7 Reasons Why You Should Automate Your FICA Process

There is no doubt that software and digital solutions have forever changed how businesses manage their regulatory compliance. The concept of digital transformation and Regulatory Technology (RegTech) innovation has long changed from being “a futuristic nice to have” to an enabler of existing procedures and processes and is now an essential component of any business.

But what is it that businesses are finding so useful and why have so many turned to software to assist with their regulatory compliance needs?

1. Increase in productivity

When discussing compliance the number one complaint is that implementing compliance procedures and requirements are labour intensive across the business, therefore it negatively impacts productivity due to all the extra time and resources spent on compliance procedures.

It should also then come as no surprise that this is the number one reason why most businesses - small or large - are motivated to start using an automated solution. The benefits of using an automated solution means that repetitive tasks get completed automatically and mundane tasks (like collecting and filing mountains of paperwork) are removed.

💡 In terms of FICA compliance, an example of this is no longer having to manually request nor send countless emails to collect and follow up on customers’ documentation for FICA purposes. Automated software enables you to load a customer with a specific entity type and takes care of emailing the customer to ask for the relevant forms, and will send a follow up email when the incorrect or invalid documentation has been sent.

2. Standardise and enforce a single approach to ensure consistent policies and procedures

As a business grows, the task of ensuring everyone is consistently carrying out the correct procedure becomes more complex. Does the following sound familiar? You have spent a huge amount of time trying to create, document and implement policies and procedures across the business, however you have no way to track if these procedures are being adhered to?

The best software tools allow you to define, create and implement your policy and procedures according to your unique business needs.

💡 According to the FIC Amendment Act, risk rating your customers, to ultimately determine the amount of due diligence to be done, is vital and should be consistently carried out whenever you onboard a customer. Having a configured system that is set up according to your business rules means that when onboarding a client you are able to enforce that each client is risk rated and thus onboarded consistently across your business, according to your rules.

3. Have easy oversight at the click of a button

Gone are the days where businesses need to spend hours pulling various reports in order to get status updates. Using a centralised software solution means that businesses are able to use dashboards to organise data, so more time can be spent on data interpretation.

💡 For example, in order to meet your FICA requirements it is important to ensure that each client progresses through all the “FICA required steps”. So in terms of better managing your client onboarding, when using a software solution you should be able to access a view that will allow you to easily see what stage of onboarding your clients are in. In terms of managing where your clients are at in the “FICA process” you could have a dashboard that shows you how many clients are in a “pending” stage as you wait for them to send their documents. You can also have a view to see if clients have appeared on any sanctions lists.

4. Eliminate human error and perform near impossible tasks

Let’s face it, compliance is often an onerous task and due to its monotonous nature there is possibility for human error. Automation largely takes away the monotonous work and therefore enables staff to instead focus on decision making.

Another way that technology supports staff is that it enables and simplifies next to impossible tasks that put your business at risk.

As per the FIC “ Accountable institutions must be able to determine whether they have a sanctioned person or entity as a client or whether a prospective client is a sanctioned person or entity in order to determine their exposure to TFS-related obligations. This implies that accountable institutions which are likely to come into contact with sanctioned persons or entities are able to screen clients and prospective clients against the relevant sanctions lists. This should be done during the client-take-on process as well as subsequently as and when the UNSC adopts new TFS measures or expand existing ones.”

💡 If recent times are anything to go by, there are frequent changes made to sanctions lists, and finding lists with the most up to date names can be challenging. A further consequence of this is that it takes hours for staff members to manually screen and search every individual on various sanctions lists before onboarding them, so there have been solutions created to ensure shorter turnaround times, with higher levels of accuracy, leading to improved and enhanced processes. In other words, just one example is using a software solution to automate your sanction, DPEP and FPEP screening so that staff no longer have to spend hours searching sanctions lists. As an added bonus software solutions can largely reduce risk more as they have the ability to enable algorithms that skillfully handle variations in names and spelling ensuring that nothing slips through the cracks.

5. Keep up to date with the latest regulatory requirements

Albeit frustrating and sometimes confusing, there is one guarantee when it comes to laws, compliance and regulations and that is they will always be changing. Just as you think you have understood and successfully implemented procedures to meet compliance requirements, new laws and rules come into effect. It is therefore a continuous process that businesses should be scanning and looking out for changes in regulations and law. Being a “small business” is not an excuse for being non-compliant and law enforcers do not accept the excuse of “I was unaware or unintentionally breaking the law”.

To prevent this, businesses often hire specialists, however for some businesses this simply doesn't make sense and so they turn to their software providers for guidance and to keep them up to date with their compliance requirements.

💡 Software solutions are often built around the latest requirements, so the best providers will have an in-house compliance team that ensures that the software is up to date with compliance regulations, meaning that your business can now rely on your software provider to keep you up-to-date with the latest regulatory requirements.

6. Enhanced customer experience

It has been proven time and time again that The Value of Customer Experience will have various positive impacts on your business. Your client’s onboarding experience shouldn’t be harmed by complicated onboarding procedures.

For example,using a software solution that allows clients to take pictures of their documents which then automatically uploads the documents for checks, replaces back and forthemails and mountains of paperwork. This simplified, easy to use system will not only impress customers but have them satisfied with the time and effort it takes to onboard them.

With the ease of access and clear benefits for both your business and the client, it is no surprise that businesses have experienced a profound impact across business operations and customer engagement when turning to technology.

7. Level the playing field

The use of software enables smaller-to-medium sized businesses to run as efficiently and effectively as larger corporations. The adoption of software means you are using the same systems and processes as that of larger businesses with hundreds of resources. As we have seen for years now, in various industries, technology is levelling the playing field and providing opportunities that weren’t previously possible.

💡 The same applies for businesses and their compliance requirements, small businesses no longer need to get bogged down or limited with compliance requirements, instead they can implement tools that will enable them to move quickly while still meeting their compliance obligations.

To conclude, having an automated software solution to assist you with your compliance requirements has many advantages such as enhancing customer experience, improving productivity and eliminating inefficiencies. However, having a solution alone is not enough to eliminate the risk of non-compliance. Businesses should seek to partner with end-to-end solutions that will provide frequent training, guidance, support and advice. Continually training and upskilling all your staff on software and compliance requirements plays a large role in how successful your business can be at using software to assist you in meeting all your compliance requirements.