Keep FICA compliance gremlins at bay with BPM

In 2001, South Africa brought itself in line with international standards in the fight against crime when it implemented the Financial Intelligence Centre Act, 38. As a legal framework, FICA is designed to effectively combat money laundering; to prevent criminals from being able to integrate their ill-begotten gains into credible banking systems. Therefore, sections 21 and 22 of the act require South African banks to ensure they have correct details for all their customers through the verification of customer details.

Despite many attempts to encourage people to bring the necessary documents to the banks before the FICA deadline, most South Africans only rushed out after the deadline had been finally extended. Needless to say, chaos and confusion became the order of the day; and even now, months after the deadline has come and gone, people and banks alike are still suffering in the aftermath.

FICA requires the banks to verify customers through the collection of information such as age, income, place of employment, language and contact details. They also need proof-of-residence documents and income tax numbers where applicable. The result was initially millions of people flocking to the banks to throw reams of paper at them. Once the banks were in possession of the information, a note would be put on their banking systems to indicate that the documents had indeed been received and forwarded to the FICA centre. If anyone does not comply with the Act, their account is frozen and they will only have access to that account and their money once they are compliant.

The problem is, with so much paper and information being handed in to the banks, and moved from the thousands of branches nationwide to the FICA centre, documents and information are bound to go missing; and it has already been the unfortunate experience of many to discover their accounts frozen because they have not apparently not complied with FICA when in fact they had.

Banking is a risky and challenging endeavour at the best of times, for both the banking institutions and customers, and the pressures of FICA compliance can be a compounding factor unless banks embrace business process management (BPM) technology and methodologies and implement these across their operations effectively.

Having disparate or inefficient business processes to manage the millions of customers interacting with their banks for FICA compliance purposes or general banking, places a bank at unnecessarily high risk of processing redundant and erroneous customer data. This not only negates the entire FICA effort but also makes customer relationship management and service efficiency nearly impossible.

However, having an automated, Web-based business process management solution that integrates with existing database platforms can help banks prevent further problems relating to data management arising from FICA compliance, and improve all the services available to their clients.

BPM allows banks to automate, control and improve their critical human and system-based business processes, system communications and human collaboration by creating a single process layer across multiple systems, databases and people and closing any gaps that can create process inefficiencies, such as those magically disappearing FICA documents.

Effective BPM impacts on the most critical business processes in banking institutions, making them more efficient, more controlled and more agile. All of this impacts directly and positively on cost, productivity, response times, visibility, profitability and compliance.

With BPM in place, banks can better model processes; automate processes based on this model; and take advantage of business rule engines, workflow and high-performance integration technologies to create a seamless, efficient process layer across multiple people, applications and databases.

They can participate in, manage and monitor processes through intuitive dashboard interfaces; report and analyse a process based on live process data to identify potential issues or areas for improvement; simulate and model process changes based on real process data drawn from the process database; perform what-if analyses and predict trends based on past process performance; and determine what process changes will have the most positive impact and then apply them to the actual process.

And all of this would improve the ability of banks to ensure compliance to regulations such as FICA, prevent banks and clients suffering from inefficiencies in banking processes and generally improve their service offerings to customers.

With effective BPM there would really be no need for heated conversations between the bank and its customer about why the information delivered is no longer in the bank`s possession. BPM keeps the bank on track and, ultimately, the client compliant and happy.