FICA obligations present valuable opportunity

Electronic communication specialist, Striata, says the requirements set out in the Financial Intelligence Centre Act are just the opportunity that financial institutions need to overhaul their customer records.

With the intention of exposing money-laundering schemes and dubious bank account holder details, the Financial Intelligence Centre Act (FICA), has set a deadline of June 30 this year for account holders to verify their details in person at banks and investment companies. This includes providing identification, nationality, occupation and proof of physical address in a face-to-face appointment with the institution.

According to Alison Wright, managing director of Striata South Africa, "Although this is an arduous task for financial institutions, if approached correctly, it can result in immediate cost savings and long term efficiencies."

Wright emphasised that one of the greatest challenges faced by financial institutions is the lack of current information about their customers. In addition to the information required by FICA, Wright says this is an ideal opportunity for companies to update their records, specifically with information that will assist in communicating efficiently with each individual customer over the long term.

"Striata's core business is the provision of software and services that enable electronic communication. The cost savings and process efficiencies that are achieved through communicating electronically with customers can only be realised if the customers' electronic details and communication preferences are known to the organisation. The recording of customer email addresses, mobile phone numbers and fax numbers are vitally important."

"There are enormous cost savings to be achieved through email communication, electronic bill, statement and document delivery, and SMS notifications." Wright says that communicating with online and mobile enabled clients via email and SMS is growing exponentially, with benefits for both the organisation and the customer - especially as it allows for two-way interaction.

"Many financial institutions are still grappling with the process of gaining permission from customers to communicate with them electronically. Changing of mandates, and revision of for the process of new customer registration are two areas that the FICA requirement could indirectly assist."

Wright also sees this as an opportunity for marketers to find out more about their customer preferences. "It is no longer acceptable to mass-market to customers. Marketers need to build profiles around their customers' preferences and personal circumstances. These profiles are used to build marketing campaigns that are correctly targeted, resulting in a much higher success rate."

This is also a way for customers to notify their banks, unit trusts and life assurance companies, of their preferred method of communication. Wright notes, "Approximately 30% of the financial documents I receive each month, are now delivered to my email inbox, rather than my physical post box. I intend to use the opportunity when visiting each of my financial services suppliers, to give them a mandate to communicate electronically rather than via paper."

Confident about the impact of this Act on efficient communication, Wright comments, "This is an opportunity to achieve valuable process changes, including gathering of contact details, profiling of customer preferences, obtaining mandates and permissions for electronic communication as well as a chance for a face-to-face interaction with every customer."

Striata has set up a FICA Task Team to assist companies affected by this Act to evaluate and implement communication and technology options that will enable them to meet their obligations. The Task Team can be contacted here.