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Fica-smart app eases pain of financial compliance

Feb 06 2018 11:48
Jessica Hubbard

For local financial institutions of all sizes, one of the primary obstacles to doing business has been the rather sticky issue of compliance. And, more specifically, compliance with the Financial Intelligence Centre Act (Fica) of 2001. 

The Act was introduced to fight financial crimes such as money laundering, tax evasion and terrorist financing activities. 

While Fica has brought South Africa in line with similar legislation in other countries, it has also placed a weighty administrative burden on time-strapped financial services players. 

In order to comply with the stringent identification, screening and record-keeping policies connected to Fica, companies have traditionally had to onboard their clients manually. 

For smaller firms in particular, this process can be both lengthy and expensive. 

Enter DocFox, a fintech start-up that is seeking to address what has become a major pain point in the global financial services sphere. 

By developing an easy-to-use digital solution, DocFox is looking to simplify the entire Fica compliance process through streamlined document authentication, risk rating and sanctions screening. 

With simplicity top of mind, the company has created a web application that helps customers submit their Fica documents electronically (within minutes). 

Customers can upload copies of their proof of identity and address documents, or submit documents using their smartphone cameras.

“We noticed that small financial services players simply couldn’t access the same resources and licences [associated with compliance] that were typically available to big banks, for example,” explains Ryan Canin, DocFox CEO and co-founder. 

“We wanted to provide a solution that created a similar level of access to global financial markets, and thereby put these companies on an equal footing with the bigger financial services players.” 

DocFox entered the market towards the end of 2015, and initially launched in the forex trading space. According to Canin, the start-up had a “high-touch” relationship with its early customers, and worked closely with them to build “the right product”.

“This is a compliance tool that was built by our customers,” notes Canin, underscoring the importance of working closely with market players to address the essence of the challenge. 

A complex landscape

In 2017, President Jacob Zuma signed changes to Fica into law. 

While the Presidency noted that the amendments “further strengthen the transparency and integrity of the South African financial system”, the new Bill has arguably complicated an already difficult compliance process for financial services players.

Having partnered with global law firm Norton Rose Fulbright, DocFox is able to work with its customers to navigate the uncertainty associated with the amended Fica Bill – essentially harnessing technology to give clients much-needed peace of mind. 

“With the latest amendments to Fica, SA is shifting to a risk-based approach whereby you treat everybody based on the risk they pose from a money laundering perspective – and our technology is designed to facilitate that process with ease,” says Canin. 

He highlights that the DocFox mission is threefold: helping clients to manage compliance risk; reducing cost and operational efficiency; and facilitating open access to new markets via digital channels.

Global footprint

The past six months have shown that the financial services sector is certainly hungry for this type of streamlined solution, with DocFox attracting massive interest both locally and abroad. 

Canin notes that they receive at least three new customer enquiries daily, while the development team releases new features on a weekly basis. 

“We are working hard to shift the prevailing mindset in the market – so that instead of viewing Fica as a burden, companies recognise it as good business practice,” he explains. 

Looking ahead, with the worldwide explosion of fintech companies and innovative fintech solutions, savvy Fica compliance tools will be integral to success and sustainability. Whenever a new robo-adviser firm or cryptocurrency exchange comes online, for example, these service providers will have to be Fica compliant.

“Our role is to handle the complicated compliance process for these firms, and allow them to remain focused on growing their business,” adds Canin.

In SA, DocFox services clients of all sizes including Liberty, Afgri, 36ONE Asset Management, Treasury One and Vunani Securities, among others. Last year, DocFox signed on two banks in South Florida in the US, which is a high-risk jurisdiction for financial services. 

The company has also secured global partners and high-profile US investors to facilitate its growth. 

Over the next three to five years, the DocFox team will be looking to extend its footprint in the US and enter the European financial services sector. 

“Our goal is to facilitate linking the different continents, and to reduce the inherent complexity within trading and financial compliance across borders,” says Canin.

This article originally appeared in the 1 February edition of finweek. Buy and download the magazine here.

technology  |  financial services  |  app  |  fica
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