South Africa’s exit from the Financial Action Task Force (FATF) grey list marks a decisive moment for the country’s financial integrity and for the thousands of businesses governed by the Financial Intelligence Centre Act (FICA). After nearly three years under increased monitoring, the delisting is both a recognition of recent sweeping reforms designed to bring South Africa's AML/CFT regime up to global standards, as well as a signal that the global community expects sustained compliance performance from government and industry alike.

For businesses, the implications run deeper than reputational recovery. They shape how quickly cross-border payments clear, how foreign banks assess risk, how auditors review files, and how South African companies must now position themselves in a world where compliance strength is becoming a competitive differentiator.

This article, the first in ThisIsMe’s KYC/FICA 2026 Compliance Series, explains what the exit means, why it matters, and how businesses can ensure their KYC programs are aligned to South Africa's compliance expectations over the coming years.

Why Leaving the Grey List Matters for Your Business

in 2023, the FATF placed South Africa on its greylist due to concerns surrounding the ineffective implementation of national AML/CFT laws. Beneficial ownership transparency was weak, high-risk sectors faced inconsistent oversight, and enforcement agencies struggled to achieve measurable outcomes such as prosecutions or asset recovery. The state capture era had also eroded institutional capacity and created gaps that criminals could exploit.

Greylisting carried swift consequences. Foreign banks treated South African companies as higher-risk, slowing transactions and inflating compliance costs. SMEs struggled with increased documentary requirements from international and domestic partners, while investors were wary of the heightened risk classification.

South Africa’s eventual removal from the grey list therefore represents more than administrative progress; it signals that the country has rebuilt the institutional scaffolding required to protect the financial system. But delisting does not erase responsibility. Instead, it shifts the spotlight onto South African regulators and businesses to uphold the standards that justified the exit.

The Post-Greylist Compliance Reality: Higher Expectations, Not Lower Risk

As South Africa has One of the most common misconceptions is that delisting reduces the compliance burden on businesses. In practice, the opposite is true. With the eyes of the global community still fixed on South Africa, regulators will be more vigilant, supervisors more active, and international institutions more discerning when assessing risk.

Foreign counterparties will not automatically relax enhanced due diligence measures. Instead, they will treat each South African business on its own merits, assessing the sophistication and consistency of its KYC/FICA program. Companies with weak documentation, incomplete beneficial ownership information, or outdated monitoring processes will continue to face obstacles.

A defining feature of the new era is the heightened importance of beneficial ownership verification. The establishment of the CIPC Beneficial Ownership Register, combined with amendments to the FIC Act, means that identifying and verifying the natural persons who ultimately own or control a client is now central to every audit. Businesses that cannot demonstrate how they verified complex ownership structures will find themselves under increased scrutiny, even with South Africa off the grey list.

Domestic regulators have also entered what many describe as the “implementation phase” of AML/CTF reform. After two years of educational guidance, supervisory bodies are pivoting toward enforcement. Inspections will become more frequent, administrative sanctions more common, and record-keeping expectations more stringent. This shift represents a deliberate effort to prove that South Africa can maintain compliance momentum long after the FATF decision.

What Improvements Have Taken Hold—and Where Gaps Remain

The race to exit the grey list accelerated the development of stronger compliance practices across the industry. Many financial institutions have modernised their onboarding systems, strengthened customer due diligence procedures, and restructured their KYC frameworks to align with global norms. Corporate transparency has improved through mandatory beneficial ownership reporting, and various sectors have adopted more robust record-keeping standards.

Yet significant gaps remain, particularly among SMEs and designated non-financial businesses and professions.

Here are the areas where many institutions still struggle:

• Beneficial ownership verification: Companies often gather ownership information but fall short when documenting how control was verified, especially for layered entities, trusts, or foreign structures.

• Ongoing monitoring: While initial due diligence tends to be thorough, periodic and event-driven monitoring remains inconsistent, leaving businesses exposed to outdated risk profiles.

• Suspicious Transaction Reporting (STR) confidence: Many businesses hesitate to file STRs due to uncertainty about thresholds, narrative structure, or evidentiary requirements—despite STR quality being a key supervisory focus in the post-greylist environment.

These challenges will shape how regulators evaluate the private sector’s readiness to support the country’s long-term compliance commitments.

What the FATF Exit Means for Businesses in 2026 and Beyond

The immediate benefit of delisting is the easing of international friction. Cross-border payments are expected to clear more smoothly, and global institutions may slowly reduce the extra layers of due diligence applied during the greylist period. For importers, exporters, and businesses dealing with foreign banks, this could translate into more predictable transaction timelines and lower administrative overhead.

But these improvements will not be evenly distributed. Companies with well-structured KYC programs—clear onboarding processes, accurate beneficial ownership data, and consistent monitoring—will benefit first. Those with inconsistent compliance practices may still be flagged by foreign counterparties.

Domestically, regulators are expected to increase supervisory activity. To maintain the credibility earned through delisting, they will likely request more customer files during inspections, test risk assessment methodologies more thoroughly, and enforce stricter penalties for poor documentation. Businesses that cannot produce clean, well-maintained KYC files will find audits far more challenging than before.

On a macro level, South Africa’s improved risk profile may reduce the cost of capital and increase foreign investment appetite. But again, global investors will differentiate between businesses that demonstrate compliance maturity and those that do not. Being part of the country’s new “culture of compliance” is no longer optional—it is a competitive advantage.

What Your Business Should Prioritise Right Now

As South Africa transitions out of greylisting, businesses should focus on strengthening the core components of their compliance frameworks. Beneficial ownership controls remain at the top of the list. Companies must be able to show how they identified and verified ultimate beneficial owners, even in complex structures, and maintain supporting evidence in an audit-ready format.

Customer Risk Rating models also require attention. A credible risk-based approach must reflect the realities of modern financial crime: jurisdictional exposure, delivery channels, PEP involvement, sectoral risk, and expected customer behaviour. Regulators will expect businesses to explain the logic behind their models.

Ongoing monitoring needs to be upgraded from a periodic administrative exercise to a dynamic, risk-driven process. Automated screening for sanctions, PEP status and adverse media will allow businesses to detect meaningful changes quickly and accurately. Finally, strong record-keeping remains non-negotiable. Supervisors expect clear, chronological evidence of every KYC decision, including how risks were assessed and how owners were verified.

How ThisIsMe Supports the Post-Greylist Compliance Environment

As South Africa embraces its new compliance expectations, ThisIsMe is positioned to help businesses meet these demands confidently and efficiently. Our high-quality identity, data, and monitoring solutions are designed to meet audit standards and support businesses through every stage of the KYC process. From automated beneficial ownership verification to continuous risk monitoring and audit-ready documentation, ThisIsMe provides scalable tools that reduce compliance friction without compromising accuracy.

Our pricing is purpose-built for SMEs and enterprise clients alike, ensuring that compliance is accessible, sustainable, and aligned with South Africa’s broader goal of building a resilient, trusted financial ecosystem.

The Road Ahead: Compliance as a Competitive Advantage

South Africa’s departure from the FATF grey list is a milestone worth celebrating, but it is not an endpoint. The real test lies in whether businesses can maintain and strengthen the systems that earned the country’s delisting. Compliance is no longer just a regulatory requirement; it is a marker of credibility, a tool for unlocking global partnerships, and a decisive factor in how smoothly businesses operate.

Companies that invest now in robust, modern KYC frameworks will gain faster onboarding, improved access to foreign partners, and a financial environment that rewards transparency. Those who delay will face growing supervisory pressure and increased operational risk.

South Africa has rebuilt its financial guardrails. The responsibility now lies with every institution to help keep the system strong.