP) in that:
- 84 out of 155 of its new employees had not received training within 30 days of being appointed.
- 47 out of 109 of its employees had not received annual refresher training within a period of a year.
- Two out of six of its senior management had not received training within 30 days of being appointed.
The PA imposed a caution not to repeat the conduct which led to the non-compliance and a financial penalty of R1 million.
“Thirdly, Discovery Bank failed to comply with the FIC Act Directive 5/2019, in that it had failed to timeously attend to 2 281 of its automated transaction monitoring system alerts within the prescribed period of 48 hours. The PA imposed a caution not to repeat the conduct that led to the non-compliance and a financial penalty of R1 million, of which R500 000 is conditionally suspended for 36 months.”
The fourth transgression, according to the PA, is that Discovery Bank failed to comply with section 42 of the FIC Act, in that it failed to:
- Provide evidence that it had documented the step-by-step working method/s and/or listed the trigger events that would require the bank to review its RMCP.
- Align its RMCP to define a business day for the purposes of identifying cash transactions to be reported in terms of section 28 read with section 42 of the FIC Act.
The PA imposed a caution not to repeat the conduct which led to the non-compliance.
“Discovery Bank has cooperated with the PA to undertake the remedial action required to address the identified compliance deficiencies and control weaknesses,” it says.
The digital bank now has 1.25 million clients and became profitable for the first time in the second half of the 2025 financial year, after launching in 2021.
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