After years of legislative reform, supervisory restructuring, and intense international scrutiny, South Africa has officially entered what regulators are quietly calling “the new enforcement era.”

Following the country’s removal from the FATF grey list, the Financial Intelligence Centre (FIC), Prudential Authority, FSCA, Legal Practice Council, Estate Agency Affairs Board, and other supervisory bodies are now pivoting from education and guidance to active, assertive enforcement. And for the first time in decades, this enforcement will extend across all accountable institutions—banks, insurers, fintechs, DNFBPs, SMEs, professional sectors, and emerging digital industries.

South Africa has rebuilt its regulatory architecture - now it must prove it works.

This article, the fourth in ThisIsMe’s KYC/FICA 2026 Compliance Series, examines the forces driving this enforcement shift, how regulators will operate in 2026, the common compliance weaknesses they intend to target, and what businesses must do to prepare.

Why South Africa Is Entering a New Enforcement Era

When FATF removed South Africa from the grey list, it did so with a subtle but powerful caveat: the country had fixed structural weaknesses, but now had to demonstrate sustained operational effectiveness. That means consistent inspections, measurable penalties for non-compliance, and real-world enforcement outcomes. This especially applies to sectors previously that have been previously overlooked, such as like motor vehicle dealers, accounts, property practicioners, and more. 

For regulators, this is not optional. South Africa must show—continually—that its AML/CFT controls are functioning in practice, not just in theory. And because the FATF follow-up process will monitor the country for years to come, supervisors are under pressure to produce:

• More inspections
• More administrative penalties
• More robust sectoral guidance
• More detailed risk assessments
• More evidence of money-laundering detection and STR follow-through

This pivot brings South Africa’s approach closer to that of the UAE, Singapore, and the UK: systems where compliance failures result in meaningful consequences, not advisory letters.

In short, 2026 will be the first year where South Africa’s AML/CFT system is expected to perform under normal conditions—not under reform conditions.

How Supervisors Will Operate Differently in 2026

To understand what lies ahead, businesses must recognise that South African regulators are expected to tighten their grip on reguated industries and have less tolerance for non-compliance. Their methods, priorities, and expectations are changing. Supervisors are shifting from a reactive, documentation-focused posture to a risk-driven, behaviour-focused, evidence-based oversight model.

What this means in practice:

• More proactive inspections, including unannounced or rapid-cycle reviews.
• Focused thematic inspections, targeting sectors like real estate, law, accounting, fintech, and alternative investment spaces.
• Greater reliance on data-driven supervisory tools, including automated analysis of STR filings, transaction patterns, and BO discrepancies.
• Less tolerance for weak record-keeping, especially where customer risk ratings or BO verifications are vague or unsupported.
• Direct comparisons between what institutions reported and what the regulator can independently verify.

The tone of supervision is shifting from advisory collaboration to accountability-driven review. Regulators will no longer simply test whether a policy exists, but will instead stringently test if it works, and whether it is consistently applied.

The Weaknesses Regulators Are Preparing to Target

While supervisors will continue to assess broad FICA compliance, 2026 inspections are expected to place special emphasis on certain recurring weaknesses that FATF, the FIC, and domestic supervisors have flagged over the past three years.

The most common problem areas include:

• Inadequate beneficial ownership verification, especially for multi-layered structures, foreign-controlled companies, and trusts.
• Weak or generic Risk Management and Compliance Programmes (RMCPs) that fail to reflect the institution’s actual operating model, products, or customer segments.
• Poor risk rating methodologies, including models that do not meaningfully differentiate between low, medium, and high-risk profiles.
• Insufficient ongoing monitoring, where risk triggers are not applied or event-driven reviews are not documented.
• Late, incomplete, or poorly reasoned STRs, especially when unusual activity is rationalised instead of reported.
• Gaps in staff training, with frontline teams unable to explain risk concepts or escalation processes during audits.
• Document trails that are incomplete, missing timestamps, missing evidence, or missing verification narratives.

These gaps are not theoretical; they are the foundation of most enforcement actions in comparable jurisdictions globally. South Africa’s regulators are now ready to treat them seriously.

Why SMEs and DNFBPs Will Face More Scrutiny Than Before

Historically, banks have borne the brunt of regulatory expectations. They are the largest institutions, they process the highest volumes, and they fall under the most sophisticated supervisory bodies. But 2026 marks a shift.

South Africa’s regulators are increasingly concerned about sectors that have grown in economic importance but not in compliance maturity. These include estate agents, attorneys, accountants, dealers in high-value goods, trust service providers, and a fast-growing SME fintech ecosystem. Many of these sectors were lightly supervised in the past, but the FATF has explicitly required South Africa to close these gaps.

The result is that smaller institutions will now feel pressure similar to that traditionally placed on banks. And because many SMEs are unfamiliar with detailed FICA expectations, supervisors expect to find numerous compliance weaknesses.

This is not punitive; it is simply the natural outcome of aligning South Africa’s AML/CFT system with global norms. But businesses that underestimate the seriousness of this shift will find audits far more challenging than expected.

How Businesses Should Prepare for a More Assertive Supervisory Landscape

With enforcement activity rising, all accountable institutions must modernise their compliance frameworks. Regulators are no longer satisfied with boilerplate RMCPs or KYC files that demonstrate only minimal effort. They want to see evidence of understanding, consistency, risk alignment, and continuous improvement.

To prepare for 2026, every institution should prioritise:

• Updating the RMCP to reflect current business operations, products, delivery channels, and risk exposures.
• Strengthening BO verification processes, including documenting how each beneficial owner was identified and validated.
• Recalibrating the Customer Risk Rating model to reflect modern risk factors and ensure that higher-risk profiles automatically escalate to EDD.
• Implementing continuous monitoring, including automated sanctions, PEP, and adverse media screening.
• Reviewing staff training programmes to ensure front-line teams can confidently explain procedures during audits.
• Testing STR processes through scenario drills to improve narrative quality and decision-making consistency.
• Ensuring all documentation is complete, chronologically structured, and audit-ready at any time.

Institutions that proactively modernise now will handle inspections with confidence. Institutions that wait until they receive an audit notice may not have enough time to close gaps.

The Strategic Upside: Compliance as a Competitive Differentiator

While the new enforcement era may feel challenging, it also offers an unusual opportunity. Businesses that develop strong, modern, risk-based compliance systems will enjoy advantages that go far beyond audit results. They will see smoother onboarding processes, faster relationships with international partners, reduced exposure to reputational damage, and enhanced trust in their operations.

In an environment where foreign banks and investors remain cautious about South Africa’s risk profile, institutions that can demonstrate compliance excellence will stand out. Compliance is now something that enhances credibility and accelerates growth.

This is especially true for fintechs, professional service firms, and emerging digital businesses that rely on trust, accuracy, and operational resilience to scale.

How ThisIsMe Helps Institutions Navigate the Enforcement Era

ThisIsMe provides the tools, data, and automation that institutions need to operate confidently in South Africa’s new regulatory landscape. Our products support risk-based KYC processes from end to end, including identity verification, beneficial ownership mapping, ongoing monitoring, sanctions screening, and audit-ready reporting.

We design solutions that simplify compliance while maintaining exceptional accuracy, helping businesses avoid gaps that could trigger supervisory concern. As enforcement intensifies, ThisIsMe’s technology becomes essential infrastructure for any institution seeking to protect its reputation, reduce manual workload, and meet regulatory expectations without inflating cost.

2026: The Era of Compromised Compliance Is Over

For the first time in decades, South Africa’s AML/CFT regime will be measured not by the content of its laws but by the behaviour of its businesses. Every institution, from major banks to sole-practitioner attorneys, will be expected to demonstrate a mature, functioning, risk-based compliance program.

2026 will be a year of accountability. But for institutions that prepare early, it will also be a year of stability, opportunity, and growth. The enforcement era does not need to be feared—it simply needs to be met with the right systems, the right processes, and the right partners.

ThisIsMe is ready to help every accountable institution rise to the moment.