More than a FICA checklist..
Knowing your client is a fundamental part of the due diligence required by the Financial Intelligence Centre Act (and Amendments) (“FICA”).
FICA asks you to identify and perhaps more importantly, verify your clients before you enter into a business relationship or undertake a single transaction – but it goes further than just an ID book and proof of address and so a simple FICA Checklist approach won’t really cut the mustard.
FICA take a risk-based approach and requires you understand additional elements such as the source of funds/wealth for your client and their transactions, whether they are on any sanctioned watchlist, if they hold a prominent, public or influential position in society and the nature and purpose of them looking to engage you.
All of this information, along with elements that you have assessed as being good indicators of risk in your business, such as products or service or nature of business, should then be used to assess the potential risk your client and their anticipated business with you represents.
Where the is higher risk, FICA expects you to look even closer.
So if you’re thinking that the tick-box approach of a FICA Checklist is enough, you may need to think again.
Systems such as DocFox are great in helping standardise and simplify your approach to FICA, and can take a checklist approach to the next level by automating your risk rating, verifications and screening.