In a bid to combat the increasing spate of fraud, South African Banks are legally required to establish the source of funds coming into their customer’s bank accounts.

As a result, banks regularly review their compliance with the Financial Intelligence Centre Act (FICA) and Know-Your-Customer (KYC) regulations to ensure that customer accounts are supported by updated, legally required information and documentation.

Marcel Klaassen, head of sales at FNB Business, says financial institutions on an ongoing basis identify accounts that are non-compliant. The account owners are notified of their accounts’ non-compliance and are requested to provide their respective banks with updated information and documentation.

 He cautions businesses against making common FICA compliance mistakes that could result in them failing to submit the required documentation on time, leaving banks with no option but to restrict the account activities on such non-compliant accounts, as the very last resort.

Klaassen shares three common FICA compliance mistakes that business owners should aim to avoid.

Refusing to re-submit FICA documents when requested
While the bank may have initially received your business’ supporting documents, there is always a possibility that there are outstanding documents or additional information required.

Submitting incorrect documents
Businesses, depending on their structures, have different FICA documentation requirements. It is essential to seek advice from your bank or financial institution if you are not sure of the documentation you are required to submit. For example, there are different requirements for companies, close corporations and partnerships.

Not regularly updating changes to your business information
Make it a priority to update all your business information with your bank. Information such as the physical or postal addresses and details of the business owner(s) is important in protecting one’s business against fraud.

“Compliance to FICA is an absolutely necessity. We urge business owners to continue working closely with their banks and financial service providers to eliminate fraud and comply with regulations,” concludes Klaassen.