Geospatial tech solves FICA, KYC challenges

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geospatial image.PNGpbVerify’s ground-breaking KYC API transforms laborious manual processes into fast, effective and secure verification.

In our ongoing quest to build a digital future based on holistic online solutions to help our clients maximise operational efficiency, pbVerify has developed a Digital KYC API like no other.

Designed for institutions accountable to the Financial Intelligence Centre Act (FICA) – specifically its know your customer (KYC) requirements – our Digital KYC API (application programming interface) takes the pain out of the on-boarding process for both accountable institutions, and their customers.

pbVerify’s API transforms an onerous, time-consuming and expensive manual process into a convenient, fast-moving and inexpensive online one.

KYC hurdles

KYC, a risk-based assessment of customers (individuals and businesses), is an integral part of FICA which makes it incumbent on accountable institutions to carry out extensive due diligence on all financial services applicants.

This typically involves a list of documents, including minimum requirements such as proof of residence and proof of identification for individuals; and evidence of shareholding, director information and company history for businesses  (either originals, or sighted by an institution employee).

Steeped in red tape and paper documents, the manual KYC process has long been the bane of institutions and potential customers alike. Not only is it costly and time-consuming, it can be incredibly frustrating, given South Africans’ unique circumstances.

Moonstone, a Stellenbosch-based independent support network for financial service providers, cites residential transience and “an inefficient postal service” as aggravating factors in the KYC process.

API answer

Instead of spending unnecessary time and money trying to acquire the list of documents and physical verification required by FICA’s KYC rules, financial institutions can now – by running pbVerify’s Digital KYC API – get identification and residential verification directly from the HANIS (Home Affairs National Identification System) and SACRRA (South African Credit & Risk Reporting Association) databases, respectively, instantly and online.

Coupled with advanced algorithms, which were built to eliminate all the challenges South African address databases face, this makes pbVerify’s latest solution the most powerful one on the market.

In a nutshell, the KYC API works like this:

  1. Applicant requests an account with a registered credit provider.
  2. Applicant completes the credit provider’s online form, linked to the pbVerify KYC API.
  3. Applicant’s identification information (names and ID number) are instantly verified against the HANIS database.
  4. Applicant’s address (residential information) is verified against the SACRRA database, based on two parameters set by the credit provider, i.e. over what period – 3, 6, 12, 24 or 36 months; and how many address matches required, obtained from other credit providers.
  5. If the Digital KYC API returns the applicant’s address data as matching the database, as per credit provider’s criteria, the system automatically approves the KYC process.
  6. The system sends a response to the compliance department, indicating whether or not the consumer is FICA compliant.

API differentiator

What sets pbVerify’s KYC API apart from other digital KYC verification products on the market, is the advanced method is uses to not only effectively, but to irrefutably verify applicants’ information.

Our API uses geospatial technology, as well as multi-paradigm geodistance algorithms, to determine and compare address data between data received from applicants, and data on file from at least one hundred registered credit providers across South Africa.

Essentially, our technology loops through credit provider data to find similar address matches, within the said specified time parameter (3 to 36 months), within a few metres of the pinned geolocation of the applicant’s input.

One of the biggest challenges in South Africa when it comes to address verification by credit providers, is the fact that many citizens live in townships and townhouse setups, where the address does not conform to the standard street address format.

To overcome this challenge, pbVerify’s algorithm pinpoints the applicant’s address via geospatial location, strips all anomalies and/or conflicting information from the address, and finds other credit providers that have similar address details. Only if these are also within a few metres of the applicant’s original input, will the API accept the address and report the credit provider sources where it was found.

In other words, only if enough data exists to satisfy your unique KYC requirement-settings, will the API return positive results, together with the source of the data matches, e.g. Vodacom, Edgars, FNB Home Loans, etc.

Apart from the immediately evident advantages of replacing manual with digital – primarily time and cost savings – pbVerify’s Digital KYC API underpins POPI (Protection of Personal Information) Act compliance, it adds another dimension in terms of security, and it removes the probability of human error.

 

[REFERENCES]

  1. gov.za – Financial Intelligence Centre Act, 2001 (Act No. 38 OF 2001)
  2. Financial Intelligence Centre – The FIC Act
  3. Financial Intelligence Centre – Frequently asked questions
  4. Moonstone – KYC– Knowing your client or killing your client?
  5. FNB – KYC/FICA information portal
  6. Investec – KYC Requirements

 

FICA compliance made easy

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SA’s leading data bureau gives businesses the key to pain-free compliance.

Although the Financial Intelligence Centre Act (FICA) came into effect almost a decade and a half ago, it is as relevant today as the day it was conceived.

Instituted in 2003 to curb financial crimes, such as money laundering, tax evasion, and terrorist financing activities, FICA is a law that all financial institutions need to comply with. This includes any business that provides credit facilities in any form – whether assets like houses and cars, or retail items like mobile phone contracts and appliance/clothing accounts – or cash in the form of loans.

FICA basically makes it incumbent on all aforementioned financial services companies to reassess their entire client list, in order to ensure that all clients’ identities and finances can be verified. Think of it as a sweeping credit check of every person in an existing database – it is a means of identifying any individual who could potentially pose a threat to your company.

As with any law governing how businesses handle customer identification and verification processes, and how they manage records, FICA is multifaceted, and comes with severe penalties for businesses that are non-compliant.

Pain-free compliance

But, as daunting as this may sound, it does not need to be – nor does FICA compliance need to be another headache you have to deal with as a credit providing company.

South Africa’s leading data bureau, pbVerify, offers a range of services to make your path as a business striving for FICA compliance as straight as possible.

A division of pbDigital, under Customer Communications firm PBSA, pbVerify is essentially a credit risk management tool for any size business in South Africa that grants credit accounts and payment terms to other businesses and/or to South African consumers.

pbVerify’s online web-based tools help companies assess credit risk by evaluating the credit history of any business and its principles and/or any consumer a company wishes to grant credit terms to. This is done via multiple credit bureaus and other business critical data providers, through one easy-to-use website.

Included in pbVerify’s suite of services, are the following consumer credit check products, which offer your business a painless means of becoming FICA compliant:

Consumer traces for address validation: facilitated by three of South Africa’s main data credit bureaus – XDS, TransUnion and Compuscan – pbVerify’s consumer trace service gives you access to consumers’ latest  contact information.

Bank account verification: pbVerify’s Bank Account Verification Service allows you to efficiently verify the bank details of a consumer, and determine the status of their account – whether the account is currently active, open or closed and whether it has been open for more than three months. The service is available for the 5 major banks in South Africa only.

CIPC Company & Director Verification: pbVerify’s CIPC Company Search Report – one of the most advanced CIPC search tools in South Africa – allows customers to easily retrieve and verify all registration information related to any registered South African business and its principles. Complementing this search too, is the CIPC Director Search Report.

ID Verification: The pbVerify Home Affairs ID Verification tool is used to determine the correct identity information on South African citizens. (This validates the consumer’s identification, but does not confirm whether or not they are credit active)

Alongside this, pbVerify’s ID verification API is used by various corporations, retailers, telecommunications companies, online service providers and system integrators to instantly verify identities for an range of different functions, including customer identification at point of sale, fraud prevention, online transaction verification, customer relations, human resource software and more.

Portfolios feature aids POPI, FICA compliance

doc dSignFlow’s secure multi-document portal, Portfolios, offers businesses a reliable means of complying with stringent regulations.

There are two well-known and much-publicised Acts that make South African businesses shudder in their shoes – the Financial Intelligence Centre Act (FICA) of 2001 and the Protection of Personal Information (POPI) Act of 2013.

The two pieces of legislation have much in common. To begin with, they both have to do with how your business deals with customer identification and verification processes, and how it stores and maintains customer and transactional records. Secondly, there are severe penalties associated with non-compliance – severe enough, in many cases, to cause irreparable reputational and financial damage.

Third of all – and this is the good news – SignFlow can help you comply with both. Our digital signature workflow solution offers you an efficient and sure-fire means of making sure your business processes and IT systems are up to scratch when it comes to compliance with both these Acts – so you need no longer shy away from the dreaded “F-word” and “P-word”.

Portfolios

FICA and POPI compliance largely comes down to how you transmit, maintain and store customer data and, while the sheer volume and variety of data may make the process seem very complicated, SignFlow’s Portfolios feature offers you a surprisingly simple means of tackling it.

A SignFlow Portfolio is basically a portal where you can accumulate multiple documents that have been through a workflow and signed, in combination with documents that are just uploaded and stored.

Because there is no email (which is inherently insecure) involved and all documents are uploaded through a secure, encrypted channel, to an online portal where they can only be accessed by the individuals authorised to access them, Portfolios is an invaluable tool to have in your arsenal when you are striving for FICA and/or POPI compliance.

Let’s take an insurance company, for example:

  • The company requires identification and proof of residence documents (documents required by FICA that both also have a bearing on POPI) from a client.
  • That same client needs to sign a contract, which contains personal and financial information, and send it back to the company.
  • SignFlow Portfolios enables you and your client to upload and share documents (both signed and unsigned) via an encrypted portal.
  • There is no emailing, printing or scanning of documents involved at any stage.
  • All your client’s information is kept neatly in one designated, easy-to-access and searchable databank.

Given that the implementation date for the POPI Act is expected to be set this year – and in light of the FICA failures* we have seen in the past, you are under more pressure than ever before to make sure your business complies. Contact SignFlow today for more information on how we can ease the pressure and give you total peace of mind.

* In April 2014, the South African Reserve Bank fined the country’s four largest banks R125 million collectively for failing to comply with FICA. (www.sanews.gov.za)

pbVerify helps financial services companies become FICA compliant

identity_verificationFICA compliancy for financial services:

If you’re a financial services company in South Africa, did you know there are steps you must take in order to become FICA compliant? You have probably heard about the legislation passed by the Financial Intelligence Centre entitled FICA – or Financial Intelligence Centre Act; the purpose of this legislation is to provide further transparency for financial services companies throughout the country in order to eradicate money laundering, scams, corruption and dishonest business practices.

Essentially, financial services companies such as micro-lenders, auto loan companies and home loan companies must reassess their entire client list in order to ensure that all clients’ identities and finances can be verified. Think of it as a sweeping credit check to everyone in the existing database – it’s a way to identify and handle anyone who poses a potential problem to your company.

You can use pbVerify to help your company become FICA compliant:

  • Online credit checks. Need to find out your clients’ complete credit history? It’s easier than ever before with pbVerify. Our system is user-friendly and efficient, and you’ll have instant access to the complete financial information that you need.
  • Risk management and risk assessment. FICA legislation requires all financial services companies to reassess their books. In addition to re-evaluating current clients, pbVerify can also help you make an informed decision when it comes to taking on new debtors. In this competitive business climate, you need to be certain that you’re making the right decision and not getting involved with people or companies that have questionable financial histories.
  • ID Verification. Our online ID verification solutions and ID-verify API (Application Programming Interface) are in use by some of the country’s largest financial institutions, retailers and system integrators for FICA compliancy and other identification solutions. Our XML data can integrate with almost any platform and provide a fast, but stable platform to build real-time intelligence into your systems with automated consumer ID information on-demand.     

Enlist the services of pbVerify today and your company will be on its way to being fully FICA compliant. In the end, FICA benefits everyone as it aims to eradicate dishonest business practices, money laundering, fraud and scams. Contact us today or visit our website to learn more about pbVerify.