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New regtech start-up looks to ease SA’s greylisting woes

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 21 Jun 2024
Frank Leonette, founder of GloRep.
Frank Leonette, founder of GloRep.

Crypto-currency expert Frank Leonette has established GloRep − a new regulatory technology (regtech) start-up, with a focus on tackling South Africa’s greylisting issues.

He tells ITWeb that GloRep launched in beta phase on 1 June and will be fully available to the public in early July.

Regtech is the application of emerging technologies to improve the way businesses manage regulatory compliance.

“GloRep provides a compliance suite with integrated biometrics that enables companies and corporations to manage their compliance obligations seamlessly in a digital environment, through rapid customer onboarding and monitoring,” he says.

Before starting his own company, Leonette was involved in SA’s fledging crypto-currency market.

Commenting on the reasons for establishing GloRep, he says the Financial Intelligence Centre (FIC) of South Africa has mandated that companies in certain financial sectors become accountable institutions and adopt anti-money-laundering and counter financing of terrorism (AML/CFT) policies and practices documented in the FIC Act.

According to Leonette, financial intelligence units around the world have implemented similar requirements.

“The biggest obstacle to compliance is that many companies underestimate the level of compliance required to fulfil FIC requirements.

“These obligations can be costly and time-consuming, and require knowledgeable employees. GloRep alleviates additional staffing and streamlines compliance in an organisation.

“Our platform facilitates drag-and-drop workflows that enable businesses to accommodate various customer onboarding strategies. Customers can now be onboarded in under a minute, saving businesses operation staffing costs.”

The platform provides Department of Home Affairs data verification, as well as direct goAML integration, allowing FIC reports to be submitted instantly with minimal user interaction, says Leonette. It also accommodates a full API and web hook stack that can facilitate any third-party application integration.

Leonette points out that companies need to understand their compliance obligations. “Recently, Ashburton Fund Managers were slapped with an R16 million fine for failing to abide by the Financial Intelligence Centre Act. GloRep will mitigate these nasty surprises, which will contribute to the alleviation of South Africa greylisting.”

Registration with the FIC is a regulatory obligation in terms of the FIC Act. “If your business or sector is listed in Schedule 1 of the FIC Act, then you are required to register with the FIC. Registration with the FIC is the first step to enable accountable institutions to submit regulatory reports and fulfil other FIC Act compliance obligations.”

Leonette explains that section 43B of the FIC Act requires accountable institutions to be registered with the FIC.

“Such registration includes providing the FIC with the details of the compliance officer and the institution’s information. The failure to register with the FIC or update registration information when it has changed are offences and may result in a fine not exceeding R10 million.”

It has been over a year since the Financial Action Task Force, the global watchdog, placed South Africa on its grey list for not meeting international standards in anti-money-laundering, combating the financing of terrorism and proliferation financing.

The greylisting signals to the international community that the country has deficiencies in its AML/CFT measures. This can harm the country’s reputation and diminish investor confidence. It serves as a wake-up call for countries to strengthen their financial systems.

GloRep will compete against companies such as SumSub, Persona and Trulio in the South African market.

“Our go-to-market strategy will be social media and media outlets. Mostly, we are confident the product will speak for itself and word of mouth will be our primary form of marketing. We plan to do campaign launches around the product that will create awareness, coupled with strategic partnerships.

“GloRep will compete with larger international players on features and price. We intend to focus on a multi-jurisdiction compliance solution in the coming months. We have a team of developers and compliance experts who are dedicated and constantly improving our products,” Leonette concludes.