Rethinking risk: Responsible citizenship, FIC Act compliance, the power of VeriX

Rethinking risk: Responsible citizenship, FIC Act compliance, the power of VeriX.

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In South Africa, the Financial Intelligence Centre Act (FIC Act) serves as a cornerstone in the fight against financial crime. Its rigorous compliance requirements – aimed at preventing money laundering, terrorist financing and other illicit financial activities – place a significant responsibility on accountable institutions. From banks and insurers to fintech start-ups and property practitioners, each organisation plays a pivotal role in protecting the country’s financial infrastructure. This responsibility transcends regulatory adherence; it is a central expression of responsible citizenship.

While government agencies set the tone, the task of upholding financial integrity is shared broadly across sectors. Conducting thorough know your customer (KYC) protocols and anti-money laundering/counter-terrorism financing (AML/CTF) screenings are more than tick-box exercises. These practices represent an unwavering commitment to safeguarding the country’s economic systems and reputations on both national and international levels.

This sense of shared accountability is reinforced by the global attention brought on South Africa following its greylisting in early 2023. For institutions, compliance with the measures outlined in the FIC Act is no longer optional – it is a critical component of their operations and reputations.

Despite the importance of FIC Act adherence, many organisations face significant hurdles, including regulatory uncertainty, fragmented data systems and resource constraints. These challenges are underscored by the FIC's enforcement statistics following South Africa’s greylisting by FATF. In 2022/23, the FIC conducted 946 inspections, finding 79% of legal entities non-compliant. By 2023/24, 558 inspections took place, revealing widespread gaps, including 191 institutions failing compliance linked to missing risk and compliance returns (RCRs). The FIC imposed fines ranging from R10 000 to R50 000 on 286 businesses, with 145 firms failing to both submit returns and pay penalties. Furthermore, implementation challenges include:

1. Regulatory evolution: The FIC Act’s amendments aim to align South Africa’s financial systems with global standards set by the Financial Action Task Force (FATF). These advancements, although necessary, introduce ongoing uncertainty for institutions attempting to stay compliant.
2. Data gaps and fragmentation: Effective KYC and AML screenings require consolidated access to internal and external data sources. Fragmented or incomplete data systems hinder reliable risk assessment.
3. Resource constraints: Many organisations, particularly smaller ones, lack the capacity or expertise to build and maintain robust compliance frameworks.
4. Risk-based models: Risk rating systems must balance adaptability, auditability and accuracy. Achieving this simultaneously can be an overwhelming task for many organisations.
5. Customer experience vs compliance: Overly stringent screening protocols could lead to onboarding complications, reputational fallout and lost business opportunities.
6. Continuous monitoring: FIC Act compliance does not stop once a client is onboarded. Institutions need ongoing surveillance to detect changes in customer risk profiles, sanctions exposure or suspicious activity.

These compliance challenges, though daunting, are opportunities to explore cutting-edge solutions for smarter financial risk management.

VeriX, powered by XTND, introduces a new standard for intelligent risk management and AML/CTF compliance. Designed as an enhancement of XTND’s flagship Veritas platform, VeriX simplifies FIC Act adherence by fusing automation, artificial intelligence and configurability.

Key features of VeriX

• Automated screening: Instantly screens national and international sanctions lists, politically exposed persons (PEPs) and adverse media reports.
• Dynamic risk scoring: Adjusts risk profiles in real-time using behavioural, transactional and contextual data for precise assessments.
• Targeted financial sanctions compliance: Provides continuous monitoring and alert systems for interactions with sanctioned entities.
• Customisable and audit-ready: Configurable to fit sector-specific compliance needs and reporting standards, ensuring alignment with unique organisational risk appetites.

VeriX transforms compliance from a burdensome obligation into a seamless process. By automating key tasks and delivering accurate risk insights, it enables institutions to shift from reactive risk management to proactive stewardship – all while enhancing operational efficiency and preserving customer trust.

South Africa’s financial institutions stand at a critical juncture. With the heightened pressure from regulatory bodies and global scrutiny following greylisting, the stakes are higher than ever. However, this moment presents an opportunity for innovation and shared commitment.

Tools like VeriX enable institutions to turn compliance into a competitive advantage while deepening their role as responsible corporate citizens. This approach doesn’t only align with legal mandates – it reflects a broader commitment to a safer, more transparent financial ecosystem.

Financial integrity relies not just on robust regulatory frameworks but on the collective efforts of institutions, their stakeholders and the technology partners redefining what is possible. Together, complexity can transform into clarity, risk into opportunity and compliance into an integral part of building a smarter, safer financial system.

As South Africa continues to strengthen its defences against financial crime, the convergence of technology, regulation and corporate responsibility becomes paramount.

The message is clear – FICA is not a suggestion. "With South Africa having completed all required reforms and awaiting a final on-site visit before potential removal from the FATF greylist at the October 2025 meeting, the escalating reputational and financial costs of failing to comply highlight the need for a collective effort to solidify the integrity of South Africa's financial ecosystem and uphold its standing in the global economy.

About the author: Mouna Eksteen is an Executive at XTND, focusing on developing solutions that enhance financial risk management and compliance.

For more information, visit https://www.xtnd.co.za.