<h2><b>What is the Financial Intelligence Centre Amendment Act (FICA)?&nbsp;</b></h2><p>In South Africa, an Accountable Institution is a concept that is defined and regulated by the Financial Centre Amendment Act (FICA). Therefore, to understand an Accountable Institution, one first needs to understand what FICA is.&nbsp;</p><p>FICA is South Africa’s central piece of legislation for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT). It governs many aspects of South Africa’s financial system, including defining and regulating the concept of an Accountable Institution and South Africa’s adoption and the Risk-Based Approach (RBA) for the country’s national AML/CFT legislation.&nbsp;</p><h2><b>What is an Accountable Institution (AI)?</b>&nbsp;</h2><p>Accountable Institutions (AIs) can be broadly understood as financial institutions, businesses and organizations that, due to the financial and legal nature of their business, carry a higher responsibility towards their clients, government and society – a responsibility that means AIs are held to higher standards concerning good governance, enhanced due diligence, and risk assessment and mitigation.&nbsp;</p><p>FICA classifies certain businesses, institutions and organizations as Accountable Institutions (AIs). When a financial institution, business or organization is designated as an AI, it has to comply with a wide range of regulatory requirements that cover due diligence, record-keeping, reporting of information to the Financial Intelligence Centre (FIC) and internal compliance governance.&nbsp;</p><p>As South Africa’s leading provider of world-class identity verification, data validation and due diligence solutions, ThisIsMe gives businesses the tools they need to ensure compliance with the regulatory obligations established by FICA. To discover how we can empower your business to easily meet its regulatory compliance obligations, contact us <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p><h2><b>Who/What Classifies as an Accountable Institution?</b>&nbsp;</h2><p>According to the <a href="https://banking.org.za/wp-content/uploads/2019/07/financial-intelligence-centre-act-38-2001.pdf" target="_blank">Financial Intelligence Centre (FIC)</a>, the definition of an accountable institution includes:</p><ul><li>A practitioner who practices as defined in section 1 of the Attorneys Act (53 of 1979).</li><li>A board of executors or a trust company or any other person that invests, keeps in safe custody, controls or administers trust property within the meaning of the Trust Property Control Act (57 of 1988).</li><li>An estate agent as defined in the Estate Agency Affairs Act (112 of 1976).</li><li>An authorised user of an exchange as defined in the Securities Service Act (36 of 2004).</li><li>A manager registered in terms of the Collective Investment Schemes Control Act (45 of 2002), but excludes managers who only conduct business in Part VI of the Collective Investment Schemes Control Act (45 of 2002).</li><li>A person who carries on the ‘business of a bank’ as defined in the Banks Act (94 of 1990).</li><li>A mutual bank as defined in the Mutual Banks Act (124 of 1993).</li><li>A person who carries on a ‘long-term insurance business’ as defined in the Long-Term Insurance Act (52 of 1998).</li><li>A person who carries on the business of making available a gambling activity as contemplated in section 3 of the National Gambling Act (7 of 2004) in respect of which a license is required to be issued by the National Gambling Board or a provincial licensing authority.</li><li>A person who carries on the business of dealing in foreign exchange.</li><li>A person who carries on the business of lending money against the security of securities.</li><li>A person who carries on the business of a financial services provider requiring authorisation in terms of the Financial Advisory and Intermediary Services Act (37 of 2002), to provide advice and intermediary services in respect of the investment of any financial product (but excluding a short term insurance contract or policy referred to in the Short-term Insurance Act (53 of 1998) and a health service benefit provided by a medical scheme as defined in section 1(1) of the Medical Schemes Act (131 of 1998).</li><li>A person who issues, sells or redeems travellers’ cheques, money orders or similar instruments.</li><li>The Postbank referred to in section 51 of the Postal Services Act (124 of 1998).</li><li>The Ithala Development Finance Corporation Limited.</li><li>A person who carries on the business of a money remitter.</li></ul><p>Furthermore, the classification of an accountable institution affects all clients/consumers that enter into either a single transaction or a business relationship with an accountable institution. The classification of clients/consumers include:&nbsp;</p><ul><li>Natural Persons</li><li>Natural person acting on behalf of another, or</li><li>Foreign national</li><li>Close corporation</li><li>South African company</li><li>Foreign company</li><li>Legal Persons</li><li>Partnerships</li><li>Trusts</li></ul><p>Although a wide range of businesses, institutions, organizations and individuals may be classified as an accountable institution, the exact laws and regulations that each accountable institution will be obligated to adhere to will vary due to South Africa’s use of a Risk-Based Approach to AML/CFT legislation.&nbsp;</p><h2><b>What is a Risk-Based Approach (RBA)?</b>&nbsp;</h2><p>A Risk-Based Approach (RBA) is a system of risk management that adjusts itself depending on the risk level of a country, industry, or specific business.&nbsp;</p><p>Because South Africa operates a Risk-Based Approach (RBA) to money laundering regulation, it is the responsibility of the AI to identify risks and take the necessary steps to mitigate those risks. Once the AI has finalized its risk management strategy, it will be presented to the Financial Intelligence Center (FIC) for approval.&nbsp;</p><p>For example, if a particular business industry is at high risk of financial crime, businesses within that sector will be legally obligated to implement serious protocols to mitigate the risk of financial crime occurring. Businesses in other sectors that are at a far lower risk of financial crime will not be legally obligated to employ the same protocols because they are not exposed to the same level of risk.</p><p>In South Africa, the RBA is closely linked to the concept of an Accountable Institution because an AI’s legal obligations are largely dictated by the principles of South Africa’s RBA. To a certain extent, an AI’s legal obligations and the steps it takes to be compliant with those obligations will be dictated by the risk profile of the AI in question.&nbsp;</p><p>Consequently, the digital tools that an AI requires to ensure regulatory compliance will vary on a case-to-case basis. For example, due to the varying natures of their business, one AI may require a wide variety of basic tools for identity verification, while another AI may require complex digital tools that focus on enhanced due diligence and risk analysis.&nbsp;</p><h2><b>South African AML/CFT Regulatory Compliance Solutions</b>&nbsp;</h2><p>AML/CFT laws and regulatory compliance obligations vary from country to country and can fundamentally affect how businesses interact with their customers and other business partners.&nbsp;</p><p>Accordingly, when doing business in a country and ensuring regulatory compliance, it is important to employ experts in the relevant country who are best equipped to operate within the nexus of legislation, law enforcement and economic realities while delivering high-quality and cost-effective solutions for ensuring regulatory compliance. &nbsp;</p><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Introduction to Accountable Institutions (AIs) in South Africa and how they relate to KYC, due diligence and risk assessment compliance obligations

Accountable Institution

<h2><b>What are Account Verification Services (AVS)?</b></h2><p>Broadly, Account Verification Services verify information about a bank account, such as the identity of its owner and the type of account.&nbsp;</p><p>AVS checks typically work by cross-checking the identity of the account holder against the bank account number provided. This validates firstly that a bank account is legitimate, and secondly, that it is owned by a verified individual and not a fraudster.&nbsp;</p><p>Most commonly, AVS checks are used to verify that an individual is the actual owner of the bank account number that they provide.&nbsp;</p><h2><b>Why are Account Verification Services (AVS) Important?&nbsp;</b></h2><p>AVS checks are important because they ensure transparency and reduce fraud. By verifying the identity of a bank account owner, AVS checks help businesses to ensure important information, such as the account they are paying into actually belongs to the person they think it does, or that the account they are receiving payments from is actually owned by the individual whose identity they are dealing with.&nbsp;</p><p>Conducting AVS checks empowers a business to scan for red flags such as discrepancies relating to account owner information. Should red flags emerge as a result of the AVS check, a business can account for the heightened risk and take the appropriate risk mitigation steps.&nbsp;</p><p>Accordingly, the failure to conduct AVS checks can expose businesses to heightened levels of risk.&nbsp;</p><p>In many countries, AVS checks are a legal requirement that financial institutions are legally obligated to conduct. Regulatory compliance obligations concerning AVS checks are an important part of national AML/CFT legislation designed to combat financial crime.&nbsp;</p><p>Failure to comply with these regulatory obligations can lead to national regulators imposing severe punishments on the offending business – fines and even jail time can be issued as punishments for non-compliance or active breaches in national AML/CFT law.&nbsp;</p><h2><b>AVS as a Know Your Customer (KYC) Check&nbsp;</b></h2><p>Know Your Customer (KYC) is a term that refers to procedures and mechanisms that are used to verify the identity of customers before conducting business with them.&nbsp;</p><p>When conducting KYC checks, a business will typically be verifying:</p><ul><li>That an individual exists&nbsp;</li><li>Whether that individual is exactly who they claim to be&nbsp;</li><li>Whether that individual is eligible to receive the product or service in question&nbsp;</li><li>Whether that individual poses a threat of money laundering or other such crime</li></ul><p><span style="font-size: 0.8125rem;">AVS checks often form part of the selection of KYC checks that businesses run on their customers – examples include a bank requiring proof of residence before they can approve a client’s loan request.&nbsp;</span></p><p>AVS checks, therefore, are a crucial part of helping a business verify that an individual is who they claim to be and that all the information associated with them is correct.&nbsp;</p><h2><b>Online AVS Checks&nbsp;</b></h2><p>Today, AVS checks have been completely digitalized and are conducted online. Online AVS checks can be conducted in a matter of seconds, enabling incredibly efficient and effortless workflows that reduce waiting times and improve customer satisfaction.&nbsp;</p><p>More broadly, online tools enable highly efficient, accurate and cost-effective means for identity verification and data validation. Today, online identity verification leverages powerful technologies like biometric information and artificial intelligence to deliver incredibly accurate and reliable identity verification.&nbsp;</p><p>Furthermore, online identity verification allows for the verification of remote individuals – clients and individuals on the other side of the world can easily verify themselves, while businesses have the capacity to efficiently verify new clients, customers and employees in a seamless remote-onboarding process.&nbsp;</p><p><span style="font-size: 0.8125rem;">For businesses, institutions and organizations that process smaller batches of AVS checks, ThisIsMe’s Partners Platform provides access to our services on a subscription or pay-as-you-go basis. This ensures that our suite of world-class solutions remains accessible to clients of all sizes and at all price points.&nbsp;</span></p><p>For businesses, institutions and organizations that need to process large batches of AVS checks, Application Programming Interfaces (APIs) enable the seamless integration and automation of identity verification and data validation services like AVS checks.&nbsp;</p><h2><b>What is the Difference Between a Realtime AVS Service and a Batch AVS Service?</b></h2><p>A real-time AVS service is when the information for a single account is submitted and verified instantly. ThisIsMe provides real-time AVS through our manual Partners Platform, as well as our automated API solution.&nbsp;</p><p>A Batch Data AVS service is when a large dataset of account details is submitted at once in order to be verified. This is commonly done when a business must verify the account information for a large portion of its customer base, such as part of an ongoing monitoring procedure to ensure that all account details remain accurate and valid. ThisIsMe provides Batch Data Processing capability for our AVS solution.&nbsp;</p><h2><b>AVS API (Application Programming Interface)&nbsp;</b></h2><p>Application Programming Interfaces (APIs) can be understood as mechanisms that enable two or more software components to communicate with each other using established protocols and definitions.&nbsp;</p><p><span style="font-size: 0.8125rem;">In the context of identity verification and data validation – such as AVS checks – an API enables a business to build the necessary software into the relevant customer and employee onboarding processes, thereby ensuring a seamless and efficient verification process.&nbsp;</span><br></p><p><span style="font-size: 0.8125rem;">Although APIs can greatly increase the efficiency of AVS for all businesses, they are especially useful for large businesses, institutions and organizations that need to process large batches of AVS checks every day – large financial institutions, such as banks, all automate their AVS checks using APIs.</span></p><p>By automating intensive administrative tasks, the automation of KYC checks frees up valuable human resources and enables their energy to be better spent elsewhere in the business. The automation of identity verification tasks, therefore, not only saves time and money by creating efficient digital processes, but also creates value by freeing up invaluable human capital within the organization.&nbsp;</p><h2><b>Bank Account Verification Services (AVS) Checks for Individuals&nbsp;</b></h2><p>AVS checks are often conducted by businesses on individuals. For example, a financial institution will need to verify the legitimacy of an individual’s bank accounts before approving them for a loan and deposing the borrowed money.&nbsp;</p><p>AVS checks can confirm that a bank account is valid, verify the identity of the account owner, and confirm important information such as bank account type. &nbsp;&nbsp;</p><p>AVS checks on individuals are often used during the customer onboarding process as a routine KYC check. AVS checks for individuals are also used for routine customer due diligence monitoring, such as when a customer opens new accounts or exhibits suspicious behaviour.&nbsp;</p><h2><b>Account Verification Services (AVS) Checks for Companies, Trusts, and NGOs</b></h2><p>AVS checks are also used by businesses to assess and verify the legitimacy and integrity of other business partners such as companies, trusts and non-governmental organizations (NGOs).&nbsp;</p><p>Although the concept of the AVS remains the same, in this context, the AVS will verify bank accounts that are linked to a corporate entity, not an individual.</p><p>In practice, this means that an AVS check will assess and confirm the legitimacy of a company’s bank account using the bank number provided. An AVS check will return a selection of information, which may vary depending on whether the entity in question is a company, trust, or NGO.</p><h2><b>List of Participating Banks&nbsp;</b></h2><p>ThisIsMe's AVS Solution provides comprehensive coverage for South African bank accounts that ensures accurate and up-to-date results, every time.</p><p>For AVS Realtime, our solution covers the following banks:&nbsp;</p><ul><li>ABSA&nbsp;</li><li>First National Bank (FNB)</li><li>Rank Merchant Bank (RMB)</li><li>Nedbank&nbsp;</li><li>Standard Bank&nbsp;</li><li>Capitec Bank&nbsp;</li><li>African Bank&nbsp;</li><li>Investec Bank</li><li>Sasfin Bank&nbsp;</li><li>Discovery Bank&nbsp;</li><li>Grindrod Bank&nbsp;</li><li>Finbond Net 1</li><li>Tyme Bank&nbsp;</li><li>Unibank</li></ul><p>The following banks are supported for only AVS Batch:&nbsp;</p><ul><li>Mercantile Bank (Capitec Business)</li><li>Bidvest Bank</li><li>Access Bank</li></ul><h2><b>Account Verification Services South Africa</b></h2><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. By supplying high-quality tools like AVS checks, we empower businesses to verify identities, validate information, secure transactions, and mitigate risk. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Introduction to Account Verification Services and how it affects data validation, enhanced due diligence and risk assessment services in South Africa

Account Verification Service (AVS)

<h2><b>What is Address Validation?&nbsp;</b></h2><p>Address verification is the process of validating an address associated with an individual or entity, such as a home or business address.&nbsp;</p><p>Address validation may be conducted for several reasons. The most common application of address verification is during the standard Know Your Customer (KYC) used when a business or financial institution verifies the identity of a new client during the customer onboarding process.&nbsp;</p><h2><b>Address Verification as a Know Your Customer (KYC) Check&nbsp;</b></h2><p>Know Your Customer (KYC) is a term that refers to procedures and mechanisms that are used to verify the identity of customers before conducting business with them.&nbsp;</p><p>When conducting KYC checks, a business will typically be verifying:</p><ul><li>That an individual exists&nbsp;</li><li>Whether that individual is exactly who they claim to be&nbsp;</li><li>Whether that individual is eligible to receive the product or service in question&nbsp;</li><li>Whether that individual poses a threat of money laundering or other such crime</li><li>Address verification often forms part of the selection of KYC checks that businesses run on their customers – examples include a bank requiring proof of residence before they can approve a client’s loan request.&nbsp;</li></ul><p><span style="font-size: 0.8125rem;">Address verification, therefore, forms a crucial part of helping a business to verify that an individual is who they claim to be and that all the information associated with them is correct.&nbsp;</span></p><h2><b>Online Address Verification&nbsp;</b></h2><p>The rise of online identity verification and data validation tools has revolutionized identity verification and data validation systems.&nbsp;</p><p>Online tools enable highly efficient, accurate and cost-effective means for identity verification and data validation. Today, online identity verification leverages powerful technologies like biometric information and artificial intelligence to deliver incredibly accurate and reliable identity verification.&nbsp;</p><p>Online identity verification allows for the verification of remote individuals – clients and individuals on the other side of the world can easily verify themselves, while businesses have the capacity to efficiently verify new clients, customers and employees in a seamless remote-onboarding process.&nbsp;</p><p>Furthermore, the personal information necessary for the verification of an individual’s identity can be pulled from a variety of trusted and secure sources, thereby increasing the reliability of the verification.&nbsp;</p><h2><b>Why is Address Verification Important?&nbsp;</b></h2><p>Businesses, financial institutions and organizations will typically conduct address verification checks because they are legally required to do so by a country’s national regulator. For example, in South Africa, any business, financial institution or organization that is designated as an Accountable Institution (AI) by the Financial Intelligence Centre (FIC) is legally bound by a range of regulatory compliance obligations.</p><p>These regulatory compliance obligations form a critical part of a country’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) obligations, which hold businesses legally accountable for taking steps to combat the threat of money laundering by, for example, verifying identities of the clients they do business with. Address verification checks may also be used in instances that require an enhanced degree of risk assessment and risk mitigation – examples include the processing of Politically Exposed Persons (PEPS).&nbsp;</p><p>Notably, it may be in a business’s best interests to conduct risk assessment and risk mitigation procedures above and beyond what is required by a regulator. Address verification acts as a screening process that helps ensure a business only onboards new clients that are legitimate, thereby shielding the business from malicious actors who seek to commit fraud or engage in criminal acts that have the potential to harm the business by proxy.&nbsp;</p><h2><b>Address Verification During Customer Onboarding and Employee Onboarding &nbsp;</b></h2><p>Address verification is a relatively common tool for identity verification within the customer onboarding process, although its application will vary depending on the business and product in question. Oftentimes, however, a business is legally obligated to verify the personal information of their clients before conducting business with them, which may entail a legal requirement to verify the individual’s associated addresses.&nbsp;</p><p>For employee onboarding, the verification of employee information, such as associated addresses, is a good method by which a business can test the integrity of an employee and ensure that they are not fraudulent. Employees who provide false information during the application process pose a significantly higher risk of being malicious and committing occupational fraud in the future, so validating the information supplied by employees is a good way to better verify the integrity of a prospective employee.&nbsp;</p><p>Whatever the reason for or application of an address verification check, there are several means by which a business can conduct such a check and even seamlessly integrate them into their customer and employee onboarding processes, with the capacity to easily automate the process through the seamless integration of an API.&nbsp;</p><h2><b>API for Automated Address Verification&nbsp;</b></h2><p>Application Programming Interfaces (APIs) can be understood as mechanisms that enable two or more software components to communicate with each other using established protocols and definitions.&nbsp;</p><p>In the context of identity verification and data validation – such as the address verification process – an API enables a business to build the necessary software into the relevant customer and employee onboarding processes, thereby ensuring a seamless and efficient verification process.&nbsp;</p><p>APIs are a perfect tool for those businesses and institutions that demand the capacity to process vast amounts of address verification requests simultaneously and quickly. APIs empower these businesses to streamline their address verification requirements by building them into an automated process that can automatically conduct the necessary checks, completing the entire process in an automated and digital manner.&nbsp;</p><p>By automating intensive administrative tasks, the automation of such checks frees up valuable human resources and enables their energy to be better spent elsewhere in the business. The automation of identity verification tasks, therefore, not only saves time and money by creating efficient digital processes, but also creates value by freeing up invaluable human capital within the organization.&nbsp;</p><p>ThisIsMe’s advanced API offerings give businesses the tools they need to seamlessly integrate advanced identity verification and information validation tools, while still maintaining the highest standards for customer experience.&nbsp;</p><p>For businesses, institutions and organizations that process smaller amounts of requests and do not require the integration of an API to meet their demands, ThisIsMe’s Partners Platform provides access to our solutions on a subscription or pay-as-you-go basis. This ensures that our suite of world-class solutions remains accessible to clients of all sizes and at all price points.&nbsp;</p><h2><b>Online Address Verification Services South Africa</b></h2><p>ThisIsMe is proud to offer a leading solution for online address verification. Our address validation service only requires an individual’s Identity Document (ID) number and will return a list of addresses associated with that number, while the Address Lookup Plus will return a list of addresses associated with an ID number and a map of its associated location. &nbsp;</p><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. We offer a wide range of FICA-compliant KYC services that encompass politically exposed person checks, account verification services, and company sanction and credit checks. To experience our full suite of due diligence solutions and see how we can help your business verify client information and meet its AML/CFT regulatory obligations, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.</p><p><br></p>

Overview of address verification and how it ties into KYC, identity verification, data validation and remote onboarding services in South Africa

Address Verification

<h2><b>What is Adverse Media?&nbsp;</b></h2><p>Adverse media can be understood as undesirable or negative information regarding an individual/legal entity that is discovered across a variety of sources.&nbsp;</p><p>An example of adverse media could be news articles reporting on a large corporation’s involvement in a corruption scandal.&nbsp;</p><p>An adverse media check is a “scan” used to detect such undesirable or negative information. If done correctly, an adverse media check can reveal a party’s involvement or complicity in serious events such as corporate fraud, political corruption and organized crime.&nbsp;</p><p>Adverse media checks are often conducted in conjunction with sanctions checks and will therefore form part of a company’s risk mitigation strategy and AML/CFT regulatory compliance framework.&nbsp;</p><h2><b>Why Adverse Media Checks are Important&nbsp;</b></h2><p>Failing to scan for adverse media before doing business with a client is often regarded as bad risk management and can have serious consequences.&nbsp;</p><p>If an adverse media check is not conducted and negative information on a client is only discovered once a business relationship has begun, it may have serious consequences for the unknowing business.&nbsp;</p><p>At worst, failure to conduct an adverse media check can get a business associated with or involved in economic crimes such as money laundering, corruption, racketeering, or political scandals. In such instances, the unknowing business not only risks exposing itself to serious public scandals that can destroy its reputation but could even implicate the business in criminal activities.&nbsp;</p><p>If an adverse media check reveals adverse media on a client, it is up to the business to decide how it proceeds depending on its risk management strategy.</p><h2><b>Examples of Adverse Media&nbsp;</b></h2><p>Adverse media can come in different forms and from different sources.&nbsp;</p><ol><li>Traditional News Media: articles found in traditional media sources such as reputable media agencies, broadcasters and newspapers, e.g., a reputable investigative news report on businesses implicated in child labour practices.&nbsp;</li><li>International Databases: information published by legal institutions and global organizations, e.g., a company that features in public court records of a corruption lawsuit.&nbsp;</li><li>Online Articles, Publications and Blogs: content published by websites that comment on pertinent issues such as corruption, fraud and money laundering, e.g., a company that features on a watchlist curated by a multinational anti-corruption NGO.&nbsp;</li></ol><h2><b>Adverse Media Checks as Part of the Know Your Customer (KYC) Process</b></h2><p>Know Your Customer (KYC) is a term that refers to procedures and mechanisms that are used to verify the identity of individuals/customers before conducting business with them.&nbsp;</p><p><span style="font-size: 0.8125rem;">When conducting KYC checks, a financial institution will typically be verifying:</span><br></p><ul><li>That an individual exists&nbsp;</li><li>Whether that individual is exactly who they claim to be&nbsp;</li><li>Whether that individual is eligible to receive the product or service in question&nbsp;</li><li>Whether that individual poses a threat of money laundering or other such crime</li></ul><p>Although not always conducted as part of the KYC process, adverse media checks play a critical role in helping a business to gather additional information about a client to assess and mitigate risk.&nbsp;</p><h2><b>Online Adverse Media Checks&nbsp;</b></h2><p>Today, all KYC and Enhanced Due Diligence (EDD) services are available online. Online tools, such as adverse media checks, enable highly efficient, accurate and cost-effective due diligence solutions that can be completely automated and easily integrated into a digital customer onboarding process.&nbsp;</p><p>For clients that need to conduct a significant number of adverse media checks as part of their customer onboarding process, advanced APIs enable the automation and seamless integration of such checks into a world-class customer onboarding process. For businesses that process lower volumes of due diligence requests related to identity verification and data validation</p><p>ThisIsMe offers a comprehensive range of due diligence solutions for adverse media and sanctions checks. For businesses that need to process a significant number of due diligence requests, our advanced API enables the seamless automation of the process and creates value by taking the pressure off human resources. For businesses that process a lower number of requests, our online Partners platform provides cost-effective access to our suite of world-class solutions on either a subscription or pay-as-you-go basis.&nbsp;</p><p>To find out how we can help your business seamlessly meet its due diligence requirements, contact our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p><h2><b>Adverse Media in a Risk-Based Approach (RBA)</b></h2><p>South Africa employs a Risk-Based Approach (RBA) for its AML/CFT legislation. This means that any business, institution or organization designated as an Accountable Institution (AI) by the Financial Intelligence Centre Amendment Act (FICA) has to create its own AML/CFT protocols and risk management strategy to ensure its regulatory compliance. Consequently, the exact systems and protocols employed by an AI will vary depending on its specific risk management strategy.&nbsp;</p><p>Adverse media checks will often form part of an AI’s risk management strategy for higher-risk clients, such as Politically Exposed Persons (PEPs). When a client is identified as a PEP, an AI will typically run an adverse media check to further assess risk and the potential need for greater risk mitigation protocols.</p><h2><b>Adverse Media Checks for Ongoing Monitoring&nbsp;</b></h2><p>A comprehensive risk management strategy will include a process of ongoing monitoring that repeatedly checks for adverse media on clients that represent a high level of risk for a business or institution. Ongoing monitoring is important for adverse media checks, politically exposed persons and sanctions alike, with ongoing monitoring for PEPs and sanctions sometimes being a legal regulatory requirement.&nbsp;</p><h2><b>Difference Between Adverse Media, Politically Exposed Persons and Sanctions Checks&nbsp;</b></h2><p>There are numerous ways that a customer/client can pose a threat to a business. Such threats are varied and range from reputational risks all the way to clients with whom a business relationship could pose an existential threat to the business partner.&nbsp;</p><p>As discussed, adverse media is primarily a reputational threat and will form part of a risk management strategy aimed to mitigate the risk that a business will become embroiled in a public or legal scandal, as well as ensuring that the business does not find itself complicit in a financial crime due to close associations with a client that is implicated in one or more financial crimes. &nbsp;</p><p>On the other hand, a Politically Exposed Person (PEP) is someone who currently holds or has held political power and therefore represents a heightened risk of financial crimes such as money laundering. Consequently, various businesses and financial institutions are required to verify whether an individual is a PEP before conducting business with them. If an individual is identified as a PEP, that business/financial institution must conduct enhanced due diligence procedures to mitigate the risk they pose. The verification of an individual’s PEP status is legally required in South Africa which forms a crucial part of the country’s AML/CFT legislation.&nbsp;</p><p><span style="font-size: 0.8125rem;">Finally, sanctions represent one of the most serious threats to a business and can lead to severe financial penalties, prison time and the risk of being placed under sanction oneself. Like with PEP checks, sanctions screening is a legal requirement for many financial institutions in South Africa. It is therefore imperative that a business conducts the appropriate sanctions screening to ensure that it does not breach sanctions law and expose itself to existential risk.&nbsp;</span></p><p>To find out how ThisIsMe can help your business scan for adverse media, politically exposed persons and sanctions, contact our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p><h2><b>Sanctions Scanning and Adverse Media Checks South Africa&nbsp;</b></h2><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. We offer a wide range of FICA-compliant KYC services that encompass politically exposed person checks, account verification services, and company sanction and credit checks. To experience our full suite of due diligence solutions and see how we can help your business meet its AML/CFT regulatory obligations, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.</p>

Adverse media definition and how it ties into KYC, identity verification, risk assessment and enhanced due diligence services in South Africa

Adverse Media

<h2><b>What is Age Verification?&nbsp;</b></h2><p>Age verification is the process by which a business establishes and verifies the age of an individual.&nbsp;</p><p>In many instances, knowing the age of a customer can be crucial information for a business.&nbsp;</p><p>The most common application of age verification is during the standard Know Your Customer (KYC) process that occurs when a business or financial institution verifies the identity of a new client during the customer onboarding process.&nbsp;</p><p>While age verification is a legal obligation for certain businesses, it is also voluntarily used as a tool for risk assessment and risk mitigation.&nbsp;</p><h2><b>Age Verification as a KYC Check&nbsp;</b></h2><p>Know Your Customer (KYC) is a term that refers to procedures and mechanisms that are used to verify the identity of customers before conducting business with them.&nbsp;</p><p>When conducting KYC checks, a business will typically be verifying:</p><ul><li>That an individual exists&nbsp;</li><li>Whether that individual is exactly who they claim to be&nbsp;</li><li>Whether that individual is eligible to receive the product or service in question&nbsp;</li><li>Whether that individual poses a threat of money laundering or other such crime</li></ul><p>Age verification often forms part of the selection of KYC checks that businesses run on their customers – examples include a bank requiring proof of residence before they can approve a client’s loan request.&nbsp;</p><p>Age verification, therefore, forms a crucial part of helping a business to verify that an individual is who they claim to be and that all the information associated with them is correct.&nbsp;</p><h2><b>Online Age Verification</b></h2><p>Today, online age verification services have transformed identity verification and data validation.&nbsp;</p><p>Online solutions for age verification enable highly efficient, accurate and cost-effective means for age verification and other KYC checks that leverage powerful technologies like biometric information and artificial intelligence to deliver incredibly accurate and reliable identity verification.&nbsp;</p><p>Online identity verification allows for the verification of remote individuals – clients and individuals on the other side of the world can easily verify themselves, while businesses have the capacity to efficiently verify new clients, customers and employees in a seamless remote-onboarding process.&nbsp;</p><p>Furthermore, the personal information necessary for the verification of an individual’s identity can be pulled from a variety of trusted and secure sources, thereby increasing the reliability of the verification.&nbsp;</p><h2><b>Who Needs to Conduct Age Verification Checks?&nbsp;</b></h2><p>Many financial institutions are legally obligated to verify the age of their clients before doing business with them. In South Africa, businesses designated as Accountable Institutions (AIs) must comply with a range of regulatory compliance obligations designed to promote good financial practice and mitigate against the risk of financial crime – the verification of client age is one such regulatory obligation and falls within the general sphere of KYC obligations. &nbsp;</p><p>Some businesses verify the age of their customers due to the age-restricted nature of their products or services – sports betting companies are legally required to verify that their customers are above the legal age limit before they are allowed to grant the customer access to the service.&nbsp;</p><p><span style="font-size: 0.8125rem;">Other businesses verify the age of their clients as a form of risk management. For example, a car rental company may wish to verify the age of potential clients in order to account for the variance in risk presented by different age groups.</span><br></p><h2><b style="font-size: 1.4375rem; letter-spacing: -0.015em;"><font color="#000000">Why is Age Verification Important?&nbsp;</font></b></h2><p>Age verification is an important tool for risk assessment and risk mitigation. By verifying the age of a customer, a business can generate a more comprehensive risk profile of that customer, thereby empowering the business to better mitigate that risk. For example, car rental companies use age verification to assess the risk profile of their customers – young males will be charged significantly higher rental rates because their gender-specific age bracket poses a high risk to the car rental company.&nbsp;</p><p>In these instances, age verification is important because customers can seldom be expected to be honest, especially not when honesty means that they will be obliged to pay more for a service. Therefore, if a business wishes to accurately assess and mitigate risk, the business must take steps to reliably verify the age of the customer.&nbsp;</p><h2><b>Age Verification API&nbsp;</b></h2><p>Application Programming Interfaces (APIs) can be understood as mechanisms that enable two or more software components to communicate with each other using established protocols and definitions.&nbsp;</p><p>In the context of identity verification and data validation – such as the age verification process – an API enables a business to build the necessary software into the relevant customer and employee onboarding processes, thereby ensuring a seamless and efficient verification process.&nbsp;</p><p><span style="font-size: 0.8125rem;">APIs are a perfect tool for those businesses and institutions that demand the capacity to process vast amounts of address verification requests simultaneously and quickly. APIs enable these businesses to streamline their address verification requirements by building them into an automated process that can automatically conduct the necessary checks, completing the entire process in an automated and digital manner.&nbsp;</span><br></p><p>By automating intensive administrative tasks, the automation of KYC checks frees up valuable human resources and enables their energy to be better spent elsewhere in the business. The automation of identity verification tasks, therefore, not only saves time and money by creating efficient digital processes, but also creates value by freeing up invaluable human capital within the organization.&nbsp;</p><p>ThisIsMe’s advanced API offerings give businesses the tools they need to seamlessly integrate advanced identity verification and information validation tools, while still maintaining the highest standards for customer experience.&nbsp;</p><p>For businesses, institutions and organizations that process smaller amounts of requests and do not require the integration of an API to meet their demands, ThisIsMe’s Partners Platform provides access to our solutions on a subscription or pay-as-you-go basis. This ensures that our suite of world-class solutions remains accessible to clients of all sizes and at all price points.&nbsp;</p><h2><b>Online Age and Identity Verification Services South Africa&nbsp;</b></h2><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. We offer a wide range of FICA-compliant KYC services that encompass age verification checks, politically exposed person checks, account verification services, and company sanction and credit checks.&nbsp;</p><p>To experience our full suite of due diligence solutions and see how we can help your business verify client information and meet its AML/CFT regulatory obligations, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.</p>

Overview of age verification and how it ties into KYC, identity verification, data validation and remote onboarding services in South Africa

Age Verification

<h2><b>What are AML/CFT Regulations?</b></h2><p>AML stands for Anti-Money Laundering, while CFT stands for Countering the Financing of Terrorism. Because these two concepts are alike in several ways, they are often grouped together under the umbrella term AML/CFT.&nbsp;</p><p>AML/CFT is a broad concept that refers to the laws and regulations governing how financial institutions must interact with their clients in such a way that actively addresses the threat of money laundering and terrorist financing.&nbsp;</p><h2><b>What is Anti-Money Laundering (AML)?&nbsp;</b></h2><p>Money laundering refers to the “cleaning” of criminal revenue to disguise its illegal source and facilitate its use in legitimate, everyday activities. Without money laundering, it would be impossible for criminals to spend the money they earn through criminal activity. Consequently, money laundering enables criminal activity by facilitating its profitability, continued operation and expansion.&nbsp;</p><p>The term Anti-Money Laundering (AML) encompasses the vast array of laws, regulations and policies that are created and implemented to combat money laundering and other associated types of financial crime. Ultimately, these laws aim to make it impossible to make use of any revenues gained from criminal activities.&nbsp;</p><h2><b>What is Countering the Financing of Terrorism (CFT)?&nbsp;</b></h2><p>The financing of terrorism refers to the flow of capital required by terrorist organizations to buy and maintain weapons and physical assets, recruit and train new members, and plan and coordinate strategies.&nbsp;</p><p>Countering the Financing of Terrorism (CFT) refers to the laws and regulations that are created and implemented to curb the financing of terrorist groups and terrorist activities. By helping to detect, track and monitor transactions linked with terrorist organizations, CFT has also played a direct role in the global fight against terrorism by effectively aiding investigations into terrorist organizations and helping to cut off sources of funding for terrorist groups.&nbsp;</p><h2><b>AML/CFT Laws and Regulations in South Africa&nbsp;</b></h2><p>In South Africa, AML/CFT legislation is overseen by the national regulator, the Financial Intelligence Centre (FIC). &nbsp;</p><p>South Africa’s primary anti-money laundering law is the Financial Intelligence Centre Act, 38 of 2001 (commonly known as FICA). Together with FICA, the Prevention of Organized Crime Act (POCA) and the Prevention and Combatting of Corrupt Activities Act (PRECCA) form the bedrock of South Africa’s AML legislation.&nbsp;</p><p>FICA requires businesses that are identified as Accountable Institutions (AIs) to comply with a wide range of regulatory requirements that cover due diligence, record-keeping, reporting of information to the Financial Intelligence Centre and internal compliance governance.&nbsp;</p><h2><b>AML and the Risk-Based Approach (RBA)</b></h2><p>Because South Africa operates a Risk-Based Approach (RBA) to money laundering regulation, it is the responsibility of the Accountable Institution (AI) to identify risks and take the necessary steps to mitigate those risks. Once the AI has finalized its risk management strategy, it will be presented to the Financial Intelligence Center (FIC) for approval.&nbsp;</p><p><span style="font-size: 0.8125rem;">Because South Africa applies a risk-based approach, and because every business must create its own risk management strategies, exact compliance requirements will vary. This will depend on the AI’s categorization (e.g., asset manager or FOREX), as well as how securely an AI wishes to mitigate risk above and beyond what the FIC requires. &nbsp;</span><br></p><p>Sanction checks are some of the most common AML risk management and compliance solutions, as well as Know Your Client (KYC) protocols that require the identification and verification of individual identities.&nbsp;</p><p>ThisIsMe offers a wide range of world-class KYC, enhanced due diligence and remote-onboarding solutions. To experience our full suite of services and see how we can help your business ensure its regulatory compliance, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.</p><h2><b>AML/CFT and Politically Exposed Persons (PEPs)</b></h2><p>Corruption has seriously undermined national AML/CFT agencies. In their report on South Africa’s AML/CFT measures, the Financial Action Task Force noted how badly the State Capture saga had undermined the country’s anti-money laundering agencies. Pervasive corruption alienates policy makers, impairs prosecution, and stifles efforts to create and enact new AML/CFT legislation. If sufficient AML laws do get passed, underfunded and ill-trained police forces are often unable to enforce them. Nevertheless, there is immense value in laws that place additional scrutiny on Politically Exposed Persons (PEPs).&nbsp;</p><p>South Africa broadly defines a PEP as any individual who is, or has in the past, been entrusted with prominent public functions in a particular country. Due to the interwoven nature of politics and private capital, PEPs are seen to pose a greater threat of corruption and represent an increased money-laundering risk.&nbsp;</p><p>To account for this heightened risk, PEPs are subjected to enhanced due diligence and KYC procedures that are designed to scrutinize the connections between a PEP’s political power and their financial transactions. The goal is to make it as hard as possible for PEPs to abuse their power and be corrupt.&nbsp;</p><h2><b>AML/CFT Screening Process and Monitoring&nbsp;</b></h2><p>AML screening refers to the processes employed by an accountable institution that analyses clients and assesses their associated risk for financial crimes such as money laundering. The screening process is employed to check whether a client is, for example, featured on a sanction list or is a politically exposed person (PEP).&nbsp;</p><p><span style="font-size: 0.8125rem;">The exact regulatory requirements will vary depending on a wide variety of factors (e.g., the specific country in question as well as the categorization of the business/institution/organization). However, there are several protocols and mechanisms for AML/CFT screening that are commonplace. They are:&nbsp;</span><br></p><ul><li><b>Identity Verification: </b>All money laundering screening processes will entail some degree of identity verification. These checks ensure that an institution knows exactly who a client is before conducting business with them.&nbsp;</li><li><b>Enhanced Due Diligence:</b> In some cases, individuals/entities that represent a higher risk of money laundering (such as politically exposed persons) will be subjected to heightened levels of due diligence.&nbsp;</li><li><b>Ongoing Monitoring: </b>In some instances, individuals and/or entities may pose a high enough AML/CFT risk to justify their continued monitoring by the AI. For example, individuals and businesses with a high degree of political exposure are legally required to be subjected to ongoing monitoring designed to ensure the continued legitimacy of their transactions. &nbsp;</li><li><b>AML/CFT Risk Management and Mitigation: </b>An Accountable Institution (AI) is obligated to mitigate any AML/CFT risks that may arise during the initial screening process, as well as any risks that may arise long after the client has been screened. For example, if a client cannot be verified, an accountable institution cannot simply let them proceed – instead, the AI must take the necessary steps to mitigate the AML/CFT risk posed by that individual, such as restricting them from opening an account and conducting financial transactions. Or, in another instance, if ongoing monitoring of a client suddenly reveals highly suspicious transactions, it is the obligation of the AI to deal with the situation in such a way that aligns with regulatory requirements and successfully mitigates the associated risk.&nbsp;</li></ul><h2><b>Online AML Screening and Compliance Solutions</b></h2><p>Today, the AML screening process has been completely automated. Companies can seamlessly integrate their AML screening process using advanced APIs that can easily conduct advanced screening protocols and enhanced due diligence on individuals and entities alike.&nbsp;</p><p>Online AML screening protocols can instantly cross-check an identity against a vast number of databases and watchlists and return results in only minutes, thereby ensuring that businesses can efficiently conduct world-class AML screening at a moment’s notice.&nbsp;</p><p>In addition to their speed and ease of use, online/digital solutions for AML compliance have made such protocols far more accessible by drastically lowering their costs and allowing for the creation of solutions designed to fit a wide variety of needs.&nbsp;</p><p>To find out more about how ThisIsMe can help your business easily meet its AML compliance obligations, contact our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p><h2><b>Penalties for Non-Compliance with AML/CFT Regulations</b>&nbsp;</h2><p>Across the world, government regulators impose penalties for non-compliance with AML/CFT regulations. These penalties vary in severity depending on a number of factors, including the degree of non-compliance and whether or not that non-compliance facilitated any criminal activity.&nbsp;</p><p><span style="font-size: 0.8125rem;">In South Africa, penalties for non-compliance are serious and can lead to the handing out of fines and even jail time, although the severity of the punishment will depend highly on the severity of the specific incident of non-compliance. &nbsp;</span><br></p><h2><b>Global AML Policy Guidelines&nbsp;</b></h2><p>The Financial Action Task Force is a leading intergovernmental organization founded to develop policies to combat money laundering. These policies are known as the FATF 40 Recommendations and are widely regarded as the global standard for anti-money laundering policy.&nbsp;</p><p>South Africa has been a FATF member since 2003. Recently, in October 2021, the FATF released its Mutual Evaluation Report. The report evaluated South Africa’s AML/CFT practices, analyzed South Africa’s compliance with the FATF 40 Recommendations, criticized shortcomings and inconstancies, and provided valuable recommendations regarding how the country’s current systems can be strengthened.&nbsp;</p><p>In addition to being an FATF member, South Africa is part of the Eastern and Southern African Anti-Money Laundering Group (ESAAMLG) – a regional body of the FATF which that supports countries in the region to implement the global AML/CFT standards. Although global bodies like the FATF provide great authority, regional bodies like the ESAAMLG are greatly valuable in their ability to help countries share resources and expertise in a bid to overcome mutual problems.&nbsp;</p><p>For example, many developing nations share the challenge of regulating large, informal, cash-based economies, which can easily conceal illicit transactions and harbor money laundering. South Africa is no different. The cash-based nature of these economies also makes it difficult to implement and enforce globally accepted AML policies. However, the rapid development of accessible digital banking services presents an opportunity to help secure and regulate these economies to protect against money laundering.&nbsp;</p><h2><b>AML/CFT Compliance Solutions in South Africa</b>&nbsp;</h2><p>Although the fight against financial crime is generally spearheaded by government agencies and regulators, the private sector also has a vital role to play in combating financial crime. Compliance with laws and regulations, coupled with proper risk management and enhanced due diligence procedures, hold the key to an economy in which transactional trust is the norm, not the privileged exception.&nbsp;</p><p><span style="font-size: 0.8125rem;">As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. We offer a wide range of FICA-compliant KYC services that encompass politically exposed person checks, account verification services, and company sanction and credit checks. To experience our full suite of due diligence solutions and see how we can help your business meet its AML/CFT regulatory obligations, book a demonstration by contacting our team </span><a href="https://thisisme.com/contact-us" target="_blank" style="font-size: 0.8125rem;">here</a><span style="font-size: 0.8125rem;">.</span><br></p>

Introduction to AML/CFT regulations and discussion about KYC, enhanced due diligence and AML/CFT regulatory compliance services in South Africa

AML/CFT Regulations

<h2><b>What is Money Laundering (ML)?&nbsp;</b></h2><p>Money laundering refers to the “cleaning” of criminal revenue to disguise its illegal source and facilitate its use in legitimate, everyday activities. Without money laundering, it would be impossible for criminals to spend the money they earn through criminal activity. Consequently, money laundering enables criminal activity by facilitating its profitability, continued operation, and expansion.&nbsp;</p><p>The scale of money laundering is immense. A 2020 report by Deloitte estimated that money laundering makes up 2-5% of the global GDP (as much as $2 trillion). Accordingly, money laundering is regarded as a major financial crime – although punishments vary across nations, penalties are always serious and being found guilty on serious charges can lead to long-term prison sentences.&nbsp;</p><p>The larger the proceeds from a crime, the greater the incentive is to launder those proceeds because it becomes hard to spend large amounts of undeclared money without drawing the attention of tax authorities and law enforcement agencies.&nbsp;</p><p>Accordingly, although money laundering is committed to “clean” the money generated by petty crimes, money laundering is essential for the operation of large and sophisticated organized criminal groups. Illegal arms sales, embezzlement schemes, prostitution rings and drug trafficking operations all depend on money laundering for their profitability and continued operation. Evidently, money laundering is not a victimless crime.</p><h2><b>What is Anti-Money Laundering (AML)?</b></h2><p>Anti-Money Laundering (AML) is a broad term that encompasses the vast array of laws, regulations and policies that are created and implemented to combat money laundering and other associated types of financial crime. Ultimately, these laws aim to make it impossible to make use of any revenues generated by criminal activities.&nbsp;</p><p>AML can play an active and essential role in crime fighting and the prosecution of criminals and criminal organizations. During the investigation and prosecution of criminal activity by law enforcement, it is often the connections made through financial transactions that provide the evidence necessary to identify hidden assets, establish the identity of criminals, and link criminal activity to larger organizations.&nbsp;</p><p>Because money laundering is such a major financial crime, there are global institutions and organizations dedicated solely to creating legislative guidelines for AML policy, as well as both domestic and international law enforcement agencies that specialize in the investigation and prosecution of money laundering.&nbsp;</p><p>AML legislation, therefore, exists to stamp out the criminal activities that are enabled and sustained by the practice of money laundering.&nbsp;</p><h2><b>What is AML/CFT?</b>&nbsp;</h2><p>The financing of terrorism is most often done using laundered money that has been generated through criminal activity. Because it is laundered money that most commonly funds terrorism, Anti-Money Laundering (AML) legislation is typically grouped with Countering the Financing of Terrorism (CFT) legislation.&nbsp;</p><p>Due to the similar ways in which money laundering and terrorism financing are addressed, the legislation created to address the two issues are generally grouped into the same regulatory portfolio and enforced by the same national regulator.</p><p>To read more about AML/CFT laws and the strict regulatory compliance obligations for businesses, institutions and organizations, click here. &nbsp;</p><h2><b>AML/CFT Compliance Solutions in South Africa &nbsp;</b></h2><p>Although there are universally recognized guidelines for AML/CFT regulations, every country typically has their own set of regulatory requirements that govern how businesses, institutions and organizations in that specific country must conduct business with their customers.&nbsp;</p><p>When doing business in a country and ensuring compliance with its complex financial regulations, it is important to employ experts in the relevant country who are best equipped to operate within the nexus of legislation, law enforcement and economic realities while delivering high-quality and cost-effective services. &nbsp;</p><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p><div><br></div>

Anti-Money Laundering (AML) definition and discussion about KYC, enhanced due diligence and AML/CFT regulatory compliance services in South Africa

Anti-Money Laundering (AML)

<h2><b>What is an Application Programming Interface (API)?&nbsp;</b></h2><p>Application Programming Interfaces (APIs) are mechanisms that enable two or more software components to communicate with each other using established protocols and definitions.&nbsp;</p><p>Within the context of an API, the term “application” refers to any software that has a distinct function, such as verifying the legitimacy of an identity document. The term “interface” can be understood as a contract/agreement between two or more applications that define how those applications work together and communicate.&nbsp;</p><h2><b>Why are APIs so Useful?&nbsp;</b></h2><p>An API is an incredibly flexible tool that can be created and used to complete a wide variety of tasks. APIs can be customized to suit the exact needs of a client, thereby ensuring that a user is equipped with an API tailored to meet their exact needs.&nbsp;</p><p>Furthermore, by integrating an API, a user can automate processes that may previously have required an employee to sit and labouriously conduct the process manually, wasting time and resources in the process. In such a context, the use of an API creates value within the company by freeing up employees whose skills can be better spent elsewhere in the company.&nbsp;</p><p><span style="font-size: 0.8125rem;">APIs are especially useful for the processing of significant amounts of requests and the management of large batches of data. For example, banks employ dozens of APIs due to the sheer scale of the service requests and data validation that such institutions need to process on an hourly basis.&nbsp;</span><br></p><p>The following use cases best show APIs can be used to automate tasks related to identity verification, enhanced due diligence, digital onboarding, information validation and risk assessment.&nbsp;</p><h2><b>API for Automated Identity Verification&nbsp;</b></h2><p>Identity verification – a process that has the potential to be slow, inefficient and costly – has been revolutionized by smart technologies and the integration of APIs.&nbsp;</p><p>APIs empower businesses to automate all these processes and ensure that they are not only carried out seamlessly, but also extremely quickly – today, the verification of customer identities takes only minutes and is effortless for the customer.&nbsp;</p><p><span style="font-size: 0.8125rem;">Large financial institutions such as banks and insurance companies will need to make use of APIs due to the sheer number of identity verification requests that need to be carried out. For example, every time a customer applies for a credit card or requests a new insurance policy, the identity of that customer needs to be verified. Identity verification on such a scale is only feasible with the usage of APIs.&nbsp;</span><br></p><h2><b>API for Customer Digital Onboarding</b>&nbsp;</h2><p>Onboarding is one of the most important parts of the customer journey. Because sign-up is one of the customer’s first experiences with the company, a bad onboarding process can turn the customer away and lose their business.&nbsp;</p><p>More intensive customer onboarding processes – such as those that require identity verification and data validation – have the potential to be arduous, inefficient, and frustrating. It is in these circumstances that APIs offer the greatest value for customer onboarding.&nbsp;</p><p>By enabling the digitalization of the customer onboarding process, APIs enable customers to submit all the documentation necessary for the verification of their identity from the comfort of their home, as well as receive the verification of their identity in a matter of minutes. This not only saves the business time and money, but also offers a world-class customer experience and ensures high levels of customer satisfaction.&nbsp;</p><h2><b>API for Employee Digital Onboarding&nbsp;</b></h2><p>APIs allow businesses to automate and seamlessly integrate these processes into their human resources departments.&nbsp;</p><p>Businesses with a high staff turnover – examples include large retail chains and manufacturing companies – need to easily and quickly vet and onboard new employees.&nbsp;</p><p>The integration of APIs allows this onboarding process to be conducted seamlessly, efficiently and cost-effectively. Whereas in the past this onboarding process may have required a large human resources department to manually process every new employee, the integration of APIs enables the entire process to be automated, thereby saving the business time and money and improving the experience for new employees.&nbsp;</p><h2><b>API for Information Validation&nbsp;</b></h2><p>Businesses can use APIs to automate and streamline information validation procedures. By using an API for information validation processes, businesses can reduce costs and streamline cumbersome administrative tasks such as client onboarding or the management of a customer base, while still maintaining the highest standards for data accuracy, security, and customer experience. &nbsp;</p><h2><b>API for Risk Assessment&nbsp;</b></h2><p>By integrating an API, businesses can complement an effectively implemented risk-based approach and ensure the highest standards of regulatory compliance, all while reducing costs and streamlining workflows.&nbsp;</p><h2><b>Identity Verification Services South Africa</b></h2><p>As South Africa’s leading provider of world-class due diligence and digital-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. Our suite of enhanced due diligence services offers a wide array of identity verification, data validation, risk assessment and automated digital onboarding solutions.&nbsp;</p><p>To find out more about how ThisIsMe’s solutions and advanced API integration can serve your business, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Introduction to Application Programming Interfaces and how they automate KYC, identity verification and data validation services in South Africa

API (Application Programming Interface)

<h2><b>What is Beneficial Ownership?</b>&nbsp;</h2><p>Beneficial Ownership refers to the ownership structures of legal entities such as companies or trusts. When establishing beneficial ownership, one is establishing exactly which individual benefits from the privileges associated with ownership of a legal entity.&nbsp;</p><p>Sometimes, the actual owner of a company is not the same individual under whose name the company’s title is listed on paper. In other words, although the title for Company X may be under the name of Mr Allen, Company X may actually belong to Mrs James. In this case, Mrs James is the beneficial owner.&nbsp;</p><p>When an individual is a beneficial owner, they will enjoy many privileges associated with ownership even though the title to the property in question is under someone else’s name. For example, even though Company X is not under Mrs James’s name, Mrs James may nevertheless enjoy a significant share of managerial authority over Company X and take a sizeable share in its profits.&nbsp;</p><p>Establishing the beneficial ownership of an entity can be challenging. Ownership structures may be designed to be highly convoluted and complex – either legally or illegally so – for several reasons. It should be noted that beneficial ownership structures are legal, so long as they are explicitly declared.&nbsp;</p><p>When beneficial ownership structures are legally constructed, they are often done so to reduce unnecessary liability and increase convenience – for example, a bank or broker may hold the title of a trust or fund, for whom the beneficial owner is a high-net-worth individual.&nbsp;</p><p>When beneficial ownership structures are illegally constructed, they are most often done so for money laundering and tax evasion.&nbsp;</p><h2><b>Difference Between Beneficial Ownership Investigations and Know Your Business (KYB) Checks</b>&nbsp;</h2><p>Investigations of beneficial ownership structures are done to establish exactly which individual/group of individuals own a legal entity and enjoy the associated privileges of ownership.&nbsp;</p><p>Investigations into beneficial ownership structures may be conducted during events such as asset evaluations, corporate takeovers and criminal investigations. Beneficial ownership structures seldom directly affect the day-to-day transactional relationships that an entity has with its customers or suppliers.&nbsp;</p><p>KYB checks, on the other hand, refer to the day-to-day due diligence checks that are conducted to ensure that a business is legitimate and not malicious. In some instances, certain KYB checks are required by law, while at other times, KYB checks may be conducted at a business’s discretion as an effective means for risk assessment and risk mitigation.&nbsp;</p><p>Examples of KYB checks include the verification of associated bank accounts, routine credit checks, and sanction checks designed to ensure that a business is not under an international embargo.&nbsp;</p><h2><b>How to Conduct KYB and Due Diligence on Businesses in South Africa</b>&nbsp;</h2><p>In many situations, conducting due diligence checks on companies, institutions and organizations before conducting business with them is essential for assessing and mitigating risk, as well as ensuring regulatory compliance with a range of AML/CFT laws.&nbsp;</p><p>In most instances, these checks will classify as Know Your Business (KYB) checks. Much like Know Your Customer (KYC) checks, KYB protocols will be used to verify the identity of a legal entity and validate associated information to ensure its legitimacy and integrity.&nbsp;</p><p>There is a range of due diligence checks that may be conducted on a company…</p><ul><li><b>Business Registration Checks:</b> In South Africa, one can verify the identity of a company and validate crucial information by using the business’s registration number to pull data from the Companies and Intellectual Properties Commission (CIPC). This KYB check can be crucial for validating the legitimacy of all information associated with a company and verifying that the entity you are dealing with is exactly who they say they are.&nbsp;</li><li><b>Director Lookups:</b> If one wants to verify the identity of a company’s director, conducting a director lookup check will provide important identification information on the director in question.</li><li><b>Company Credit Checks: </b>As with individual customers, conducting a credit check on a company is crucial for ensuring not only that a business qualifies for a certain credit application, but also that the business is legitimate in the first place – a company’s credit profile can hold many clues as to the entity’s legitimacy and integrity.&nbsp;</li><li><b>AVS Checks:</b> Account Verification Services exist as a form of data validation that establishes the validity of a bank account – an essential check that is done before depositing money and conducting business with an entity.&nbsp;</li><li><b>Company Sanctions Check:</b> Sanction checks reveal whether a company is under international sanction/embargo. Any failure to conduct a sanctions check that then leads a business to illegally engage with a sanctioned entity can see severe penalties being imposed on the offending business. Consequently, sanctions checks are crucial for avoiding breaching international sanctions law and becoming embroiled in legal and public scandals.&nbsp;</li></ul><h2><b>Company Registration Checks, Director Lookups and Due Diligence Services for South Africa&nbsp;</b></h2><p>As South Africa’s leading provider of identity verification, due diligence and risk management solutions, ThisIsMe provides world-class KYB solutions that can help your business secure its transactions and verify whom it does business with. To experience our full suite of solutions and find out how we can empower your business with class-leading tools, contact our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Introduction to beneficial ownership and how it ties into identity verification, enhanced due diligence and risk assessment services in South Africa

Beneficial Ownership

<h2><b>What is Biometric Information?&nbsp;</b></h2><p>The concept of biometric information refers to data related to human measurements and characteristics. By measuring and gathering an individual’s measurements and characteristics as defined by their physical appearance, one can generate a dataset that is unique to them. This dataset is their biometric information.&nbsp;</p><h2><b>Biometrics for Identity Verification&nbsp;</b></h2><p>Biometric information is increasingly used for secure and highly reliable identity verification.&nbsp;</p><p>Because biometric information is generated by converting human measurements and characteristics – examples include fingerprints and facial features – into data that is readable by a computer, this data can be used to verify an individual’s identity by cross-checking their biometric information against a database.&nbsp;</p><p>Biometric technology greatly enhances the identity verification process by offering a means of identity verification that is quick, easy and streamlined. Accordingly, biometric information has sped up the verification process and enhanced it with a new layer of security.&nbsp;</p><h2><b>Facial Biometric Information&nbsp;</b></h2><p>A common form of biometric information is the use of live selfies to instantly verify a user – a process that uses instantly captures and processes that user’s facial biometrics.&nbsp;</p><p>The service scans a photograph/selfie and transforms facial features into digital biometric information. The information is then used to cross-check the photograph against a provided Identity Document or Passport, thereby confirming or invalidating the individual’s provided identity information.</p><p>For South African citizens, ThisIsMe offers an enhanced service that crosschecks a photograph and a given identity document against the digital image held by the DHA on the Home Affairs National Identification System (HANIS).</p><p><b style="font-size: 1.4375rem; letter-spacing: -0.015em;"><font color="#000000">Liveness Detection&nbsp;</font></b><br></p><p>Liveness detection is a technology designed to further secure the identity verification process by ensuring that the individual being verified is a real person.&nbsp;</p><p>Liveness detection uses an array of advanced technologies to detect the presence of a live user, as opposed to a fraudulent representation like a picture or a mask, or a fake video or hologram.&nbsp;</p><h2><b>What are the Advantages of Biometrics?</b>&nbsp;</h2><p>Biometric verifications offer an additional layer of security. By cross-checking a user’s facial biometric information against their identity information stored within national databases, facial biometric information offers the highest degree of real-time risk mitigation for businesses that engage with clients in a digital or face-to-face environment.&nbsp;</p><p>Furthermore, biometric identity verification can be brilliantly integrated into the customer onboarding process as a way of meeting regulatory compliance obligations in a way that is easy and stress-free for the customer.</p><p>This is important because as the customer’s first interaction with the business, the customer onboarding has the potential to make or break a future business relationship – a bad onboarding process can turn the customer away and lose their business.&nbsp;</p><p>Recognizing this, it can sometimes be difficult to conduct the necessary customer due diligence and ensure regulatory compliance without worsening the overall customer experience. In such circumstances, biometric identity verification is a tool that can be used to ensure the highest standards of accuracy and security while still ensuring that the customer onboarding process remains streamlined and effortless.&nbsp;</p><p>By using biometrics for identity verification within the customer onboarding process, a business can offer a streamlined and easy method for identification, thereby ensuring a world-class digital customer experience.&nbsp;</p><h2><b>Biometric Identity Verifications Solutions for South Africa&nbsp;</b></h2><p>As South Africa’s leading provider of world-class due diligence and digital-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. Our suite of enhanced due diligence services offers a wide array of identity verification, data validation, risk assessment and automated digital onboarding solutions. To find out more about how our identity verification services can enhance your business, contact our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Introduction to biometric information and how it enhances KYC, identity verification, data validation and remote onboarding services in South Africa

Biometric Information

<h2><b>What is Terrorist Financing (TF)?&nbsp;</b></h2><p>Terrorist financing is the use of funds to finance terrorist groups and/or terrorist activities.&nbsp;</p><p>More specifically, the financing of terrorism is a concept that encompasses the flow of capital required by terrorist organizations to buy and maintain weapons and physical assets, recruit and train new members, and plan and coordinate strategies.&nbsp;</p><p>The capital that finances terrorism is essential for the growth and operational effectiveness of terrorist organizations. If this flow of capital can be cut off, terrorist organizations lose the capacity to operate.&nbsp;</p><h2><b>What is Countering the Financing of Terrorism (CFT)?&nbsp;</b></h2><p>Countering the Financing of Terrorism (CFT) refers to the laws and regulations that are created and implemented to curb the financing of terrorist groups and terrorist activities.&nbsp;</p><p>Much of the capital used to finance terrorism is laundered money that has been generated through criminal activity. Accordingly, CFT is closely associated with Anti-Money Laundering (AML) legislation.&nbsp;</p><p>By helping to detect, track and monitor transactions linked with terrorist organizations, CFT has also played a direct role in the global fight against terrorism by effectively aiding investigations into terrorist organizations and helping to cut off sources of funding for terrorist groups.&nbsp;</p><p>For many governments, businesses and people around the world, CFT is not an abstract concept or a regulatory nuisance. In countries that are subjected to violent attacks from terrorist groups, CFT programs are a crucial part of the fight against terrorism. By disrupting the financial flows of terrorist organizations and undermining their capacity to carry out attacks, effective CFT programs play an active role in the preservation of life, peace, and security.&nbsp;</p><p>Over time, the ways in which terrorism is financed have grown increasingly complex. Today, terrorist organizations receive funding in complex cross-border money transfers, which demands that efforts to combat the financing of terrorism become increasingly complex and global in scope.&nbsp;</p><p>This has led to the creation and implementation of intricate laws and regulations designed to effectively combat both money laundering and terrorist financing, which are broadly referred to collectively as AML/CFT.&nbsp;</p><h2><b>What is AML/CFT?</b>&nbsp;</h2><p>The financing of terrorism is most often done using laundered money that has been generated through criminal activity. Because it is laundered money that most commonly funds terrorism, Anti-Money Laundering (AML) legislation is typically grouped with Countering the Financing of Terrorism (CFT) legislation.&nbsp;</p><p>At its core, AML/CFT refers to regulatory requirements that govern how businesses, institutions and organizations interact with their clients in ways that actively mitigate the threat of money laundering and terrorist financing. Typically, such laws require strict protocols concerning identity verification, enhanced due diligence, and risk mitigation.&nbsp;</p><p>To read more about AML/CFT laws and compliance obligations for businesses, institutions and organizations, click <a href="https://thisisme.com/contact-us" target="_blank">here</a>. &nbsp;</p><h2><b>AML/CFT Compliance Solutions in South Africa </b>&nbsp;</h2><p>AML/CFT regulatory compliance obligations are the sets of laws and regulations that govern how certain businesses, institutions and organizations are to interact with their clients within a framework of legal requirements that are designed to effectively address and mitigate the risk of money laundering and terrorist financing.&nbsp;</p><p>Although there are universally recognized guidelines for AML/CFT regulations, every country typically has their own set of regulatory requirements that govern how businesses, institutions and organizations in that specific country must conduct business with their customers.&nbsp;</p><p>When doing business in a country and ensuring regulatory compliance, it is important to employ experts in the relevant country who are best equipped to operate within the nexus of legislation, law enforcement and economic realities while delivering high-quality and cost-effective solutions for ensuring regulatory compliance. &nbsp;</p><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Countering the Financing of Terrorism (CFT) definition and discussion about enhanced due diligence and risk assessment services in South Africa

Countering the Financing of Terrorism (CFT)

<p>There are three concepts that are central to understanding how financial institutions work with the concept of credit. They are:&nbsp;</p><ol><li>Credit Risk&nbsp;</li><li>Credit Score&nbsp;</li><li>Credit Report&nbsp;</li></ol><p><b style="font-size: 1.4375rem; letter-spacing: -0.015em;">What is Credit Risk?&nbsp;</b><br></p><p>Credit risk can be understood as the possibility that a lender makes a financial loss due to a borrower’s failure to repay a loan or meet agreed-upon contractual obligations.&nbsp;</p><p>In other words, credit risk refers to the likelihood that a borrower may to some degree fail to pay back a loan.&nbsp;</p><p>Credit risk is typically measured in five ways (commonly referred to as the Five C’s). These are:&nbsp;</p><ol><li><b>Credit History:</b> an individual’s/entity’s history of debt management and loan repayment. This credit history information will be captured and used to generate credit reports, which calculate the associated credit risk of an individual/entity. &nbsp;</li><li><b>Capacity to Repay:</b> an individual’s/entity’s presumed ability to repay a loan, which is generally calculated by evaluating the level of debt compared to income.&nbsp;</li><li><b>Capital: </b>capital such as assets, investments and savings that can be put towards a loan as a form of down payment – a larger down payment will typically mean better interest rates and loan terms. &nbsp;</li><li><b>Collateral:</b> assets which can be seized in the event of a default to ensure that the lender can recoup most or all of the outstanding value of the loan – property is ideal collateral and is often used as collateral for smaller loans.&nbsp;</li><li><b>Conditions:</b> other factors – such as borrower age, the intended use of the funds and macroeconomic conditions – will affect the risk level of a loan and influence the willingness of the lender to grant credit.&nbsp;</li></ol><p>Depending on the size and type of the loan, a lender may choose to evaluate and account for some or all of these factors.&nbsp;</p><h2><b>What is a Credit Score?</b></h2><p>A Credit Score is essentially a calculated number that represents the credit <a href="https://thisisme.com/resources/risk-assessment" target="_blank">risk</a> associated with an individual or entity. A bad credit score means that a borrower represents a high risk of defaulting on a loan, while a good credit score represents a high probability that a borrower will repay the loan without incident.&nbsp;</p><p>It should be noted that every credit bureau has its own methodology for calculating credit scores, which means that an individual’s credit score may vary slightly depending on which bureau is being consulted. &nbsp;</p><p>A credit score will commonly be generated as part of a credit report.&nbsp;</p><h2><b>What is a Credit Report?&nbsp;</b></h2><p>A credit report will generate and display information that is crucial for evaluating an individual or entity’s credit risk.&nbsp;</p><p>Depending on the comprehensiveness of a credit report, the included information may include:&nbsp;</p><ul><li>A credit score&nbsp;</li><li>Credit history&nbsp;</li><li>A detailed evaluation of credit risk&nbsp;</li></ul><p>The exact content of a credit report may vary depending on the use case and the type of credit report that is being generated.&nbsp;</p><p>For instance, a credit report on a legal entity such as a business will contain different information compared to a credit report on a single person.</p><h2><b>Online Credit Reports&nbsp;</b></h2><p>Today, credit reports can easily be sourced online. Online credit risk services make it easier than ever for small businesses and large financial institutions alike to deploy credit risk services and streamline their <a href="https://thisisme.com/resources/know-your-customer" target="_blank">KYC</a> and <a href="https://thisisme.com/resources/risk-assessment" target="_blank">risk assessment</a> protocols.&nbsp;</p><p>Furthermore, using <a href="https://thisisme.com/resources/application-programming-interface" target="_blank">APIs</a>, credit risk services can be integrated into existing KYC systems and seamlessly conducted as part of an automated process. Businesses can seamlessly conduct credit checks on customers and assess risk as part of an automated <a href="https://thisisme.com/resources/digital-onboarding" target="_blank">digital onboarding</a> process. Designing a secure and world-class customer experience has never been easier.&nbsp;</p><h2><b>Credit Risk Services for Risk Assessment – Enhanced Due Diligence Checks and Account Verification Services (AVS)&nbsp;</b></h2><p>Credit reports – especially those conducted on businesses – are often one of several <a href="https://thisisme.com/resources/enhanced-due-diligence" target="_blank">due diligence</a> checks conducted to verify a business's legitimacy and authenticity and whether or not they are malicious and wish to defraud the lender/creditor.&nbsp;</p><p><a href="https://thisisme.com/resources/account-verification-service" target="_blank">Accounts Verification Service (AVS)</a> checks are another due diligence check that may be deployed alongside a credit report to establish the legitimacy of a business. While a credit report will be conducted to establish a business's credit score, an AVS check will establish the legitimacy of a business’s bank accounts and provide important information that is crucial for establishing whether a business is malicious or not.&nbsp;</p><h2><b>Credit Risk Services for South Africa</b>&nbsp;</h2><p>ThisIsMe provides a variety of credit-check services for individuals and businesses alike. As the most complete offering of KYC/AML and digital onboarding solutions in South Africa, we are assured in our capacity to meet your business’s credit risk services needs. &nbsp;</p><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Introduction to credit risk services and how they tie into KYC, identity verification, data validation and risk assessment services in South Africa

Credit Risk Services

<h2><b>What is Customer Due Diligence?&nbsp;</b></h2><p>In South Africa, the term Customer Due Diligence (CCD) is often used interchangeably with Know Your Customer (KYC).&nbsp;</p><p>Globally, <b>Customer Due Diligence (CCD)</b> is typically used as a legal term that refers to the range of due diligence checks that a business, institution or organization may conduct on its customers to assess risk and ensure regulatory compliance.&nbsp;</p><p>The majority of CCD checks will consist of identity verification and data validation checks that are conducted right at the beginning of a relationship with a client during the onboarding process before business is conducted.&nbsp;</p><p>However, in some instances, CCD checks will continue to be conducted throughout a business’s relationship with a client. For instance, high-risk individuals such as Politically Exposed Persons (PEPs) may be subjected to Ongoing Monitoring – a process of checks that are designed to continuously ensure the legitimacy of the individual and their associated financial transactions.&nbsp;</p><p>On the other hand, <b><a href="https://thisisme.com/resources/know-your-customer" target="_blank">Know Your Customer (KYC)</a></b> is a more flexible term, the meaning of which can change from country to country depending on the specific jurisdiction and set of regulatory frameworks. In South Africa, KYC is the better-known term that is typically used as a preferred synonym for CCD.&nbsp;</p><h2><b>How to Conduct Customer Due Diligence (CCD)?&nbsp;</b></h2><p>The CCD process is typically conducted as a business is establishing a relationship with a client – a process known as “onboarding”.&nbsp;</p><p>When conducting CCD checks, a business will typically be verifying:</p><ul><li>That an individual exists&nbsp;</li><li>Whether that individual is exactly who they claim to be&nbsp;</li><li>Whether that individual is eligible to receive the product or service in question&nbsp;</li><li>Whether that individual poses a threat of money laundering or other such crime</li></ul><p>In order to effectively verify identities, validate information and assess risk, the CCD process collects a variety of information about a customer. Information collected during the CCD process may include:&nbsp;</p><ul><li>Full name&nbsp;</li><li>Date of birth</li><li>Physical addresses&nbsp;</li><li>Employment and employment history&nbsp;</li><li>Physical appearance (biometric information)&nbsp;</li></ul><p>In many countries, CCD is a legal obligation established by Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) legislation. In South Africa, the primary legislation for this purpose is the Financial Intelligence Centre Amendment Act, otherwise known as FICA.&nbsp;</p><h2><b>Online Customer Due Diligence Services&nbsp;</b></h2><p>Today, CCD processes have been completely automated and digital technologies have transformed how businesses can verify identities and validate information.&nbsp;</p><p>The incredible impact of digital tools on Customer Due Diligence is clearly demonstrated by ThisIsMe’s revolutionization of the FICA compliance process in 2017. Initially, FICA compliance cost businesses time and money by forcing them to engage in inefficient and lengthy administration that consumed human resources. The labour-intensive process of ensuring compliance also contained many moving parts that rendered it vulnerable to non-compliance or fraud. For customers, FICA compliance entailed complex paperwork and time wasted standing in a bank queue.&nbsp;</p><p>In 2017, ThisIsMe transformed the South African RegTech industry by cutting FICA compliance down from two weeks down to three minutes – an achievement that got the company featured as one of the Emerging 50 Rising Stars on 2018’s FINTECH100 list.&nbsp;</p><p>The transformation of FICA compliance – enabled by new online identification verification technologies – allowed businesses to save time and money and ensure the highest levels of AML/CFT compliance, while consumers benefited from easier documentation provision and near-instantaneous personal information validation.&nbsp;</p><p>Furthermore, the digitisation of CCD checks has greatly improved their accuracy. In the past, CCD checks were completed manually by humans, which was a slow process that was immensely inefficient and consumed a vast amount of resources.&nbsp;</p><p>Today, CCD checks have been completely automated. The digitalisation and automation of CCD have transformed the CDD process, making it not only cheaper, faster and easier but also far more accurate: technologies such as machine learning and liveness detection allow for the cross-validation of documents across various databases, which has greatly improved the detection of forged documents.&nbsp;</p><h2><b>Why is Customer Due Diligence Important?&nbsp;</b></h2><p>First and foremost, the customer due diligence process is essential for ensuring regulatory compliance. Financial institutions and certain businesses and organizations across the world are legally obligated to conduct a variety of customer due diligence checks on their clients before doing business. Failure to adhere to these regulatory compliance obligations can lead to serious penalties being handed down to the offending business – serious fines, sanctions and even jail time may be applicable.&nbsp;</p><p>Secondly, comprehensive customer due diligence protocols help to protect a business against falling victim to a wide variety of financial crimes – identity theft, vendor fraud and customer fraud can all be devastating for a victim business, yet all are forms of crime against which dedicated resources for CCD have proven to be effective for mitigating risk.&nbsp;</p><p>Finally, the customer onboarding process – complete with identity verification and data validation checks – will oftentimes be the first hands-on experience that a customer has with the business. It is, therefore, important to ensure that it is a good one; first impressions last and a bad customer onboarding process that contains sluggish and tiresome KYC checks can ruin your business’s image and lose your client’s business before they have even been onboarded.</p><h2><b>Customer Due Diligence for Risk Assessment and Risk Mitigation&nbsp;</b></h2><p>CCD checks form an essential part of the risk assessment and risk mitigation process. Customer Due Diligence tools – examples include identity verification and AVS checks – are vital tools that are used by businesses to assess and mitigate risk.</p><p>South Africa operates a Risk-Based Approach (RBA) to Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) legislation. In essence, this means that it is the business’s responsibility to assess risk and then effectively mitigate it.&nbsp;</p><p>Within the framework of an RBA, Customer Due Diligence checks are essential tools that empower businesses to gather vital information that can be used to accurately and effectively assess the risk level of individual customers.&nbsp;</p><p>Such tools are essential for safe economic activity. Firstly, CCD checks help businesses ensure regulatory compliance with national AML/CFT laws. Secondly, CCD checks help to mitigate the risks faced by businesses around the world – identity theft, illicit credit applications and customer fraud are all examples of economic crimes that comprehensive CCD protocols can help to mitigate.&nbsp;</p><h2><b>Customer Due Diligence vs Enhanced Due Diligence&nbsp;</b></h2><p>Customer Due Diligence (CDD). Consequently, the term CDD may be used to refer to a variety of identity verification and data validation checks that are used in all risk levels and during all stages of the customer journey – examples include basic KYC checks during standard onboarding procedures, as well as slightly less standard checks conducted as part of an ongoing monitoring program, conducted a while into the customer journey.&nbsp;</p><p>On the other hand, Enhanced Due Diligence refers to the comprehensive risk assessment checks that are used in specific circumstances when the risk level is higher than normal. For instance, transactions related to Politically Exposed Persons (PEPs) and high-net-worth individuals will typically be subjected to enhanced due diligence checks in order to account for and mitigate the higher levels of risk.&nbsp;</p><p>Therefore, while enhanced due diligence checks might fall within the broad concept of customer due diligence, not all customer due diligence checks can be classified as enhanced due diligence.&nbsp;</p><h2><b>CCD, KYC, Identity Verification and Data Validation Services for South Africa</b>&nbsp;</h2><p>As South Africa’s leading provider of identity verification, data validation, risk assessment and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience how our suite of world-class solutions can empower your business, contact our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Overview of how Customer Due Diligence relates to identity verification, data validation, due diligence and risk assessment services in South Africa

Customer Due Diligence (CCD)

<h2><b>What is Data Verification?</b></h2><p>Verification involves taking some data and checking it against a trustworthy central database. If the data is a perfect match with the data held in the central database, the information can be successfully verified.&nbsp;</p><p>For example, someone’s identity can be verified using their South African Identity Document (ID). This is because the South African Department of Home Affairs (DHA) maintains a central database with every South African citizen’s identification number.&nbsp;</p><p>To explore ThisIsMe’s Identity Verification Services for South Africa, visit our solutions page <a href="https://www.thisisme.com/solutions/identity-verification-solutions" target="_blank">here</a>.&nbsp;</p><h2><b>What is Data Validation?&nbsp;</b></h2><p>The process of data validation is carried out when there is not a central database that can be used to cross-check the data.&nbsp;</p><p>For example, a South African passport cannot be verified because there is no central database that anyone can crosscheck the passport against.&nbsp;</p><p>Instead, a South African passport can be validated. This means that the authenticity of the passport can be confirmed or denied. This validation is done by checking thousands of different data points within a photograph/scan of the passport using world-class machine learning technologies.&nbsp;</p><p>This process of validation is secure enough to validate that a specific South African passport is legitimate. However, until there is a central database against which passports can be checked, it is impossible to verify a passport.&nbsp;</p><p><meta charset="UTF-8"><span>To explore ThisIsMe’s Data Validation Services for South Africa, visit our solutions page here.&nbsp;</span><br></p><h2><b>Identity Verification and Data Validation Services for South Africa&nbsp;</b></h2><p>As South Africa’s leading provider of KYC, due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience how we can help your business ensure regulatory compliance, mitigate risk and secure its transactions, contact our team <a href="https://www.thisisme.com/contact-us" target="_blank">here</a>.</p>

What is data vadalidation and how your business can use it to secure your transactions.

Data Validation

<h2><b>What is Digital Onboarding?&nbsp;</b></h2><p>The term “onboarding” refers to the process of integrating new members into an organization and/or signing up new customers. Typically, these processes will verify information – identity verification, age verification, and address validation are some examples.&nbsp;</p><p><span style="font-size: 0.8125rem;">Digital onboarding simply refers to when these onboarding processes are digitalized and conducted online. Digital onboarding processes can even be automated by integrating APIs.&nbsp;</span><br></p><p>Digital onboarding is sometimes referred to as “remote onboarding”. Remote onboarding refers to the onboarding of employees and customers without requiring them to be physically present – something that is enabled by the digitalization of the onboarding process. Today, these terms are largely synonymous.&nbsp;</p><h2><b>KYC for Digital Onboarding</b></h2><p>Know Your Customer (KYC) is a term that refers to procedures and mechanisms that are used to verify the identity of customers before conducting business with them – accordingly, KYC is intrinsically linked to Identity Verification.&nbsp;</p><p>When conducting KYC checks, a business will typically be verifying:</p><ul><li>That an individual exists&nbsp;</li><li>Whether that individual is exactly who they claim to be</li><li>Whether that individual is eligible to receive the product or service in question&nbsp;</li><li>Whether that individual poses a threat of money laundering or other such crime</li></ul><p>By verifying this information immediately at the time of signup/onboarding, a business, institution or organization can drastically reduce the chance that the individual is a bad actor who will cause harm.&nbsp;</p><p>The digitalization of KYC checks has revolutionised customer and employee onboarding and enabled incredible levels of accuracy, efficiency, automation and integration.&nbsp;</p><h2><b>Why is Digital Onboarding Important?&nbsp;</b></h2><p>Creating a world-class customer onboarding process is essential because it is often the start of the customer’s journey with the business. Accordingly, a bad customer onboarding process can ruin the customer’s perception of the company and lose their business on day one.&nbsp;</p><p>In the past, the customer onboarding process demanded that a company dedicate human resources to manually checking and validating information. This incredibly inefficient process drove up costs for the business and often produced a bad customer experience.&nbsp;</p><p>Even today with the help of digitalized tools, the process of manually onboarding new customers and employees can be cumbersome, inefficient and costly – the need for an employee to manually complete the required identity verification and data validation checks consumes valuable human resources that can be better spent elsewhere in the business.&nbsp;</p><p>Instead of manually completing the onboarding process, businesses can now automate it by integrating APIs.&nbsp;</p><p><b style="font-size: 1.4375rem; letter-spacing: -0.015em;"><font color="#000000">API for Digital Onboarding</font></b><br></p><p>Application Programming Interfaces (APIs) can be understood as mechanisms that enable two or more software components to communicate with each other using established protocols and definitions.&nbsp;</p><p>In the context of identity verification and data validation – such as the customer onboarding process – an API enables a business to build the necessary software into the relevant customer and employee onboarding processes, ensuring a seamless and efficient verification process.&nbsp;</p><p>The verification of an individual’s identity and the validation of extensive personal information, such as employment history, is an intensive administrative process that consumes resources if done manually.&nbsp;</p><p>Digital onboarding APIs enable the seamless integration of identity verification and due diligence checks, which greatly improve the onboarding processes by boosting efficiency, increasing accuracy and reducing costs.&nbsp;</p><h2><b>Digital Onboarding for Customers&nbsp;</b></h2><p>Onboarding is one of the most important parts of the customer journey. As one of the customer’s first experiences with the company, a bad onboarding process can turn the customer away and lose their business.&nbsp;</p><p>More intensive customer onboarding processes – such as those that require identity verification and data validation – have the potential to be arduous, inefficient, and frustrating for the customer. In such circumstances, digital onboarding procedures enable businesses to offer world-class, streamlined and effortless that create a great impression on the customer.&nbsp;</p><p>Tools for digital onboarding enable customers to submit all the necessary documentation necessary from the comfort of their homes, as well as have their identity verified and data validated in a matter of minutes. Digital onboarding tools, therefore, facilitate a great customer experience while helping the business to save time and money.&nbsp;</p><h2><b>Digital Onboarding for Employees</b>&nbsp;</h2><p>Digital onboarding tools are also used in the onboarding process of employees. Businesses with a high staff turnover – examples include large retail chains and manufacturing companies – need to easily and quickly vet and onboard new employees.&nbsp;</p><p>To screen out prospective employees with red flags – such as criminal histories or who have been implicated in fraud in the past – digital onboarding tools enable businesses to verify identities and validate information.&nbsp;</p><p>Digital onboarding tools and the integration of APIs allow this onboarding process to be conducted seamlessly, efficiently and cost-effectively. Whereas in the past this onboarding process may have required a large human resources department to manually process every new employee, digital onboarding tools enable the entire process to be automated. This saves time and money while also improving the experience for new employees. &nbsp;</p><h2><b>How to Ensure Regulatory Compliance During the Onboarding Process</b></h2><p>South Africa has a variety of AML/CFT regulatory requirements for identity verification and data validation. Non-compliance with these regulatory requirements can lead to the regulator imposing serious penalties on the offending business, so ensuring compliance is essential. The digital onboarding process – especially those that are automated using APIs – empower businesses to ensure regulatory compliance at all stages of the onboarding process.&nbsp;</p><h2><b>Digital Onboarding Services for South Africa</b></h2><p>As South Africa’s leading provider of world-class due diligence and digital-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. By supplying high-quality tools like AVS checks, we empower businesses to verify identities, validate information, secure transactions, and mitigate risk. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Overview of digital onboarding and how it ties into KYC, identity verification, risk assessment and enhanced due diligence services in South Africa

Digital Onboarding

<h2>What is a Domestic Prominent Influential Person (DPIP)?&nbsp;</h2><p>The Financial Intelligence Centre (FIC) provides the legal definition that is used in South African law:</p><blockquote>“A domestic prominent influential person is an individual who holds, (including in an acting position) for a period exceeding six months, or has held at any time in the preceding 12 months in South Africa, a prominent public function as listed in Schedule 3A of the FIC Act.” – FIC.&nbsp;</blockquote><p>A DPIP is a type of <a href="https://thisisme.com/resources/politically-exposed-person" target="_blank">Politically Exposed Person (PEP)</a>. PEP is a broad term that refers to individuals who currently hold or have held political power (e.g., a member of parliament or head of state).&nbsp;</p><p>Due to the interwoven nature of politics and private capital, governments and financial institutions worldwide agree that PEPs represent an increased <a href="https://thisisme.com/resources/Anti-Money-Laundering" target="_blank">money-laundering</a> risk. This is because individuals who hold political power can abuse their power to engage in money laundering and other financial crimes like corruption, bribery, embezzlement and the <a href="https://thisisme.com/resources/countering-the-financing-of-terrorism" target="_blank">financing of terrorism</a>.&nbsp;</p><p>To account for this risk, national regulators ensure that PEPs are subjected to <a href="https://thisisme.com/resources/enhanced-due-diligence" target="_blank">Enhanced Due Diligence (EDD)</a> procedures designed to scrutinize the connections between a PEP’s political power and their financial transactions with the aim of detecting illicit funds.&nbsp;</p><h2>AML/CFT Regulatory Compliance for PEPs in South Africa&nbsp;</h2><p>South Africa’s <a href="https://thisisme.com/resources/AML-CFT-Regulations" target="_blank">Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT)</a> legislation is structured around the <a href="https://thisisme.com/resources/risk-based-approach" target="_blank">Risk-Based Approach (RBA)</a>.&nbsp;</p><p>In short, an RBA entails that every <a href="https://thisisme.com/resources/Accountable-Institution" target="_blank">Accountable Institution (AI)</a> is responsible for designing its own system for <a href="https://thisisme.com/resources/risk-assessment" target="_blank">risk management and risk mitigation</a>, so long as it complies with a legal framework that is established by the FIC. &nbsp;</p><p>This general framework demands that Accountable Institutions check whether an individual is a PEP during the onboarding process.&nbsp;</p><h2>PEP Checks for South Africa – KYC and Digital Onboarding&nbsp;</h2><p>Most often, the process of checking whether or not an individual is a Politically Exposed Person will be done during the onboarding process and form part of the overall <a href="https://thisisme.com/resources/know-your-customer" target="_blank">Know Your Customer (KYC)</a> check.&nbsp;</p><p>When conducting KYC checks, a business, institution or organization will typically be verifying:</p><p>•<span class="Apple-tab-span" style="white-space:pre">	</span>That an individual exists&nbsp;</p><p>•<span class="Apple-tab-span" style="white-space:pre">	</span>Whether that individual is exactly who they claim to be&nbsp;</p><p>•<span class="Apple-tab-span" style="white-space:pre">	</span>Whether that individual is eligible to receive the product or service in question&nbsp;</p><p>•<span class="Apple-tab-span" style="white-space:pre">	</span>Whether that individual poses a threat of money laundering or other such crime</p><p>If an individual is detected to be a PEP, the business/financial institution is responsible for ensuring that the correct risk management protocols are put in place.&nbsp;</p><h2>Identity Verification and Enhanced Due Diligence Tools for AML Compliance&nbsp;</h2><p>Already complex, the global portfolio of legislation related to regulatory issues such as PEPs is further complicated by the fact that every country has its own specific laws and regulations, which are all funnelled through that nation’s specific regulatory bodies.&nbsp;</p><p>When doing business in a country and ensuring regulatory compliance, it is important to employ experts in the relevant country who are best equipped to operate within the nexus of legislation, law enforcement and economic realities while delivering high-quality and cost-effective solutions for ensuring regulatory compliance. &nbsp;</p><p>As South Africa’s leading provider of world-class due diligence and digital onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Overview of Foreign Prominent Public Officials (FPPOs) and how they relate to PEPs, enhanced due diligence and AML/CFT regulatory compliance

Domestic Prominent Influential Person (DPIP)

<h2><b>What is Employment Verification?&nbsp;</b></h2><p>Employment verification is a background check that seeks to verify the identity of an individual and validate the legitimacy of their employment history. Employment verification may need to be conducted for several reasons.&nbsp;</p><p>Firstly, prospective employers typically conduct employment verification checks on potential candidates for employment during the onboarding process before they are hired. This is done to look for any inconsistencies that exist between whom an employee claims to be and who they really are. Such checks are designed to catch any lies that an employee may make about their qualifications, criminal history, education, job titles, or prior work experience.&nbsp;</p><p>Secondly, employment verification may also be conducted to verify a request for a bank loan or a visa. Employment verification can validate that an individual falls within a specific income bracket or is permanently employed within a specific country.&nbsp;</p><p>Employment verification will seldom be carried out as a standalone check; instead, it will typically form part of a more extensive range of checks that cover many different aspects related to an individual's identity – a process known as Know Your Customer (KYC).&nbsp;</p><h2><b>Employment Verification as a Know Your Customer (KYC) Check&nbsp;</b></h2><p>Know Your Customer (KYC) is a term that refers to procedures and mechanisms that are used to verify the identity of individuals/customers before conducting business with them.&nbsp;</p><p>When conducting KYC checks, a financial institution will typically be verifying:</p><ul><li>That an individual exists&nbsp;</li><li>Whether that individual is exactly who they claim to be&nbsp;</li><li>Whether that individual is eligible to receive the product or service in question&nbsp;</li><li>Whether that individual poses a threat of money laundering or other such crime</li><li>Employment verification forms a crucial part of helping a business to verify that an individual is who they claim to be and that all the information associated with them is correct.&nbsp;</li></ul><p><b style="font-size: 1.4375rem; letter-spacing: -0.015em;"><font color="#000000">Online Identity Verification and Employment History Validation &nbsp;</font></b><br></p><p>The rise of online identity verification and data validation tools has revolutionized identity verification and data validation system.&nbsp;</p><p>Online tools enable highly efficient, accurate and cost-effective means for identity verification and data validation. Today, online identity verification leverages powerful technologies like biometric information and artificial intelligence to deliver incredibly accurate and reliable identity verification.&nbsp;</p><p><span style="font-size: 0.8125rem;">Online identity verification allows for the verification of remote individuals – clients and individuals on the other side of the world can easily verify themselves, while businesses have the capacity to efficiently verify new clients, customers and employees in a seamless remote-onboarding process.&nbsp;</span><br></p><p>Furthermore, the personal information necessary for the verification of an individual’s identity can be pulled from a variety of trusted and secure sources, thereby increasing the reliability of the verification.&nbsp;</p><p>ThisIsMe offers a comprehensive range of solutions for employment verification. For businesses that need to process a significant number of employment verification requests, our advanced API enables the seamless automation of KYC and employment verification checks. For businesses that process a lower number of requests, our online Partners platform provides access to our comprehensive suite of world-class solutions on either a subscription or pay-as-you-go basis.&nbsp;</p><h2><b>Why is Employment Verification Important?&nbsp;</b></h2><p>KYC checks – such as employment verification – are important to catch and prevent fraud. A comprehensive KYC check that verifies employment history will highlight any inconsistencies in an individual’s employment history and identify red flags such as an undeclared criminal record or a falsified employment history.&nbsp;</p><p>Dishonesty during the application process is a major red flag and indicator that the employee in question poses a heightened risk of committing occupational fraud. A detailed employment verification check, therefore, is an important tool that empowers the business to take the necessary steps to effectively mitigate the risk posed by the prospective customer or employee.</p><p>Employment verification also helps to ensure that only legitimate employees are onboarded by a company, which is essential for companies with high staff turnover and companies that onboard digitally and have no or minimal face-to-face contact with their employees.&nbsp;</p><p>By verifying the identity and employment history of a potential employee during the onboarding process, a business can ensure that they only hire employees who are not malicious and are in the best interests of the company.&nbsp;</p><p>Furthermore, South Africa legally requires some businesses, institutions and organizations to conduct employment verification checks on new customers and/or prospective employees. Although exact compliance obligations will vary, a business may be legally obligated to conduct employment verification checks on a customer or prospective employee. &nbsp;</p><h2><b>Employment Verification During Customer Onboarding</b>&nbsp;</h2><p>Employment verification can be an essential check during the customer onboarding process. For example, financial institutions will often need to verify an individual’s employment during the approval of a financial loan or the process of opening a bank account.&nbsp;</p><p>In most instances, financial institutions are legally obligated to verify the employment history of new customers. Alongside other KYC checks related to identity verification, employment verification checks are crucial for determining the legitimacy of an individual, as well as their applicability for a broad range of financial services like car loans or credit applications.&nbsp;</p><h2><b>Employment Verification During Employee Onboarding&nbsp;</b></h2><p>During the employee onboarding process, a business will verify many different details about an individual, such as verifying fundamental facts about their identity and confirming that the details on their CV match their real-life identity. Historically, this process was conducted manually by employees in a company’s human resources department.&nbsp;</p><p>Today, this process is conducted online and can be completely automated – an advancement that has revolutionized identity verification and data validation by slashing costs and drastically increasing efficiency.</p><p>This increase in efficiency means that large companies can significantly reduce their expenditure on their human resources departments, as such departments will no longer be required to conduct KYC checks manually on all new employees – such processes are all automated and can be conducted in a fraction of the time, saving time and money in the process.&nbsp;</p><h2><b>Automated Employment Verification API</b></h2><p>Application Programming Interfaces (APIs) can be understood as mechanisms that enable two or more software components to communicate with each other using established protocols and definitions.&nbsp;</p><p>In the context of identity verification and data validation – such as the employment verification process – an API enables a business to build the necessary software into the relevant customer and employee onboarding processes, thereby ensuring a seamless and efficient verification process.&nbsp;</p><p>The verification of an individual’s identity and the validation of extensive personal information, such as employment history, is an intensive administrative process that consumes vast amounts of human resources and capital if done manually.&nbsp;</p><p><span style="font-size: 0.8125rem;">ThisIsMe’s advanced API offers businesses the capacity to easily automate identity verification and information validation processes, thereby saving huge amounts of time and money and creating value by freeing up human resources in the process.&nbsp;</span><br></p><p>Furthermore, our API can be customized to meet the exact requirements of a client, meaning that every client can meet their precise needs with a world-class API tailored to their exact needs.&nbsp;</p><h2><b>Online Employment Verification Services for South Africa&nbsp;</b></h2><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. We offer a wide range of FICA-compliant KYC services that encompass politically exposed person checks, account verification services, and company sanction and credit checks.&nbsp;</p><p>To experience our full suite of due diligence solutions and see how we can help your business verify client information and meet its AML/CFT regulatory obligations, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.</p><div><br></div>

Overview of employment verification and how it ties into KYC, identity verification, data validation and remote onboarding services in South Africa

Employment Verification

<h2><b>Enhanced Due Diligence Meaning&nbsp;</b></h2><p>Enhanced Due Diligence (EDD) refers to a variety of processes that relate to the in-depth verification of information and the assessment of risk. By helping businesses to assess and monitor risk, EDD provides invaluable information that empowers businesses to make responsible and informed decisions regarding risk mitigation.</p><p>EDD forms part of Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) legislation that mandates financial institutions to take responsibility for ensuring that the identities of their customers are verified and that their activities are validated so as to mitigate the risk of financial crimes.&nbsp;</p><p>The exact systems and methods for carrying out EDD may vary from case to case and use a variety of different tools.&nbsp;</p><h2><b>Why Is Enhanced Due Diligence Important? &nbsp;</b></h2><p>Businesses, institutions and organizations are often legally obligated to conduct EDD. Legal requirements such as these – otherwise referred to as regulatory compliance obligations – are typically outlined and enforced by national regulators tasked with creating and enforcing laws to combat the threat of financial crimes like money laundering.&nbsp;</p><p>In South Africa, regulatory compliance obligations such as these form part of South Africa’s AML/CFT legislative framework, which is dictated and enforced according to the principles of a Risk-Based Approach (RBA). This means that businesses are obligated to create their own risk management programmes within various set parameters, which must then be approved by the Financial Intelligence Centre, which is South Africa’s regulator.&nbsp;</p><p>Compliance with regulatory requirements for EDD protocols is essential if businesses, institutions and organizations wish to avoid serious legal consequences – in cases of non-compliance, national regulators can hand out severe fines and even jail time.&nbsp;</p><p>Notably, however, it is often in the interests of businesses to conduct EDD above and beyond what is required by law. By conducting EDD, businesses gain access to a vast amount of information that empowers them to make informed decisions in order to better assess and mitigate risk, thereby minimizing the chances that a business will be caught off guard and hurt by a malicious actor.&nbsp;</p><p>Accordingly, failure to conduct EDD increases the risk that a business is exposed to. By failing to verify identities and validate information, a business puts itself at greater risk of falling victim to financial crime or being implicated in money laundering schemes. In such instances, the associated financial and reputational losses can be devastating.&nbsp;</p><h2><b>What is the Difference Between Enhanced Due Diligence and Customer Due Diligence (CCD)?&nbsp;</b></h2><p>Customer Due Diligence (CDD) broadly refers to the practices of identity verification and information validation that are applied to the majority of ordinary, low-risk customers. CDD relates to standard identity verification using Know Your Customer (KYC) standards. For example, CDD will be applied to customers opening a normal bank account.&nbsp;</p><p>Enhanced Due Diligence is an extension of CDD and is applied in situations that involve higher risk and greater complexity. For example, Enhanced Due Diligence is necessary for large international transactions that pose a high risk of financial crimes like money laundering. EDD takes place within the strict regulatory guidelines of AML/CFT compliance regulations.&nbsp;</p><h2><b>Online Enhanced Due Diligence&nbsp;</b></h2><p>The rise of online identity verification and data validation tools has revolutionized identity verification and data validation systems. Today, every single check that falls under enhanced due diligence – identity verification, address validation, business registration, AVS, etc. – can all be conducted online.</p><p>Online tools enable highly efficient, accurate and cost-effective means for enhanced due diligence that leverage powerful technologies like biometric information and artificial intelligence to deliver incredibly accurate and reliable risk analysis information.&nbsp;</p><p><span style="font-size: 0.8125rem;">Furthermore, the personal information necessary for the verification of an individual’s identity can be pulled from a variety of trusted and secure sources, thereby increasing the reliability of the verification.&nbsp;</span><br></p><p>Online tools for EDD also means that EDD can be conducted anywhere, at any time. Furthermore, online EDD allows for the verification of remote individuals – clients and individuals on the other side of the world can easily be vetted, while businesses have the capacity to efficiently onboard new clients, customers and employees in a seamless and secure remote-onboarding process.&nbsp;</p><p>To find out how ThisIsMe can equip your business with world-class tools for enhanced due diligence, contact our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.</p><h2><b>How to Conduct Enhanced Due Diligence</b>&nbsp;</h2><p>When conducting EDD checks, the amount of information that the subject needs to provide will vary and be determined by the specific context – for example, EDD checks on a single individual will require different data compared to EDD conducted on a legal entity such as a company.&nbsp;</p><p>Although the exact process of conducting EDD will vary on a case-to-case basis, what follows is a broad example of how EDD may be conducted.&nbsp;</p><p>Firstly, EDD will typically enhance the more basic/initial identity verification checks that are conducted during the Know Your Customer (KYC) process. KYC is a term that refers to procedures and mechanisms that are used to verify the identity of customers before conducting business with them.&nbsp;</p><p>When conducting KYC checks, a business will typically be verifying:</p><ul><li>That an individual exists&nbsp;</li><li>Whether that individual is exactly who they claim to be&nbsp;</li><li>Whether that individual is eligible to receive the product or service in question&nbsp;</li><li>Whether that individual poses a threat of money laundering or other such crime</li></ul><p>Once this more basic information has been verified, EDD will build upon it by carrying out more intensive and detailed checks. These EDD will check for several factors, which may include:</p><ul><li>Politically Exposed Person (PEP) status&nbsp;</li><li>Whether the individual or business is under sanction/embargo&nbsp;</li><li>Existence of adverse media (individual or business features in adverse media coverage)</li><li>Unusual and/or suspicious economic and transactional activity, such as being seemingly pointless or overly complex.&nbsp;</li></ul><p>Notably, however, exact EDD checks will typically vary a lot on a case-to-case basis, as the information required by a client during an EDD check will depend on factors such as the nature of the business, the industry in question, and the reason for conducting the check.&nbsp;</p><h2><b>Examples of Enhanced Due Diligence Red Flags</b>&nbsp;</h2><p>EDD may lead to the discovery of information that can be considered “red flags”.&nbsp;</p><ul><li>Politically Exposed Person (PEP): An individual being flagged as a Politically Exposed Person (PEP) does not implicate them in any sort of criminal activity or mean that businesses cannot be conducted with them. However, it does mean that the individual poses a high risk of financial crime and in many countries obligates the business, institution or organization to put specific protocols in place when doing business with the PEP.</li><li>Individual or Business is Sanctioned: EDD may reveal that an individual and/or business appears on a sanction list. In such an instance, it may be illegal for business to be conducted with them.</li><li>Implicated in Crime: EDD may reveal that an individual or business has been implicated with, or is closely associated with, an incident of financial crime.</li><li>Existence of Significant Adverse Media: Although adverse media does not criminally implicate an individual or business in anything, adverse media coverage and the associated bad publicity may be a reputational risk for business partners and/or clients. Consequently, the existence of adverse media may influence decisions related to whether or not business should be conducted with the relevant individual or company.</li><li>Suspicious Economic and Transactional Activity: Such activity may indicate financial crime like money laundering.</li></ul><h2><b>Applications of Enhanced Due Diligence</b>&nbsp;</h2><p>EDD is widely used throughout a variety of industries. EDD protocols can be adjusted to meet the specific needs of each business, institution or organization, thereby ensuring that every demand is perfectly met, every time. Below are some examples of how EDD is used within the contexts of three specific industries. &nbsp;&nbsp;</p><ul><li>Real Estate Due Diligence: EDD is widely used throughout the real estate industry. The high-value transactions that are typical of the real-estate industry pose a high risk of financial crimes such as money laundering. This risk is mitigated through the use of EDD to verify the identities of the relevant parties and validate information associated with the transactions. In South Africa (as well as across the world), EDD for the real estate industry is mandated as part of a comprehensive AML/CFT legislative framework.</li><li>Supplier/Vendor Due Diligence: Around the world, rising levels of economic crime and fraud have made EDD more essential for the purpose of protecting businesses against fraud and mitigating risk by verifying the integrity of business partners. Before conducting business with a business partner, EDD protocols are used to verify the information of measures such as these are crucial for mitigating risk and ensuring that the business partner is legitimate and will attempt to defraud other businesses.</li><li>Investment Due Diligence: For investment; for example, private wealth management services are exposed to high levels of risk related to money laundering. Consequently, investment firms are legally obligated to conduct EDD.&nbsp;</li></ul><h2><b>Application of EDD Within a Risk-Based Approach (RBA)</b></h2><p>Enhanced Due Diligence is more intensive and requires more information to make an assessment, so requirements for EDD are typically applied within the framework outlined by a Risk-Based Approach.&nbsp;</p><p><span style="font-size: 0.8125rem;">The exact demands for due diligence will often be determined by the Risk-Based Approach (RBA). An RBA is a system of risk management that adjusts itself depending on the risk level of a country, industry, or specific business. When applied to AML/CFT legislation, an RBA means that obligations for regulatory compliance will vary depending on the risk of money laundering in a specific context (for example, a small, low-risk tech startup will have fewer compliance obligations than a high-risk multinational bank). Due to this tailored approach, an RBA can create efficient AML/CFT programs that are tailored to a specific business or industry.&nbsp;</span><br></p><h2><b>Enhanced Due Diligence Services for South Africa</b>&nbsp;</h2><p>ThisIsMe provides businesses with the tools necessary to verify identities, validate information, secure transactions, and mitigate risk.&nbsp;</p><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Overview of enhanced due diligence and how it ties into identity verification, AML/CFT regulations and risk assessment services in South Africa

Enhanced Due Diligence (EDD)

<h2><b>What is a Foreign Prominent Public Official (FPPO)?&nbsp;</b></h2><p>The Financial Intelligence Centre (FIC) provides the legal definition that is used in South African law:</p><blockquote>“A foreign prominent public official (FPPO) is an individual who holds, or has held at any time in the preceding 12 months, in a foreign country a prominent public function as listed in Schedule 3B of the FIC Act.” – FIC.&nbsp;</blockquote><p><span style="font-size: 0.8125rem;">In other words, an FPPO is a person who holds (or held) a position of power in a country other than South Africa – common examples may be ministers or diplomats from a foreign country.&nbsp;</span><br></p><p>An FPPO is a type of <a href="https://thisisme.com/resources/politically-exposed-person" target="_blank">Politically Exposed Person (PEP)</a>. PEP is a broad term that refers to individuals who currently hold or have held political power (e.g., a member of parliament or head of state).&nbsp;</p><p><span style="font-size: 0.8125rem;">Due to the interwoven nature of politics and private capital, governments and financial institutions worldwide agree that PEPs represent an increased <a href="https://thisisme.com/resources/Anti-Money-Laundering" target="_blank">money-laundering risk</a>. This is because individuals who hold political power can abuse their power to engage in money laundering and other financial crimes like corruption, bribery, embezzlement and the <a href="https://thisisme.com/resources/countering-the-financing-of-terrorism" target="_blank">financing of terrorism</a>.&nbsp;</span><br></p><p>To account for this risk, national regulators ensure that PEPs are subjected to <a href="https://thisisme.com/resources/enhanced-due-diligence" target="_blank">Enhanced Due Diligence (EDD)</a> procedures designed to scrutinize the connections between a PEP’s political power and their financial transactions with the aim of detecting illicit funds.&nbsp;</p><h2><b>AML/CFT Regulatory Compliance for PEPs in South Africa&nbsp;</b></h2><p>South Africa’s <a href="https://thisisme.com/resources/AML-CFT-Regulations" target="_blank">Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT)</a> legislation is structured around the <a href="https://thisisme.com/resources/risk-based-approach" target="_blank">Risk-Based Approach (RBA)</a>.&nbsp;</p><p>In short, an RBA entails that every <a href="https://thisisme.com/resources/Accountable-Institution" target="_blank">Accountable Institution (AI)</a> is responsible for designing its own system for <a href="https://thisisme.com/resources/risk-assessment" target="_blank">risk management and risk mitigation</a>, so long as it complies with a legal framework that is established by the FIC. &nbsp;</p><p>This general framework demands that Accountable Institutions check whether an individual is a PEP during the onboarding process.&nbsp;</p><h2><b>PEP Checks for South Africa – KYC and Digital Onboarding&nbsp;</b></h2><p>Most often, the process of checking whether or not an individual is a Politically Exposed Person will be done during the onboarding process and form part of the overall <a href="https://thisisme.com/resources/know-your-customer" target="_blank">Know Your Customer (KYC)</a> check.&nbsp;</p><p>When conducting KYC checks, a business, institution or organization will typically be verifying:</p><ul><li>That an individual exists&nbsp;</li><li>Whether that individual is exactly who they claim to be&nbsp;</li><li>Whether that individual is eligible to receive the product or service in question&nbsp;</li><li>Whether that individual poses a threat of money laundering or other such crime</li></ul><p>If an individual is detected to be a PEP, the business/financial institution is responsible for ensuring that the correct risk management protocols are put in place.&nbsp;</p><h2><b>Identity Verification and Enhanced Due Diligence Tools for AML Compliance</b>&nbsp;</h2><p>Already complex, the global portfolio of legislation related to regulatory issues such as PEPs is further complicated by the fact that every country has its own specific laws and regulations, which are all funnelled through that nation’s specific regulatory bodies. When doing business in a country and ensuring regulatory compliance, it is important to employ experts in the relevant country who are best equipped to operate within the nexus of legislation, law enforcement and economic realities while delivering high-quality and cost-effective solutions for ensuring regulatory compliance. &nbsp;</p><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Foreign Prominent Public Official (FPPO)

<h2><b>What are High-Net-Worth Individuals?&nbsp;</b></h2><p>High-Net-Worth Individuals (HNWIs) are generally understood as individuals with over 1 million USD in liquid assets. However, there is no agreed-upon international legal definition for what exactly constitutes an HNWI and the calculation of liquid assets does not consider personal assets such as primary residences, durable goods or collectables.&nbsp;</p><p>Due to their notable wealth, HNWIs will typically have their finances and investments overseen and managed by personalized wealth managers and investment funds. This is done to streamline administration and maximise the gains that an individual can extract from their wealth with regard to taxes and estate planning.&nbsp;</p><h2><b>High-Net-Worth Individuals Within AML/CFT Regulatory Compliance Obligations&nbsp;</b></h2><p>There are specific Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) laws that regulate the finances and transactions associated with HNWIs.&nbsp;</p><p>The purpose of these due diligence checks is to verify the integrity and legitimacy of the funds in question and ensure that they are not illicit and associated with financial crimes such as corruption or money laundering.&nbsp;</p><p>This additional regulation and oversight are carried out because large sums of money carry represent an increased risk of financial crimes such as political corruption, money laundering and the financing of terrorism.&nbsp;</p><p>HNWIs are also frequently the target of identity theft scams. Impersonations of identity in order to defraud followers or business partners – as well as identity theft to steal money from financial institutions under the name of an HNWI – are both common schemes and both require comprehensive identity verification and due diligence checks to mitigate.&nbsp;</p><h2><b>PEP Checks and Sanction Checks for High-Net-Worth Individuals&nbsp;</b></h2><p>Although AML/CFT laws will vary depending on the specific jurisdiction in question, financial institutions will typically be obligated to conduct PEP and Sanction checks on HNWIs. The failure of a financial institution to conduct proper due diligence on a HNWI can expose that financial institution to considerable regulatory scrutiny in the long term, potentially even leading to the imposition of fines, penalties and sanctions.&nbsp;</p><p>Because HNWIs hold such considerable power as a result of their wealth, HNWIs represent a higher risk of being exposed to risky conflicts of interest that may impact how a financial institution is legally required to treat the HNWI.&nbsp;</p><p>Should a HNWI clearly be a Politically Exposed Person (PEP), the regulatory requirements for enhanced due diligence checks will scale accordingly. HNWIs who are also PEPs will have to undergo considerably stricter due diligence checks and will likely be subject to ongoing monitoring to account for their increased risk level.&nbsp;</p><p>Because of their substantial assets and capital, HNWIs are typically viewed by financial institutions as falling within a higher-than-average risk category and are legally obligated to comply with a broader range of due diligence checks.&nbsp;</p><h2><b>Identity Verification, Data Validation and Risk Assessment Services for South Africa&nbsp;</b></h2><p>ThisIsMe provides businesses with the tools necessary to verify identities, validate information, secure transactions, and mitigate risk.&nbsp;</p><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Overview of High-Net-Worth Individuals and their relation to AML/CFT compliance and enhanced due diligence and risk assessment protocols and obligations.

High-Net-Worth-Individual (HNWI)

<h2><b>What is Identity Verification?&nbsp;</b></h2><p>Identity verification refers to the process of establishing an individual's identity and cross-checking that identity against various information sources to verify that it is correct. In other words, it is the process of confirming that an individual is exactly who they claim to be.</p><p>Identity verification can be required for a wide variety of reasons. Sometimes, it can be required by national regulatory law; other times, a business may want to go beyond legal and regulatory requirements in order to better mitigate risk and secure financial transactions.&nbsp;</p><p>Identity verification spans nearly every industry: the betting industry verifying a player’s age; insurance companies needing to verify a client’s identity to establish the associated risk; banks verifying the identity of a client opening an account; real-estate companies verifying buyers – the applications for identity verification are nearly endless.&nbsp;</p><h2><b>Difference Between Identity Verification and KYC</b>&nbsp;</h2><p>The broad concept of identity verification is closely linked to the term Know Your Customer (KYC). While identity verification is a broad term, KYC specifically refers to the procedures and mechanisms that are used to verify the identity of customers, typically before conducting business with them.&nbsp;</p><p>When conducting KYC checks, a business will typically be verifying:</p><ul><li>That an individual exists&nbsp;</li><li>Whether that individual is exactly who they claim to be&nbsp;</li><li>Whether that individual is eligible to receive the product or service in question&nbsp;</li><li>Whether that individual poses a threat of money laundering or other such crime</li></ul><p>KYC checks, therefore, forms a crucial part of helping a business to verify that an individual is who they claim to be and that all the information associated with them is correct.&nbsp;</p><h2><b>Identify Verification Systems and Methods</b>&nbsp;</h2><p>From the perspective of identity verification, an individual’s identity is a combination of several defining characteristics, which may include:&nbsp;</p><ul><li>Full name&nbsp;</li><li>Date of birth</li><li>Physical addresses&nbsp;</li><li>Employment and employment history&nbsp;</li><li>Physical appearance (biometric information)</li></ul><p>These examples can be verified by checking and verifying a selection of documents, which includes:&nbsp;</p><ul><li>Identity Document&nbsp;</li><li>Driver’s license&nbsp;</li><li>Physical addresses associated with the individual’s place of residence and/or business</li><li>Biometric information (generated from both still and live images of an individual)</li></ul><p>Historically, identity verification was conducted manually and often required the physical presence of the individual whose identity was being verified. This manual approach was immensely inefficient and costly, as well as often being inaccurate and more prone to fraud.&nbsp;</p><p>Today, identity verification is conducted online using highly efficient and cost-effective methods that can automatically and quickly source the necessary information from a wide variety of trusted and secure sources, therein ensuring the accuracy of the verification process.&nbsp;</p><h2><b>Online Identity Verification&nbsp;</b></h2><p>Online identity verification enables highly efficient, accurate and cost-effective means for identity verification. Today, online identity verification leverages powerful technologies like biometric information and artificial intelligence to deliver incredibly accurate and reliable identity verification.&nbsp;</p><p>Online identity verification allows for the verification of remote individuals – clients and individuals on the other side of the world can easily verify themselves, while businesses have the capacity to efficiently verify new clients, customers and employees in a seamless remote-onboarding process.&nbsp;</p><p>Furthermore, the personal information necessary for the verification of an individual’s identity can be pulled from a variety of trusted and secure sources, thereby increasing the reliability of the verification.&nbsp;</p><p>Online identity verification tools cater to a wide variety of demands. Basic identity verification can be carried out by verifying an individual’s identity documents and cross-checking them with the information stored in national identity databases. For more comprehensive identity verifications, an individual’s identity can be verified and cross-checked against other databases to determine whether the said individual is a known criminal or a Politically Exposed Person (PEP).&nbsp;</p><p>It is important to note that the exact “characteristics” and data sets that are used to verify an individual’s identity will vary from case to case – some examples of identity verification will be more thorough and will use a combination of several (or even all) of the above examples.&nbsp;</p><p>The exact demands for identity verification will often be determined by the Risk-Based Approach (RBA). An RBA is a system of risk management that adjusts itself depending on the risk level of a country, industry, or specific business. When applied to AML/CFT legislation, an RBA means that obligations for regulatory compliance will vary depending on the risk of money laundering in a specific context (for example, a small, low-risk tech startup will have fewer compliance obligations than a high-risk multinational bank). Due to this tailored approach, an RBA can create efficient AML/CFT programs that are tailored to a specific business or industry. &nbsp;</p><p>Regardless, all personal information will need to be provided with the full consent of the individual being verified. To read more about ThisIsMe’s commitment to privacy and full compliance with both South Africa’s POPIA and the European Union’s GDPR legislation, click <a href="https://thisisme.com/contact-us" target="_blank">here</a>. &nbsp;</p><h2><b>FICA Compliance in South Africa&nbsp;</b></h2><p>The utility of online identity verification is best demonstrated by ThisIsMe’s revolutionization of FICA compliance in 2017. Initially, FICA compliance cost businesses time and money by forcing them to engage in inefficient and lengthy administration that consumed human resources. The labour-intensive process of ensuring compliance also contained many moving parts that rendered it vulnerable to non-compliance or fraud. For customers, FICA compliance entailed complex paperwork and time wasted standing in a bank queue.&nbsp;</p><p>In 2017, ThisIsMe transformed the South African RegTech industry by cutting FICA compliance down from two weeks down to three minutes – an achievement that got the company featured as one of the Emerging 50 Rising Stars on 2018’s FINTECH100 list.&nbsp;</p><p>The transformation of FICA compliance – enabled by new online identification verification technologies – allowed businesses to save time and money and ensure the highest levels of AML/CFT compliance, while consumers benefited from easier documentation provision and near-instantaneous personal information validation.&nbsp;</p><h2><b>Why is Identity Verification Essential?</b>&nbsp;</h2><p>Identity Verification forms a crucial part of a global effort to combat financial crime.&nbsp;</p><p>Across the world, rates of economic crime are at historical highs, while the associated financial losses from economic crime continue to break records.&nbsp;</p><p>As the rates of economic crime increase, identity verification services are becoming increasingly indispensable. Record-high rates of economic crime, evolving patterns, changing perpetrators and complex regulatory requirements all combine to form a landscape that can be challenging for SMEs to navigate. In this complex and risky economic landscape, identity verification tools enable businesses to ensure regulatory compliance, mitigate risk, and secure business transactions.&nbsp;</p><p>Identify Verification typically forms part of KYC and Due Diligence procedures. KYC and Due Diligence form a crucial part of risk management and risk mitigation measures for businesses, institutions and organizations across the world and are enabled by identity verification technology.&nbsp;</p><p>Identity verification forms a crucial part of Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) legislation.&nbsp;</p><h2><b>Who Needs ID Verification Services – Identity Verification Regulations in South Africa&nbsp;</b></h2><p>Some businesses, institutions and organizations use identity verification tools to mitigate risk and improve the security of their transactions and business relationships. Notwithstanding, many businesses, institutions and organizations are legally obligated to conduct identity verification in a variety of circumstances. In South Africa, these legal obligations stem primarily from FICA.&nbsp;</p><p>The Financial Intelligence Centre Amendment Act (FICA) is South Africa’s central AML/CFT law. FICA aims to secure South Africa’s economy against financial crimes such as money laundering by creating legal obligations for various businesses, institutions and organizations to verify the identities of those they do business with.&nbsp;</p><p>FICA identifies certain businesses, institutions and organizations as Accountable Institutions (AIs). Due to the nature of their business (such as banks), AIs carry greater responsibility and are exposed to heightened levels of risk related to money laundering and other such financial crimes.&nbsp;</p><p>Consequently, South African law requires AIs to comply with a wide range of regulatory requirements that includes identity verification, due diligence, record-keeping, reporting of information, and internal compliance governance. For example, any business, institution or organization in South Africa designated as an Accountable Institution (AI) is legally obligated to carry out a variety of checks related to identity verification before conducting business with a new client.&nbsp;</p><p>The exact compliance requirements for an AI will vary and depend on the AI’s categorization (e.g., asset manager or FOREX), as well as how securely an AI wishes to mitigate risk above and beyond what is required by law.</p><h2><b>Identity Verification Services South Africa</b></h2><p>By providing world-class identity verification systems, we give businesses the tools they need to effectively mitigate risk and place trust in their transactions.&nbsp;</p><p>As South Africa’s leading provider of KYC, due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience how we can help your business ensure regulatory compliance, mitigate risk and secure its transactions, contact our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Overview of identity verification and how it underpins KYC, data validation, enhanced due diligence, and risk assessment services in South Africa

Identity Verification

<h2><b>What is Know Your Customer (KYC)?&nbsp;</b></h2><p>Know Your Customer (KYC) is a term that refers to procedures and mechanisms that are used to verify the identity of customers before conducting business with them – accordingly, KYC is intrinsically linked to Identity Verification.&nbsp;</p><p>To find out more about KYC, click <a href="https://thisisme.com/resources/know-your-customer" target="_blank">here</a>.&nbsp;</p><h2><b>What is Know Your Business (KYB)?&nbsp;</b></h2><p>Know Your Business (KYB) is a specific term that refers to the types of identity verification and due diligence checks that are conducted on businesses, institutions and organizations. In other words, KYB refers to the variety of KYC-style checks that are run on juristic entities (such as businesses) instead of individuals.&nbsp;</p><p>KYB checks establish and verify important information such as the structure, ownership, purpose and activities of a company, institution or organization. By verifying such information, one can ensure that the entity in question is not fraudulent and that the owners are not concealing their identity for illegitimate means. &nbsp;</p><p>Know Your Business (KYB) is very similar to the concept of Know Your Customer (KYC). However, it must be noted that KYC is a broad term and can be used in place of KYB, KYB is a specific term and cannot be used to refer to the types of identity verification and due diligence checks that are run on individual customers.&nbsp;</p><p>It should be noted that KYB checks will often include elements of individual identity verification checks that are designed to verify the identity of important individuals within the business, such as company directors.&nbsp;</p><h2><b>Why is KYB Necessary?&nbsp;</b></h2><p>By conducting KYB checks, a business can scan for red flags and make informed decisions about whom they conduct business with.&nbsp;</p><ul><li><b>AML/CFT Regulatory Compliance:</b> Firstly, as part of their national AML/CFT legislation, many countries legally require businesses to conduct a variety of due diligence checks related to identity verification and data validation. Failure to comply with these regulatory requirements can lead to the imposition of serious fines and even sanctions.</li><li><b>Fraud Prevention and Risk Mitigation: </b>Secondly, KYB checks are essential tools for fraud prevention and risk mitigation. As fraud schemes grow more complex and harder to detect, conducting comprehensive KYB checks as part of a risk management and mitigation strategy is essential for ensuring security and protecting the business from the serious threat of fraud.&nbsp;</li></ul><h2><b>Who Needs to Conduct KYB?&nbsp;</b></h2><p>In South Africa, various businesses, institutions and organizations are designated as Accountable Institutions (AIs). Although the exact compliance requirements for AIs will vary depending on more specific classifications, all AIs are legally obligated to conduct some degree of due diligence that typically includes KYB checks when dealing with another business.&nbsp;</p><h2><b>Digital KYB Solutions&nbsp;</b></h2><p>Today, all KYB and Enhanced Due Diligence (EDD) services are available online. Online tools like company registration checks enable highly efficient, accurate and cost-effective due diligence solutions that can be completely automated and easily integrated into a digital customer onboarding process.&nbsp;</p><p>For clients that need to conduct a significant number of KYB checks as part of their customer onboarding process, advanced APIs enable the automation and seamless integration of such checks into a world-class customer onboarding process. For businesses that process lower volumes of due diligence requests related to identity verification and data validation.</p><p>From the perspective of risk assessment and risk mitigation, the digitalization and automation of KYB checks mean the verification of identities and validation of information can be conducted in minutes, thereby allowing for the near-instantaneous availability of important information that allows fast and informed decision-making. In today’s volatile economic crime threat landscape, the accessibility of high-quality tools that empower businesses to mitigate the risk of fraud are essential for securing our economy against the threat of financial crime.&nbsp;</p><p><span style="font-size: 0.8125rem;">ThisIsMe offers a comprehensive range of due diligence solutions for KYB. For businesses that need to process a significant number of due diligence requests, our advanced API enables the seamless automation of the process and creates value by taking the pressure off human resources. For businesses that process a lower number of requests, our online Partners platform provides cost-effective access to our suite of world-class solutions on either a subscription or pay-as-you-go basis.&nbsp;</span><br></p><p>To find out how we can help your business seamlessly meet its due diligence requirements, contact our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p><h2><b>Types of KYB Checks</b></h2><p>KYB checks encompass a range of different protocols and checks that are designed to verify the identity and legitimacy of the business, as well as check that the business is not under sanction and does not feature on any watchlists.&nbsp;</p><p>There is a wide range of KYB checks that can be conducted, which include the following…</p><h2><b>Business Registration Checks (CIPC)</b></h2><p>Verifying the identity of a business, institution or organization is important to ensure its credibility and legitimacy. Failing to conduct such a check can expose a business to a heightened risk of falling risk to fraud and other financial crimes. In South Africa, a business registration check will pull data from the Companies and Intellectual Properties Commission (CIPC) database.&nbsp;</p><p>A comprehensive business registration check should return information regarding the company’s registration date, enterprise name and the duration of registration, tax and VAT numbers, as well as all the current and past director details that are linked to the provided company registration number.&nbsp;</p><p>Business registration checks are an important tool for fraud prevention and risk mitigation. By gathering the information provided by a business registration check, a business can assess the legitimacy of a company and scan for important red flags that represent a heightened level of risk, thereby empowering the business to make informed decisions before proceeding with any transactions or relations.&nbsp;</p><h2><b>Company Account Verification Services (AVS)</b></h2><p>Account Verification Services (AVS) are an important tool for establishing the legitimacy of a company.&nbsp;</p><p>Furthermore, company AVS checks are sometimes required by law as part of national AML/CFT legislation. In such instances, failure to comply with AML/CFT requirements can lead to harsh legal penalties.&nbsp;</p><p>A comprehensive AVS check will confirm the validity of the bank account number provided by the company, as well as return detailed information concerning the full account details and type of account, the company name and the company registration number that is linked to the account details provided. &nbsp;</p><p>AVS checks are also an important tool for fraud prevention and risk mitigation. As fraud schemes grow more complex, fraudulent businesses employ increasingly complex tactics to appear legitimate – for example, a recently opened account is a common yet serious red flag. By conducting an AVS check, a business can assess the legitimacy of a company and scan for red flags, thereby empowering the business to make informed decisions and reduce the risk of falling victim to advanced fraud schemes.&nbsp;</p><h2><b>Company Credit Report</b></h2><p>Assessing a company’s credit score is an important step in verifying its legitimacy and credibility.</p><p>When conducted properly, a comprehensive company credit report should return a credit summary of all associated directors, as well as a calculated company risk score that takes several factors into account in order to generate a detailed and accurate assessment of the credit risk level of a company.&nbsp;</p><p>As part of their national AML/CFT legislation, many countries legally obligate businesses, institutions and organizations to conduct detailed credit assessments before engaging in a wide variety of transactions – in South Africa, Accountable Institutions (AIs) are subjected to an array of such regulatory compliance obligations.&nbsp;</p><p>Furthermore, as with company registration checks and company AVS checks, company credit reports are an important tool that a business can use to scan for red flags and mitigate the risk of fraud.&nbsp;</p><h2><b>Company Sanctions Check&nbsp;</b></h2><p>It is important to check whether a business is under any sanctions, features on any watchlists, or is politically exposed. Failing to conduct a sanctions check can have serious consequences and has the potential to cause serious harm to a business for several reasons.&nbsp;</p><p>Firstly, conducting business with an organization that is under sanction can put your business in serious breach of the law. If a business is found guilty of violating sanctions, regulators and law enforcement can impose strict penalties and costly fines, or even impose new sanctions on the business itself as punishment for violating sanctions law.&nbsp;</p><p>Secondly, conducting business with a company, institution or organization that is politically exposed or has a lot of adverse media published about it risks exposing a business to controversy and public fallout that can cause serious harm. By conducting a sanction check, a business can know exactly who it is about to go into business with and therefore make informed decisions about whom it associates with.&nbsp;</p><h2><b>KYB in a Risk-Based Approach&nbsp;</b></h2><p>Because South Africa operates a Risk-Based Approach (RBA) to money laundering regulation, it is the responsibility of the Accountable Institution (AI) to identify risks and take the necessary steps to mitigate those risks. Once the AI has finalized its risk management strategy, it will be presented to the Financial Intelligence Center (FIC) for approval.&nbsp;</p><p>Because South Africa applies a risk-based approach, and because every business must create its own risk management strategies, exact compliance requirements and tools for risk mitigation will vary. This variance depends on the AI’s categorization (e.g., asset manager or FOREX), as well as how securely an AI wishes to mitigate risk above and beyond what the FIC requires. &nbsp;</p><p>It is the responsibility of the business to create strategies that can properly assess risk and effectively mitigate risk should it arise. For example, should a KYB check reveal that a business partner is politically exposed, it is the responsibility of the business to employ effective strategies that can mitigate that risk in accordance with regulatory compliance obligations.</p><p>In South Africa, certain businesses, institutions and organizations are designated as Accountable Institutions (AIs). By law, AIs have their interactions with customers governed so as to mitigate the threat of money laundering.&nbsp;</p><h2><b>Know Your Business (KYB) Services South Africa&nbsp;</b></h2><p>As South Africa’s leading provider of identity verification, due diligence and risk management solutions, ThisIsMe provides world-class KYB solutions that can help your business secure its transactions and verify whom it does business with. To experience our full suite of solutions and find out how we can serve your business, contact our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Overview of Know Your Business (KYB) and how it ties into identity verification, enhanced due diligence and risk assessment services in South Africa

Know Your Business (KYB)

<h2><b>What is Know Your Customer (KYC)?&nbsp;</b></h2><p>Know Your Customer (KYC) is a term that refers to procedures and mechanisms that are used to verify the identity of customers before conducting business with them – accordingly, KYC is intrinsically linked to Identity Verification.&nbsp;</p><p>When conducting KYC checks, a business, institution or organization will typically be verifying:</p><ul><li>That an individual exists&nbsp;</li><li>Whether that individual is exactly who they claim to be&nbsp;</li><li>Whether that individual is eligible to receive the product or service in question&nbsp;</li><li>Whether that individual poses a threat of money laundering or other such crime</li></ul><p>By verifying this information immediately at the time of signup/onboarding, a business, institution or organization can drastically reduce the chance that the individual is a bad actor who will cause harm.&nbsp;</p><h2><b>Why is KYC Important?&nbsp;</b></h2><p>KYC is important for...</p><ul><li><b>Regulatory Compliance: </b>Countries have a wide array of laws and regulations designed to fight economic crimes like money laundering, which are known as AML/CFT. In many instances, businesses, institutions and organizations are obligated to maintain KYC protocols – failure to do so can result in the regulator imposing serious penalties on the business.</li><li><b>Fraud Prevention: </b>By verifying identities, KYC checks can identify and catch criminals and bad actors who may otherwise have done harm to the business.</li><li><b>Risk Assessment:</b> KYC checks provide a wide selection of information that can be used to mitigate risk; the more information a business has on its customers and employees, the more effectively it is able to assess risk and take steps to effectively mitigate against it.&nbsp;</li></ul><h2><b>What is the KYC Process?&nbsp;</b></h2><p>There is no exact KYC process; it varies from case to case, depending on the needs of the specific business and the laws and regulations it is obliged to comply with.&nbsp;</p><p>Accordingly, the information that will need to be verified and validated will vary. Below are some of the most common KYC-style checks that may form part of a business’s KYC process.&nbsp;</p><ul><li>Identity (verification of an individual’s ID number)</li><li>Age</li><li>Active validation of the identity/liveness detection (typically done through a selfie or brief video recording)</li><li>Address validation&nbsp;</li><li>Business activity/employment&nbsp;</li><li>Screening information (the individual’s identity may be screened against terrorist and sanction watchlists)&nbsp;</li><li>PEP check (some KYC checks may assess whether an individual is a Politically Exposed Person)</li></ul><p>The exact information and documentation that an individual will be required to present will vary on a case-by-case basis depending on the depth and the detail of the KYC being conducted. For example, while some KYC processes may only require an Identity Document (ID), some others may require information such as physical addresses associated with the individual’s place of residence and/or place of work.&nbsp;</p><p>Today, the digitalization of KYC has enabled a broader range of information to be gathered and analysed. For example, biometric information gathered from a simple selfie can be used to accurately verify an individual’s identity.&nbsp;</p><p>ThisIsMe offers a wide variety of world-class identity verification and data validation tools that empower businesses to accurately, efficiently and cost-effectively structure their KYC protocols to ensure regulatory compliance obligations.&nbsp;</p><h2><b>Applications of KYC</b>&nbsp;</h2><p>The primary reason for KYC is for the purpose of Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT). In the context of AML/CFT, KYC protocols make it harder to commit financial crimes because every transaction is tied to a verified identity.&nbsp;</p><p>KYC has a wide range of other applications and can prove invaluable even for businesses and organizations that are not required to conduct it by law.&nbsp;</p><p>KYC is applied in a wide variety of circumstances and across a broad range of industries. Some examples are listed below:&nbsp;</p><ul><li><b>KYC for Onboarding:</b> The process of onboarding new customers and/or employees is important, both because doing so helps to mitigate the risk of fraud, as well as often being required by law. Although doing carrying out KYC on clients and employees manually can be tedious and costly, the digitalization and automation of KYC procedures has revolutionized the process by making it cheap, fast and highly accurate.</li><li><b>Know Your Business (KYB):</b> KYB refers to the verification of the identity of a business and is designed to ensure that the business in question is legitimate and not a bad actor. KYB may be used by a bank to assess a business’s request for a loan, or by an insurance company to verify information related to the company.</li><li><b>KYC for Merchants/Vendors/Suppliers:</b> KYC is an extremely useful tool when it comes to protecting your business from malicious business partners. In South Africa, suppliers, merchants and vendors are a common perpetrator of fraud, but this threat can be mitigated by carrying out KYC checks on a business partner before conducting business with them.&nbsp;</li></ul><p>All of these applications of KYC are available as solutions offered by ThisIsMe. Click here to find out more about how ThisIsMe can help your business benefit from KYC by integrating it as a standard business practice.&nbsp;</p><h2><b>Online KYC – The Value of Digital KYC&nbsp;</b></h2><p>Today, KYC processes have been completely automated and have transformed the ways in which businesses can verify identities and validate information.&nbsp;</p><p>The incredible impact of digital KYC is best demonstrated by ThisIsMe’s revolutionization of the FICA compliance process in 2017. Initially, FICA compliance cost businesses time and money by forcing them to engage in inefficient and lengthy administration that consumed human resources. The labour-intensive process of ensuring compliance also contained many moving parts that rendered it vulnerable to non-compliance or fraud. For customers, FICA compliance entailed complex paperwork and time wasted standing in a bank queue.&nbsp;</p><p>In 2017, ThisIsMe transformed the South African RegTech industry by cutting FICA compliance down from two weeks down to three minutes – an achievement that got the company featured as one of the Emerging 50 Rising Stars on 2018’s FINTECH100 list.&nbsp;</p><p>The transformation of FICA compliance – enabled by new online identification verification technologies – allowed businesses to save time and money and ensure the highest levels of AML/CFT compliance, while consumers benefited from easier documentation provision and near-instantaneous personal information validation.&nbsp;</p><p>Furthermore, the digitilization of KYC has greatly improved its accuracy. In the past, the KYC was completed manually by human reviewers, which was a slow process that was immensely inefficient and consumed a vast amount of resources. Today, KYC has been completely automated. The automation and digitalization of KYC has transformed the KYC process, making it not only cheaper, faster and easier, but also far more accurate: technologies such as machine learning and liveness detection allows for the cross-validation of documents across various databases, which has greatly improved the detection of forged documents.&nbsp;</p><h2><b>The Importance of Fast and Easy KYC&nbsp;</b></h2><p>It is incredibly important that the KYC process is quick, easy and painless for the customer.&nbsp;</p><p>Because the KYC process is often one of the first interactions that a customer has with the business, their experience during the KYC process can greatly determine how the customer will view the business. If the KYC process is confusing and laborious, the customer may abandon the process and terminate their relationship with the business before it has even begun. To this extent, a bad KYC process can seriously undermine a business.&nbsp;</p><p>Consequently, it is important to create a quick and easy KYC process that allows your customers to easily provide the required documentation and get themselves verified in minutes. Today’s KYC solutions enable businesses to accurately conduct KYC in a manner that minimises customer friction and maintains a strong brand image in the minds of their customers.&nbsp;</p><h2><b>KYC Regulatory Compliance in South Africa&nbsp;</b></h2><p>In South Africa, the Financial Intelligence Centre Amendment Act (FICA) governs how financial services are required to interact with their clients in such a way that risk of money laundering and other such crimes and sufficiently mitigated.&nbsp;</p><p>The Prevention of Organized Crime Act of 1998 (POCA) and the Financial Intelligence Centre Act, 38 of 2001 (FICA) are the backbone of South African Anti-Money Laundering/KYC legislation.&nbsp;</p><p>In South Africa, any business, institution or organization that is designated as an Accountable Institution (AI) must comply with a broad range of laws and regulations that govern how that AI must interact with its clients.&nbsp;</p><p>If any business, institution or organization fails to comply with these laws and regulations, they may be subject to harsh penalties – high fines and even jail time may be applicable, depending on the specific circumstances of the case. It is therefore essential for every business, institution and organization to ensure their compliance with the relevant laws and regulations by adopting the necessary KYC protocols, enhanced due diligence mechanisms, and risk mitigation strategies.&nbsp;</p><h2><b>KYC Services for South Africa&nbsp;</b></h2><p>By providing world-class KYC solutions, ThisIsMe gives businesses the tools they need to quickly and easily verify their clients and provide an excellent customer experience in the process.&nbsp;</p><p>As South Africa’s leading provider of KYC, due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience how we can help your business ensure regulatory compliance, mitigate risk and secure its transactions, contact our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Overview of what KYC is and how it ties into identity verification, risk assessment, remote onboarding and enhanced due diligence services in South Africa

Know Your Customer (KYC)

<h2><b>What is Liveness Detection?</b>&nbsp;</h2><p>Liveness detection refers to the digital technologies that can securely detect the legitimacy of a biometric sample (such as a selfie) and judge whether that sample image is a real person or a fake representation like a physical mask or a digitalized deepfake model.&nbsp;</p><p>This technology is enabled using artificial intelligence and advanced algorithms that have been trained to securely and reliably differentiate between what is artificial and what is real.&nbsp;</p><p>Liveness detection empowers businesses to add an extra layer of high-security identity verification to mitigate the risks of identity fraud and economic crime. Furthermore, liveness detection has also proven especially useful in streamlining digital onboarding processes and greatly improving the customer experience.&nbsp;</p><h2><b>Difference Between Passive and Active Liveness Detection</b>&nbsp;</h2><p>Active liveness detection requires a user to perform a specific action that is promoted by the liveness check, such as waving an arm, smiling or turning one’s head. Although effective, active liveness detection can be jarring and requires more input from the user.&nbsp;</p><p><span style="font-size: 0.8125rem;">Passive liveness detection uses a single frame and does not require any additional input from the user. Today’s advanced artificial intelligence and deep learning algorithms have advanced to the point where they are capable of accurately performing liveness detection on a single frame, thereby streamlining the process and making it far easier for the user to engage with the technology.&nbsp;</span><br></p><h2><b>Liveness Detection for Know Your Customer (KYC) &nbsp;</b></h2><p>Liveness detection is a brilliant tool thanks to its ease of use and accuracy in verification. These benefits have meant that liveness detection has proven incredibly valuable as a tool for enhancing KYC checks.&nbsp;<span style="font-size: 0.8125rem;">Liveness detection has also greatly enhanced digital onboarding services by greatly reducing the time it takes to verify individuals.&nbsp;</span></p><p><span style="font-size: 0.8125rem;">Liveness detection offers businesses the highest degree of real-time identity verification and risk assessment capabilities. Furthermore, liveness detection offers great value when integrated into a digital onboarding process.&nbsp;</span></p><h2><b>Liveness Detection for Digital Onboarding – Why Is It So Important?</b>&nbsp;</h2><p>Liveness detection has transformed the digital onboarding process by providing an incredibly high accuracy rate for verification within a system that is quick and easy to use with a low rate of customer friction.&nbsp;</p><p>A higher friction rate during the onboarding process can worsen the overall customer experience and lead to higher abandonment rates – a negative occurrence that happens when a customer abandons the sign-up and verification process because it is too jarring and inefficient.&nbsp;</p><p>Liveness detection helps to ensure that the onboarding process is as smooth as possible. The authenticity of the customer is verified almost instantaneously without the customer having to follow any prompts or jump through unnecessary hoops.&nbsp;</p><p>Creating a world-class customer onboarding process is essential because it is often the first interaction that a customer will have with the business. Accordingly, a bad customer onboarding process can ruin the customer’s perception of the company and lose their business on day one.</p><p>The integration of liveness detection into a digital onboarding process helps to greatly reduce customer friction and ensure a world-class digital customer experience.&nbsp;</p><h2><b>Liveness Detection, Identity Verification and KYC Services for South Africa</b>&nbsp;</h2><p>As South Africa’s leading provider of world-class identity verification and digital-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. Our suite of enhanced due diligence services offers a wide array of identity verification, data validation, risk assessment and automated digital onboarding solutions. To find out more about how our solutions can empower your business, contact our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Introduction to Liveness Detection technology and how it enhances KYC, identity verification, data validation and risk assessment systems

Liveness Detection

<h2><b>What are Sanctions and Sanctions Due Diligence Checks?&nbsp;</b></h2><p>“Sanction” is a broad term that refers to penalties imposed upon an individual, entity or country as punishment. Typically, sanctions will be imposed for reasons such as the violation of internationally acclaimed standards, the abuse of human rights, or the infringement of the laws to protect the legal financial system. However, sanctions may also be imposed for a wide variety of political, social and economic reasons.&nbsp;</p><p>Sanctions are a punishment because they impose legal restrictions on what the implicated individual/entity can or cannot do. Sanctions also govern and restrict how other parties may interact with the sanctioned individual/entity.&nbsp;</p><p>The violation of sanctions is associated with strict financial and legal penalties, both for the sanctioned individual/entity and those who breach sanctions by interacting with the sanctioned individual/entity in prohibited ways. It is therefore essential to ensure that an individual/entity is not under sanction before doing business with them.</p><p>To avoid breaking international law and doing business with a sanctioned country, business or individual, one must check the sanction status of a client or business partner before doing business with them. These checks are known as sanctions checks and fall under the concept of due diligence.</p><h2><b>What are Politically Exposed Persons (PEPs) and PEP Checks?</b>&nbsp;</h2><p>Broadly, the concept of a PEP refers to individuals who currently hold or have held political power. Due to the interwoven nature of politics and private capital, governments and financial institutions worldwide agree that PEPs represent an increased money-laundering risk. This is because individuals who hold political power can abuse their power to engage in money laundering and other financial crimes like corruption, bribery, embezzlement and the financing of terrorism.&nbsp;</p><p>The identification of an individual as a PEP does not make them a criminal or implicate them in any wrongdoing. Instead, the identification of an individual as a PEP ensures that the PEP is more closely analysed for suspicious behaviour – an analysis that is done through enhanced due diligence protocols. This requirement for additional due diligence is designed to make it harder for PEPs to abuse their power and engage in corruption.&nbsp;</p><p>The laws and regulations regarding PEPs have serious implications for businesses, which are typically required by law to conduct due diligence on a client before any relations are formed and before any business is conducted. Failure to comply with these laws can lead to serious regulatory punishment.</p><h2><b>Why Ongoing Monitoring for AML is So Important&nbsp;</b></h2><p>Ongoing monitoring is important because international sanctions lists are constantly being revised, with new countries, businesses and individuals being added and removed every single day. A squeaky-clean business partner can become a legal liability to your company overnight.&nbsp;</p><p>PEP lists also constantly change. Events such as political elections, cabinet reshuffles, and even high-profile weddings mean that someone can suddenly become a PEP, even when they have no prior history of being one.&nbsp;</p><p>When this happens, it is still the responsibility of a bank or other such company to establish if that person is a PEP.&nbsp;</p><p>This is where ongoing monitoring becomes so important.&nbsp;</p><p>Ongoing monitoring constantly checks a list of names against sanctions and PEP lists across the world. This means that if someone suddenly becomes a PEP or gets sanctioned, your business will immediately be alerted to this change.&nbsp;</p><p>This immediate alert empowers your business to take immediate action and ensure continued regulatory compliance.&nbsp;</p><p>In our rapidly changing and global economy, it is essential to adopt automated systems that can easily and consistently ensure you remain legally compliant with AML laws.&nbsp;</p><h2><b>Ongoing Monitoring Services for South Africa</b>&nbsp;</h2><p>As South Africa’s leading provider of world-class identity verification, data validation and due diligence solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of solutions and experience how we can help your business meet its regulatory compliance obligations, book a demonstration by contacting our team <a href="https://www.thisisme.com/contact-us" target="_blank">here</a>.</p>

Introduction to ongoing monitoring and why it is essential for your business to ensure continued AML compliance.

Ongoing Monitoring

<h2><b>What is a Politically Exposed Person (PEP)?&nbsp;</b></h2><p>Broadly, the concept of a PEP refers to individuals who currently hold or have held political power.</p><p>Due to the interwoven nature of politics and private capital, governments and financial institutions worldwide agree that PEPs represent an increased money-laundering risk. This is because individuals who hold political power can abuse their power to engage in money laundering and other financial crimes like corruption, bribery, embezzlement and the financing of terrorism.&nbsp;</p><p>To account for this risk, national regulators ensure that PEPs are subjected to Enhanced Due Diligence (EDD) procedures designed to scrutinize the connections between a PEP’s political power and their financial transactions.&nbsp;</p><p>The identification of an individual as a PEP does not make them a criminal or implicate them in any wrongdoing. Instead, the identification of an individual as a PEP ensures that the PEP is more closely analysed for suspicious behaviour – an analysis that is done through enhanced due diligence protocols. This requirement for additional due diligence is designed to make it harder for PEPs to abuse their power and engage in corruption.&nbsp;</p><p>The laws and regulations regarding PEPs have serious implications for businesses, which are typically required by law to conduct due diligence on a client before any relations are formed and before any business is conducted. Failure to comply with these laws can lead to serious regulatory punishment.&nbsp;</p><h2><b>Politically Exposed Person (PEP) Definition in South Africa</b>&nbsp;</h2><p>Although the general concept of a PEP is widely accepted, each country will typically have their own legal definition of what constitutes a PEP, as well as unique laws for the detection and management of PEPs.&nbsp;</p><p>South Africa’s Financial Intelligence Centre (FIC) – the regulatory body responsible for applying SA’s AML/CFT legislation – uses the definition provided by the Wolfsberg Group. The Wolfsberg Group defines a PEP as any individual who is, or has in the past, been entrusted with prominent public functions in a particular country.</p><p>This definition encompasses a wide variety of actors and includes:</p><ul><li>A current or former senior official in the executive, legislative, administrative, military, or judicial branch of government (elected or not).</li><li>A senior official of a major political party.</li><li>A senior executive of a government-owned commercial enterprise, being a corporation, business or other entity formed by or for the benefit of any such individual</li><li>Senior and/or influential representatives of religious organisations (if these functions are connected to political, judicial, military, or administrative responsibilities)</li><li>An immediate family member of such individual, meaning spouse, parents, siblings, children, and spouse's parents or siblings.</li><li>Closely Associated Persons, such as business colleagues and personal advisers/consultants to the PEP who obviously benefit significantly from being close to such a person, must also be classified as politically exposed.</li></ul><h2><b>PEP Compliance Overview – Politically Exposed Persons Checks South Africa&nbsp;</b></h2><p>What follows is an introductory overview of South Africa’s AML/CFT laws and regulations with a specific focus on PEPs, as well as how businesses, organizations and institutions can ensure regulatory compliance.&nbsp;</p><h2><b>The Impact of South Africa’s Risk-Based Approach&nbsp;</b></h2><p>PEPs fall within South Africa’s AML/CFT legislation and regulations. For such AML/CFT legislation and regulation, South Africa uses a Risk-Based Approach (RBA).&nbsp;</p><p>An RBA is a system of risk management that adjusts itself depending on the risk level of a country, industry, or specific business. When applied to AML/CFT, an RBA means that obligations for regulatory compliance will vary depending on the risk of money laundering in a specific context (a small, low-risk tech startup will have fewer compliance obligations than a high-risk multinational bank). Due to this tailored approach, an RBA facilitates the creation of efficient AML/CFT programs that are tailored to a specific business or industry. &nbsp;</p><h2><b>What is an Accountable Institution – Defining Additional Responsibilities and Obligations</b>&nbsp;</h2><p>Within the context of this RBA, South African law identifies certain businesses, organizations and institutions as Accountable Institutions (AIs) – examples include banks and insurance companies. AIs carry greater responsibility and are exposed to heightened levels of risk related to money laundering and other such financial crimes.&nbsp;</p><p>Consequently, South African law requires AIs to comply with a wide range of regulatory requirements that span due diligence, record-keeping, reporting of information, and internal compliance governance.&nbsp;</p><p>These requirements can be varied and intensive: alongside more standard customer due diligence and KYC-style checks, AIs should also be able to determine whether a customer, a potential customer or the beneficial owner is a PEP.&nbsp;</p><p>It should be noted that the exact compliance requirements for an AI will vary and depend on the AI’s categorization (e.g., asset manager or FOREX). However, it is often advisable for AIs and other businesses to assess and mitigate risk above and beyond what is required by law.&nbsp;</p><h2><b>The Process of Assessing Risk and Becoming Compliant&nbsp;</b></h2><p>Because South Africa applies an RBA, there is no exact list of procedures, protocols or requirements that dictates exactly how an AI should deal with the heightened risk posed by PEPs.&nbsp;</p><p>Instead, every AI needs to conduct its own risk assessment. Once completed, the AI must develop its own risk management strategy and protocols that are specific to the AI in question.&nbsp;</p><p>Once an AI has conducted its own risk assessment and developed its own risk management strategy, it must submit it to the FIC for approval. When submitting these risk assessments and risk management strategies to the FIC, the Accountable Institution must detail how it plans to deal with the risk posed by PEPs – a risk that must be mitigated through the usage of PEP and sanction checks as part of a KYC and enhanced due diligence process.&nbsp;</p><p>Becoming and remaining compliant with AML/CFT regulations is crucial. Failure to do so can lead to serious penalties like fines and jail time.&nbsp;</p><p>As South Africa’s leading provider of identity verification and enhanced due-diligence solutions, ThisIsMe offers world-class PEP and sanction scanning solutions that enable businesses and institutions to meet regulatory requirements and secure their transactions.&nbsp;</p><p>In addition to our advanced API that caters for automation and large-scale processing, ThisIsMe offers prepaid solutions that cater for smaller batch processing at a highly cost-effective rate. To find out more about how ThisIsMe can help your business conduct advanced due diligence and easily meet its PEP scanning obligations, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p><h2><b>Politically Exposed Persons – A Global Overview</b></h2><p>Global issues such as money laundering necessitate the creation of multinational organizations tasked with developing internationally applicable policy guidelines to assist in the AML/CFT. One such organization is the Wolfsberg Group, which is an association of thirteen global banks that aims to develop frameworks and guidance for the management of financial crime risks. South Africa’s Financial Intelligence Centre defines PEPs in accordance with the Wolfsberg Group’s guidelines.&nbsp;</p><p>Similar to the Wolfsberg Group is the Financial Action Task Force (FATF). The FATF is a leading intergovernmental organization founded to develop anti-money laundering guidelines and policy recommendations. The FATF has its own definitions of PEPs, as well as numerous guidelines and recommendations for how financial institutions are to deal with PEPs.&nbsp;</p><p>The FATF defines a PEP as:</p><p>•<span class="Apple-tab-span" style="white-space:pre">	</span>a present or past senior government official;</p><p>•<span class="Apple-tab-span" style="white-space:pre">	</span>prominent politicians belonging to a certain party;</p><p>•<span class="Apple-tab-span" style="white-space:pre">	</span>an executive of a governmental commercial enterprise formed for their benefit;</p><p>•<span class="Apple-tab-span" style="white-space:pre">	</span>close family members;</p><p>•<span class="Apple-tab-span" style="white-space:pre">	</span>a publicly known associate of a financial institution.</p><p>The FATF also draws distinctions between foreign, domestic and international PEPs.</p><ul><li><b>Foreign PEPs:</b> "Individuals who are or have been entrusted with prominent public functions by a foreign country, for example, Heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state-owned corporations, important political party officials.”</li><li><b>Domestic PEPs:</b> “Individuals who are or have been entrusted domestically with prominent public functions, for example Heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state-owned corporations, important political party officials.”</li><li><b>International organisation PEPs:</b> “Persons who are or have been entrusted with a prominent function by an international organisation, refers to members of senior management or individuals who have been entrusted with equivalent functions, i.e. directors, deputy directors and members of the board or equivalent functions.”</li></ul><p>The FATF also provides guidelines and recommendations regarding how Financial Institutions are detect PEPs and process them once detected.&nbsp;</p><ul><li>Financial Institutions must begin by identifying PEPs in their customer base. If a PEP is detected, they must be regarded as a high-risk client and, as a result, enhanced due diligence procedures must be put in place and heightened scrutiny applied.&nbsp;</li><li>This enhanced due diligence should determine the country associated with them, establish the type of business, industry, and personal financial situation of the PEP, as well as identify the PEP's affiliations, employment, and associations.&nbsp;</li><li>Enhanced Due Diligence (EDD) must also ensure continued monitoring of the PEP, which must search for any unusual financial activity and report any suspicious activities to the financial authorities of both the Financial Institution’s country of operation and the PEP’s home country.</li><li>Additionally, heightened scrutiny has to be applied whenever PEPs, families of PEPs, or closely associated persons of the PEP are the contracting parties or the beneficial owners of the assets concerned, or have power of disposal over assets by virtue of a power of attorney or signature authorisation.</li></ul><h2><b>Politically Exposed Person Check for South Africa</b></h2><p>Already complex, the global portfolio of legislation related to regulatory issues such as PEPs is further complicated by the fact that every country has its own specific laws and regulations, which are all funnelled through that nation’s specific regulatory bodies. When doing business in a country and ensuring regulatory compliance, it is important to employ experts in the relevant country who are best equipped to operate within the nexus of legislation, law enforcement and economic realities while delivering high-quality and cost-effective solutions for ensuring regulatory compliance. &nbsp;</p><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Overview of Politically Exposed Persons and how it affects identity verification, enhanced due diligence and risk assessment services in South Africa

Politically Exposed Person (PEP)

<h2><b>What is Risk?</b></h2><p>The concept of risk can become incredibly complex, multifaceted and difficult to define – risk assessment and risk mitigation have grown into diverse fields of academic study and specialized professional work.&nbsp;</p><p>If a broad and simplified definition is taken, risk can be understood as the probability that a detrimental and/or undesirable event may occur that, should it occur, will have negative consequences for the concerned individuals/entities. &nbsp;</p><h2><b>Types of Risk&nbsp;</b></h2><p>There are many different types of risk that span a broad range of contexts, industries, and social, political and economic factors. One example is political risk, which deals with the risk associated with political events; another example is investment risk, which deals with the risk of a loss associated with a financial investment.&nbsp;</p><p>As a provider of tools for risk assessment that span identity verification and data validation, the type of risk most pertinent to our clients are risks related to personal identity. These risks will be the focal point of this article. &nbsp;</p><h2><b>What is Risk Assessment? </b>&nbsp;</h2><p>Risk assessment is the process of collecting information that can empower a business to assess the level of risk in any given situation and then make informed decisions regarding how to go forward, after having evaluated the information that has been collected and assessing the associated level of risk.&nbsp;</p><p>In other words, risk assessment is the process of gathering and analysing information so as to make informed decisions that take all pertinent factors into account.&nbsp;</p><h2><b>Difference Between Risk Assessment and Risk Mitigation&nbsp;</b></h2><p>As previously discussed, risk assessment refers to the gathering of information in order to build a better understanding of the risk inherent in a situation.&nbsp;</p><p>On the other hand, risk mitigation refers to the actual decisions that are made based on the information that has been gathered.&nbsp;</p><p>As a supplier of tools for risk assessment, ThisIsMe will never serve in an advisory capacity concerning how a business should or should not manage a specific situation or mitigate a certain risk.</p><p>ThisIsMe’s services empower businesses with the tools that are necessary to gather high-quality information that can then be used to assess risk. To find out how our suite of world-class solutions can empower your business to assess risk, contact our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p><h2><b>Risk Assessment and Regulatory Compliance Obligations for AML/CFT&nbsp;</b></h2><p>Jurisdictions around the world have strict legislation concerning the regulation of financial activity in order to mitigate the risk of money laundering and the financing of terrorism. This portfolio of legislation is referred to as Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) and contains strict provisions for how financial institutions are to interact with their clients and conduct transactions.&nbsp;</p><p><span style="font-size: 0.8125rem;">Much of global AML/CFT legislation centres on the verification of personal identity and the tracing of funds to ensure their legitimacy.&nbsp;</span><br></p><p>South Africa is no different. National AML/CFT legislation requires businesses, institutions and organizations designed as Accountable Institutions (AIs) to adhere to a variety of obligations for the verification of client identities and the validation of information.&nbsp;</p><h2><b>What is the Process of Conducting Risk Assessments</b></h2><p>In South Africa, AML/CFT legislation is governed by a Risk-Based Approach. In short, this means that every business will have to mitigate the risks that it is exposed to (within a certain set of laws that provide a baseline and framework for a business’s specific risk assessment and risk mitigation protocols).&nbsp;</p><p>How exactly a business conducts a risk assessment and in what circumstances it does so will typically depend on the industry and specific legal requirements for doing so. Consequently, the exact tools used for risk assessment will vary depending on the use case.&nbsp;</p><p>In the context of risk assessment related to personal identity, there is a wide variety of tools at a business’s disposal that are equipped to cater to a wide variety of broad and highly specific roles.&nbsp;</p><h2><b>Digital Tools for Risk Assessment&nbsp;</b></h2><p>There exists a wide variety of tools for risk assessment.&nbsp;</p><p>Some of the most common tools are basic identity verification tools such as ID number verification, which can verify that an individual is real, is alive, and that the person using the ID number is who they claim to be. This basic tool can be enhanced with artificial intelligence and liveness detection in order to use and match real photographs of the person with their ID photo, thereby adding an extra layer of security. &nbsp;</p><p>Other tools include more advanced identity verification and data validation tools such as Politically Exposed Person (PEP) checks, sanction checks, Bank Account Verification Services (AVS checks) and adverse media checks. These tools will typically be used in certain situations that call for advanced tools that gather more comprehensive information on an individual – transactions related to important political figures or ultra-high-net-worth individuals may call for the use of tools such as these.&nbsp;</p><p>Regardless of the exact scenario, the underlying logic is the same: gather high-quality information to assess risk, thereby empowering a business to make informed decisions.&nbsp;</p><h2><b>Risks Related to Personal Identity &nbsp;</b></h2><p>For many businesses, institutions and organizations, there is significant risk associated with personal identity and the individuals with whom they do business, be they customers, clients, suppliers or other business partners.&nbsp;</p><p>The risks related to personal identity are varied and complex. For some industries, the risks associated with personal identity are primarily regulatory. For instance, in order to mitigate against money laundering, banks in most jurisdictions are obligated to conduct significant due diligence on high-net-worth individuals to establish verified identities and track funds to ensure their legitimacy. Should this due diligence not be conducted and the bank facilitates the process of money laundering, the bank puts itself at high risk of being given severe penalties by national regulators.&nbsp;</p><p>For smaller businesses, the risks associated with personal identity are more directly related to the fraudulent individual in question. For example, should the business fail to detect that a wholesaler is fraudulent, the victim business may get defrauded of assets worth a significant portion of its gross capital.&nbsp;</p><p>Risks related to personal identity also expand to encompass legal entities such as companies and trusts. In these cases, a business may conduct checks on a legal entity to verify director information and validate information such as the legitimacy of associated bank accounts.&nbsp;</p><p>The risks associated with are typically most serious for the financial services industries – banks, insurance and investment firms are some examples of financial institutions that are highly exposed to risks related to personal identity such as fraud, financial crime, money laundering and the financing of terrorism.&nbsp;</p><h2><b>Risk Assessment Services for South Africa – Identity Verification, Data Validation and KYC Solutions</b></h2><p>All of the tools for risk assessment discussed in this article – and more – are offered by ThisIsMe. ThisIsMe provides businesses with the tools necessary to verify identities, validate information, secure transactions, and mitigate risk.&nbsp;</p><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.</p>

Overview of risk assessment and how it relates to identity verification, data validation, KYC and enhanced due diligence services in South Africa

Risk Assessment

<h2><b>What is a Risk-Based Approach (RBA)?&nbsp;</b></h2><p>The Risk-Based Approach (RBA) is a system of risk management for Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) that adjusts itself depending on the risk level of a country, industry, or specific business.&nbsp;</p><p><span style="font-size: 0.8125rem;">In other words, the RBA is an approach to AML/CFT law-making and regulation that adjusts the intensity of regulation according to the levels of risk that are present in specific circumstances.&nbsp;</span><br></p><p>For example, if a certain business sector faces a high risk of financial crime (e.g. banks), businesses within that sector will be legally obligated to implement more intensive protocols to mitigate the risk of financial crime. Accordingly, businesses in other sectors that are at a lower risk of financial crime will not be obligated to employ the same protocols because they are not exposed to the same level of risk.&nbsp;</p><p>The RBA, therefore, facilitates the creation of effective AML/CFT and risk mitigation programs without forcing low-risk business sectors to unnecessarily waste resources mitigating minor risks.&nbsp;</p><h2><b>What is the Financial Intelligence Centre Amendment Act (FICA)?</b></h2><p>FICA is South Africa’s central piece of legislation concerning Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT). FICA regulates many aspects of South Africa’s financial system, including the country’s adoption of the Risk-Based Approach (RBA).</p><p>The purpose of the Act is to “assist in the identification of the proceeds of unlawful activities; combat money laundering; and combat the financing of terrorist and related activities.”</p><p>This is achieved by “creating a legal framework for effective identification and verification of client identities; recordkeeping; reporting processes; staff training; compliance requirements and the establishment of the Financial Intelligence Centre and Counter-Money Laundering Advisory Council."</p><p>Today, much of how FICA governs the usage of the RBA in South Africa comes down to the Act’s classification of certain businesses, institutions and organizations as Accountable Institutions (AIs).&nbsp;</p><h2><b>What is an Accountable Institution (AI)?&nbsp;</b></h2><p>FICA designates a wide variety of businesses, institutions and organizations as Accountable Institutions (AIs). FICA’s exact classification of an AI is varied and complex – it is best understood by referring in detail to Schedule 1 of the Act, which defines exactly the classification of an Accountable Institution.&nbsp;</p><p>In essence, however, an AI can be understood as any business, institution or organization that carries out the business of any entity listed under Schedule 1 of the Act, which due to the associated higher risk of financial crime, demands more intensive protocols for risk mitigation.&nbsp;</p><p>An AI's regulatory compliance obligations will also vary depending on the AI’s classification (e.g., FOREX).&nbsp;</p><h2><b>Obligations of an Accountable Institution in South Africa&nbsp;</b></h2><p>Accountable Institutions must comply with a variety of regulatory compliance obligations that are established by FICA. These include obligations for due diligence, record-keeping, internal compliance governance and reporting of information to the Financial Intelligence Centre.&nbsp;</p><p>Notably, because South Africa operates a Risk-Based Approach (RBA) to AML/CFT regulation, it is the responsibility of the AI to identify risks and take the necessary steps to mitigate those risks. This must be done internally; the business is responsible for risk assessment, as well as the creation of a plan to effectively address and mitigate those risks. Once the AI has finalized its risk management strategy, it will be presented to the Financial Intelligence Center (FIC), which can then approve or reject the strategy.</p><p><span style="font-size: 0.8125rem;">An Accountable Institution (AI) is therefore legally obligated to design and implement an RBA in line with its categorization, as well as being in line with the level of risk that it is exposed to.&nbsp;</span></p><p>Consequently, the digital tools that an AI requires to ensure regulatory compliance will vary on a case-to-case basis. For example, due to the varying natures of their business, one AI may require a wide variety of basic tools for identity verification, while another AI may require complex digital tools that focus on enhanced due diligence and risk analysis.&nbsp;</p><p>As South Africa’s leading provider of world-class identity verification, data validation and due diligence solutions, ThisIsMe gives businesses the tools they need to ensure compliance with the regulatory obligations established by FICA.&nbsp;</p><h2><b>Identity Verification, Data Validation and Enhanced Due Diligence Services in South Africa&nbsp;</b></h2><p>Although there are universally recognized guidelines for AML/CFT regulations, every country typically has their own set of regulatory requirements that govern how businesses, institutions and organizations in that specific country must conduct business with their customers.&nbsp;</p><p>When doing business in a country and ensuring regulatory compliance, it is important to employ experts in the relevant country who are best equipped to operate within the nexus of legislation, law enforcement and economic realities while delivering high-quality and cost-effective solutions for ensuring regulatory compliance. &nbsp;</p><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Overview of the Risk-Based Approach and how it regulates laws for identity verification, data validation and enhanced due diligence in South Africa

Risk-Based Approach (RBA)

<h2><b>What are Sanctions?&nbsp;</b></h2><p>“Sanction” is a broad term that refers to penalties imposed upon an individual, entity or country as punishment. Typically, sanctions will be imposed for reasons such as the violation of internationally acclaimed standards, the abuse of human rights, or the infringement of the laws to protect the legal financial system. However, sanctions may also be imposed for a wide variety of political, social and economic reasons.&nbsp;</p><p>Sanctions are a punishment because they impose legal restrictions on what the implicated individual/entity can or cannot do. Sanctions also govern and restrict how other parties may interact with the sanctioned individual/entity.&nbsp;</p><p>The violation of sanctions is associated with strict financial and legal penalties, both for the sanctioned individual/entity and those who breach sanctions by interacting with the sanctioned individual/entity in prohibited ways. It is therefore essential to ensure that an individual/entity is not under sanction before doing business with them.&nbsp;</p><h2><b>Sanction Lists&nbsp;</b></h2><p>When it comes to sanctions screening and ensuring regulatory compliance, financial sanctions are typically the most common. Financial sanctions are typically lists that are published by international bodies such as the United Nations, European Union, and financial regulatory authorities.&nbsp;</p><p>Some of the best-known sanctions are those published by the United Nations (UN) and the USA’s Office of Foreign Assets Control (OFAC). The UN sanctions list is sanctions that are upheld by UN member nations and organizations.&nbsp;</p><p>There are many sanction lists across the world in addition to those upheld by the UN and OFAC, which is why a comprehensive sanction screening is important in order to ensure that an individual or entity is not under any form of sanction.&nbsp;</p><h2><b>Types of Sanctions</b>&nbsp;</h2><p>Although sanctions can take a variety of forms, they can often be grouped into one of four general categories: economic, diplomatic, travel and sports sanctions.&nbsp;</p><ul><li><b>Economic: </b>Restrictions or complete bans on engaging in economic activity with an individual, entity or country.</li><li><b>Diplomatic:</b> Partial or termination of political cooperation that will typically entail the breaking of diplomatic bonds such as embassies, councils, and shared cultural institutions. Diplomatic sanctions will often place legal restrictions on the formation of any new forms of diplomatic cooperation by governments, organizations or businesses.&nbsp;</li><li><b>Travel:</b> Restrictions or bans on movement that may be placed upon an individual, a specific group of individuals, or restrictions on movement to and from a specific location/region.</li><li><b>Sport:</b> Restrictions or bans placed on the participation of an individual or groups of individuals from participating in shared cultural events such as sporting tournaments.&nbsp;</li></ul><h2><b>Why are Sanction Checks Important?</b>&nbsp;</h2><p>If a business does not complete sanction checks, that business puts itself in danger of actively breaching sanctions law. This has the potential to be devastating for several reasons.&nbsp;</p><p><span style="font-size: 0.8125rem;"><i>Firstly</i>, a business that is in breach of sanctions may be subjected to harsh legal penalties and fines. The exact legal penalties and fines will vary depending on the nature of the sanction and the severity of the breach of the said sanction, but the act of breaching sanctions will always have severe repercussions and may even lead the offender to be placed under sanction themselves.&nbsp;</span><br></p><p><i>Secondly,</i> breaching sanctions risks exposing a business to serious public scrutiny, controversy, scandals and boycotts. In such an event, the reputation of the business will likely suffer greatly, which can translate into a loss of market capitalization from which the business may never recover.&nbsp;</p><p><i>Thirdly,</i> conducting business with a sanctioned individual/entity may openly expose the business to risk. A sanctioned individual/entity has been sanctioned for a reason and therefore poses a high risk of being a malicious actor who does harm to a business.&nbsp;</p><p>Conducting comprehensive sanction screening on individuals and businesses before conducting business with them is essential to avoid being in breach of sanctions and being subjected to the harsh associated penalties.&nbsp;</p><h2><b>Sanctions and Politically Exposed Persons (PEPs)</b></h2><p>Broadly, the concept of a Politically Exposed Person (PEP) refers to individuals who currently hold or have held political power. Due to the interwoven nature of politics and private capital, governments and financial institutions worldwide agree that PEPs represent an increased money-laundering risk. This is because individuals who hold political power can abuse this power to engage in money laundering and related financial crimes including, corruption, bribery and the financing of terrorism.&nbsp;</p><p>Although an individual being politically exposed does not implicate them in any wrongdoing, it does drastically raise the associated risk level and demand that an array of additional due diligence checks be carried out. To fully understand the importance of politically exposed person checks, click <a href="https://thisisme.com/resources/politically-exposed-person" target="_blank">here</a> to read more.</p><h2><b>Ongoing Monitoring for Sanctions&nbsp;</b></h2><p>Oftentimes, a higher-risk individual or entity will be required to be kept under ongoing monitoring to ensure that their sanction status does not change, and if it does change, that the change is dealt with accordingly and the necessary regulatory and risk mitigation procedures are put in place.&nbsp;</p><h2><b>Who Needs to Check for Sanctions?&nbsp;</b></h2><p>In South Africa, sanctions screening is legally required by the Financial Intelligence Centre Amendment Act (FICA). FICA requires businesses that are designated as Accountable Institutions (AIs) to comply with a wide range of regulatory requirements that cover due diligence, record-keeping, reporting of information to the Financial Intelligence Centre, and internal compliance governance. This wide range of regulatory requirements includes sanction screening.&nbsp;</p><p>It should be noted that South Africa deploys a Risk-Based Approach (RBA) for its Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) legislation.&nbsp;</p><h2><b>Sanction Checks for South Africa&nbsp;</b></h2><p>As South Africa’s leading provider of world-class identity verification, data validation and due diligence solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of solutions and experience how we can help your business meet its regulatory compliance obligations, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Overview of sanctions and how they tie into KYC, enhanced due diligence, identity verification and risk assessment services in South Africa

Sanctions

<p>To understand the risks associated with SIM cards, one first has to understand the concept of a SIM swap and how it can be used to defraud victims.&nbsp;</p><h2><b>What is a SIM Swap?&nbsp;</b></h2><p>The term “SIM swap” refers to the process of transferring sensitive information from one SIM card to another.&nbsp;</p><p>This process is perfectly legal when done with the consent of the SIM card owner. For example, someone who has lost their phone will need to conduct a SIM swap in order to keep their phone number and all associated information.&nbsp;</p><p>However, the SIM swap process can also be abused by criminals to defraud a victim. This is known as SIM swap fraud.&nbsp;</p><p>SIM swap fraud entails the fraudulent transfer of a victim’s SIM card user data to another SIM card operated by criminals. In other words, it involves the transfer of a user’s “identity” from their legitimate SIM card to a fraudulent SIM card.</p><p>To understand how this explosion in SIM swap fraud is enabling other forms of South African crime and harming South African businesses, click <a href="https://thisisme.com/insights/How%20Social%20Engineering%20Exploits%20Trust%20and%20Identities%20to%20Commit%20Fraud" target="_blank">here</a>.&nbsp;</p><h2><b>Why is SIM Swap Fraud So Dangerous?&nbsp;</b></h2><p>SIM swap fraud poses such a danger because by taking control of a victim’s phone number, criminals can intercept One-Time-Pins (OTPs) used to verify access to bank accounts and authorize various banking-related transactions.&nbsp;</p><p>The vast majority of SIM swap fraud is committed by criminals who use <a href="https://thisisme.com/resources/social-engineering" target="_blank">social engineering techniques</a> to get sensitive information from the victim that can then be used to gain control over their SIM card and defraud them.&nbsp;</p><p>For example, fraudsters may pose as a consultant for your mobile communication service provider before reaching out and asking you to confirm your personal information. This information, such as login details or answers to security questions, will be necessary to verify your personal identity and authenticate the request to conduct a SIM swap.</p><p>This gives the criminals possession of your cellphone number and grants them access to all services that rely on your cell number for verification. The criminals may then assume your identity and intercept security measures such as One Time Pins (OTPs), which they can use to access your bank accounts, among other things.&nbsp;</p><h2><b>How to Detect a SIM Swap&nbsp;</b></h2><p>ThisIsMe offers several products designed to source and validate information concerning a SIM card.&nbsp;</p><p>These services include the ability to return and validate information associated with a SIM card, such as the associated mobile devices, crucial information concerning any SIM swaps that have taken place, and information concerning any individuals associated with the SIM card. &nbsp;</p><p>Such information is crucial for <a href="https://thisisme.com/resources/risk-assessment" target="_blank">assessing and mitigating risks</a> that businesses may be exposed to through their dealings with customers and business partners.&nbsp;</p><p>To understand how we can help your business mitigate the risk of SIM swap fraud, contact our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.</p><h2><b>Identity Verification, Data Validation and Enhanced Due Diligence Services for South Africa&nbsp;</b></h2><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Overview of SIM swap fraud and how it relates to KYC, data validation, risk assessment and enhanced due diligence services in South Africa

SIM Swap Fraud

<h2 id="mcetoc_1febe7st4t" style="text-align: center;"><b>What is SSO and how does it work?</b></h2><p>Single Sign-On (SSO) is a secure identity verification system that allows you to access all the features of your Partners account with one set of login credentials used once per session.</p><p>SSO functions on a trust relationship between the service provider and the identity provider. The SSO service produces an authentication token when you login to your Partners portal, shared with each application accessed thereafter.</p><p>Using one password may sound counterintuitive to security, however SSO produces stronger passwords, motivates more secure password management as it includes an authentication token sent directly to your chosen device, and  creates an overall happier customer experience.</p><h2 id="mcetoc_1febe7st4u"><b>What is a One-Time Password (OTP)</b></h2><p>A one-time password is an authorization code unique to one login session or transaction on a digital device. The numeric or alphanumeric token is often generated within a two-factor authentication service.</p><p>A OTP token will either generate a synchronous or an asynchronous PIN, depending on the vendor. A synchronous token utilises a secured key and time to create a one-time password, while asynchronous tokens use a CRAM (challenge-response authentication mechanism).</p><p>OTP technology can combat some instances of identity theft by allowing the captured username and password access only once – vastly improving on the antiquated static password systems of the past.</p><h2 id="mcetoc_1febe7st4v"><b>How do I register for the One-Time Password (OTP) service?</b></h2><p>To register for the OTP service on ThisIsMe, simply login to your Partners account and select your preferred 2FA method from our available options.</p><p><b>Authenticator App Method:</b></p><ol>	<li>Download a trusted authenticator app to your mobile or tablet device should you not already have one</li><li>Select the ‘App’ option when enabling Multi-Factor Authentication</li><li>Scan the QR code on your authenticator app, and click ‘Next’ to add ThisIsMe to your authenticator app</li><li>You will receive the OTP to your authenticator app, enter this code into the ‘Code’ field and click ‘Verify Code’</li><li>Your device is now registered as a recognized and secure device to receive OTP codes for ThisIsMe Partners account access</li>				</ol><p><b>SMS Method:</b></p><ol>	<li>Select the ‘SMS’ option</li>	<li>Enter your primary mobile number into the field and click ‘Send SMS’</li>	<li>Once received via SMS, input the OTP into the field and click ‘Verify OTP’</li>	<li>Your authentication method is now set to ‘SMS’ and you will receive your OTP codes to your mobile/tablet</li></ol><p><b>Email Method:</b></p><ol>	<li>Select the ‘Email’ option</li>	<li>Enter your primary email address into the field and click ‘Email Code’</li>	<li>Once received in your inbox, input the code into the field and click ‘Verify and Sign In’</li></ol><p>OTP technology can combat some instances of identity theft by allowing the captured username and password access only once – vastly improving on the antiquated static password systems of the past.</p><h2 id="mcetoc_1febe7st410"><b>What is Two-Factor Authentication (2FA)</b></h2><p>The Two-Fctor Authentication method requires one extra step, or a second factor, when logging into your ThisIsMe Partners account. Two-factor adds an extra layer of security to your account, using your username and password and your enabled device to receive a time-sensitive 6-digit PIN or One-Time Pin sent to you each time you attempt to log in.</p><p>Once you have enrolled at least one trusted phone number, you will be able to receive the OTP sent to your unique device each time you access your account. As this OTP is sent only to your verified device, you alone have access to this extra login credential to gain access - a far more secure method than single-factor authentication.</p><h2 id="mcetoc_1febe7st411"><b>How do I activate Two-Factor Authentication (2FA) on my account?</b></h2><p>Two-factor authentication is a more secure login method as it uses two or more factors to verify your identity – your username and password, and a contact method. Two-Factor Authentication is highly recommended to increase security on your account.</p><p>To set up your account Two-Factor Authentication on your ThisIsMe account:</p><ol>	<li>Login to your ThisIsMe Partners account <strong><a href="https://partners.thisisme.com/kyc_express.html%20or%20https://sso.thisisme.com/?ssoid=a8dffaa8-c5b2-4e0b-8adf-b2613371aa9c&amp;rdpath=/sign_in.html">here</a>.</strong></li><li>Select your preferred method of two-step authentication from our available options:</li></ol><p><p><strong style="font-size: 0.8125rem;">Two-Factor Authentication Using Authenticator App:&nbsp;</strong><span style="font-size: 0.8125rem;">Add ThisIsMe to your preferred authenticator app, retrieve the generated code and place it into the 'code' field, then click 'Verify Code'.</span></p></p><ol>	<li>	<ul>		</ul></li></ol><p><ul></ul></p><p><strong>Two-Factor Authentication Using SMS:&nbsp;</strong><span style="font-size: 0.8125rem;">Enter your primary mobile number into the field and click 'Send SMS' and enter the received OTP on your device into the field and click 'Verify Code'.</span></p><ol>	<li>	<ul>		</ul></li></ol><p><ul></ul></p><p><strong>Two-Factor Authentication Using Email:&nbsp;</strong><span style="font-size: 0.8125rem;">Enter your primary email address into the field and click 'Email Code', then check your inbox to retrieve and input this OTP into 'Verify Code' field.</span></p><h2 id="mcetoc_1febe7st412"><b>I forgot my password, what do I do? </b></h2><p>If you have forgotten your password and need to create a new one, please follow these instructions:</p><p><strong>From your desktop</strong></p><p>1. Click “Forgot Password”, located under the “Sign In” button.</p><p class="text-center align-center"><img src="https://cdn.thisisme.com/CMS/3815e6a8-3d15-4eaa-9ccc-c9593de5997f.png" style="border: 1px solid #dddddd; border-radius: 7px; font-family: Roboto, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, &quot;Helvetica Neue&quot;, Arial, sans-serif, &quot;Apple Color Emoji&quot;, &quot;Segoe UI Emoji&quot;, &quot;Segoe UI Symbol&quot;, &quot;Noto Color Emoji&quot;; font-size: 0.8125rem; width: 50%;"></p><p>2. Key in your primary email address linked to your account, and click “Send Instructions”.</p><p class="text-center align-center"><img src="https://cdn.thisisme.com/CMS/08a468a5-4463-4046-9d8c-4e5b0922569f.png" style="border: 1px solid #dddddd; border-radius: 7px; width: 50%;"></p><p>3. Open the “Update your ThisIsMe Password” sent to your inbox, and click the “Reset Password” button.</p><p class="text-center align-center"><img src="https://cdn.thisisme.com/CMS/3d600ebb-f438-4adb-a781-d0b29b8f5b0f.png" style="border: 1px solid #dddddd; border-radius: 7px; font-family: Roboto, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, &quot;Helvetica Neue&quot;, Arial, sans-serif, &quot;Apple Color Emoji&quot;, &quot;Segoe UI Emoji&quot;, &quot;Segoe UI Symbol&quot;, &quot;Noto Color Emoji&quot;; font-size: 0.8125rem; width: 100%;"></p><p>4. You will be directed to the Reset Password window. It is advisable to set a secure password using a password keeper application in order to keep your personal information safe. Confirm your password, then click “Next”.</p><p class="text-center align-center"><img src="https://cdn.thisisme.com/CMS/fabde5ae-6fbb-4321-abea-757547eb7a89.png" style="width: 50%; border: 1px solid #dddddd; border-radius: 7px; "><br></p><p>5. Have your mobile device ready to receive and key in the One-Time Password into the “OTP” field. Click “Verify and Change Password”.</p><p class="text-center align-center"><img src="https://cdn.thisisme.com/CMS/9e23530a-1ecf-4267-9c84-5f22a2242ffc.png" style="border: 1px solid #dddddd; border-radius: 7px; font-family: Roboto, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, &quot;Helvetica Neue&quot;, Arial, sans-serif, &quot;Apple Color Emoji&quot;, &quot;Segoe UI Emoji&quot;, &quot;Segoe UI Symbol&quot;, &quot;Noto Color Emoji&quot;; font-size: 0.8125rem; width: 50%;"></p><p><strong>You are all set!</strong></p><p>Click “Sign In” and if you have not yet <strong>enabled one of the two-factor authentication methods</strong> on your account, it is strongly recommended to do so to ensure your sensitive information is kept secure.</p>

Single Sign On

<h2><b>What is Social Engineering?&nbsp;</b></h2><p>Put simply, social engineering encompasses a range of techniques that are used by fraudsters to trick a victim into performing certain acts or divulging sensitive information like passwords and credit card details. Social engineering scams use psychological manipulation by preying on human nature, vulnerabilities and trust to trick innocent victims into handing over sensitive information that can then be used to commit fraud.&nbsp;</p><p>The term “social engineering” is a broad concept that encompasses a number of more specific techniques, which include:&nbsp;</p><ul><li>Phishing&nbsp;</li><li>Smishing&nbsp;</li><li>Vishing</li><li>Spoofing&nbsp;</li></ul><p>These are all variations of social engineering techniques that have been given their own names due to the shocking rise of social engineering scams and the need to more precisely differentiate one method from another.&nbsp;</p><p>Although social engineering techniques are increasingly pervasive, such methods are seldom the crime by themselves. In most cases, social engineering is used as a tool that enables the practical completion of economic crimes such as SIM swap fraud, Business Email Compromise (BEC) scams, and stock theft.</p><h2><b>Why are Social Engineering Attacks So Dangerous?&nbsp;</b></h2><p>Social engineering has become a significant threat due to its capacity to bypass even the most technologically secure systems by abusing the trust we place in one another.</p><p>Social engineering’s successful use of subtle trickery and emotional manipulation has enabled social engineering attacks to breach secure digital systems and pull off devastating acts of fraud.&nbsp;</p><p>There have been some incredibly high-profile social engineering attacks: celebrity social media accounts have been hacked and used to defraud due to only social engineering attacks, while major corporations and banks have been defrauded after having their highly advanced digital security perimeters breached only due to social engineering attacks.&nbsp;</p><p>Other examples of social engineering fraud include Business Email Compromise (BEC) scams that entail criminals faking professional and reputable email accounts in order to extract sensitive information from employees or “authorize” the payment of large funds into fake/malicious bank accounts.&nbsp;</p><h2><b>Know Your Customer (KYC) and Know Your Business (KYB) – How to Mitigate the Risk of Social Engineering Attacks&nbsp;</b></h2><p>Social engineering attacks can be difficult to protect against because they can come in so many different forms and from so many different avenues.&nbsp;</p><p>From the perspective of businesses, social engineering scams can most effectively be guarded against by verifying the identities and information associated with business partners – vendors, suppliers, creditors, debtors and consultants are all business partners that can have their identity stolen by malicious scammers in order to defraud the victim business.&nbsp;</p><p>These risks can be mitigated by using clear due diligence and Know Your Business (KYB) protocols that verify identities, validate information and assess risk.&nbsp;</p><h2><b>Know Your Business (KYB) Tools and Systems&nbsp;</b></h2><p>Fraud committed by business partners is a devastating and costly event for any business to fall victim to – business partners may commit. These risks can be mitigated by taking concrete steps to verify identities and validate information.&nbsp;</p><h2><b>1.)<span class="Apple-tab-span" style="white-space:pre">	</span>Business Registration Checks (CIPC)</b></h2><p>Verifying the identity of a business, institution or organization is important to ensure its credibility and legitimacy. Failing to conduct such a check can expose a business to a heightened risk of falling risk to fraud and other financial crimes. In South Africa, a business registration check will pull data from the Companies and Intellectual Properties Commission (CIPC) database.&nbsp;</p><p>A comprehensive business registration check should return information regarding the company’s registration date, enterprise name and the duration of registration, tax and VAT numbers, as well as all the current and past director details that are linked to the provided company registration number.&nbsp;</p><p>Business registration checks are an important tool for fraud prevention and risk mitigation. By gathering the information provided by a business registration check, a business can assess the legitimacy of a company and scan for important red flags that represent a heightened level of risk, thereby empowering the business to make informed decisions before proceeding with any transactions or relations.&nbsp;</p><h2><b>2.) Company Account Verification Services (AVS)</b></h2><p>Account Verification Services (AVS) are an important tool for establishing the legitimacy of a company.&nbsp;</p><p>Furthermore, company AVS checks are sometimes required by law as part of national AML/CFT legislation. In such instances, failure to comply with AML/CFT requirements can lead to harsh legal penalties.&nbsp;</p><p>A comprehensive AVS check will confirm the validity of the bank account number provided by the company, as well as return detailed information concerning the full account details and type of account, the company name and the company registration number that is linked to the account details provided. &nbsp;</p><p>AVS checks are also an important tool for fraud prevention and risk mitigation. As fraud schemes grow more complex, fraudulent businesses employ increasingly complex tactics to appear legitimate – for example, a recently opened account is a common yet serious red flag. By conducting an AVS check, a business can assess the legitimacy of a company and scan for red flags, thereby empowering the business to make informed decisions and reduce the risk of falling victim to advanced fraud schemes.&nbsp;</p><h2><b>3.) Company Credit Reports&nbsp;</b></h2><p>Assessing a company’s credit score is an important step in verifying its legitimacy and credibility.</p><p>When conducted properly, a comprehensive company credit report should return a credit summary of all associated directors, as well as a calculated company risk score that takes several factors into account in order to generate a detailed and accurate assessment of the credit risk level of a company.&nbsp;</p><p>As part of their national AML/CFT legislation, many countries legally obligate businesses, institutions and organizations to conduct detailed credit assessments before engaging in a wide variety of transactions – in South Africa, Accountable Institutions (AIs) are subjected to an array of such regulatory compliance obligations.&nbsp;</p><p>Furthermore, as with company registration checks and company AVS checks, company credit reports are an important tool that a business can use to scan for red flags and mitigate the risk of fraud.&nbsp;</p><h2><b>4.) Company Sanctions Checks</b></h2><p>It is important to check whether a business is under any sanctions, features on any watchlists or is politically exposed. Failing to conduct a sanctions check can have serious consequences and has the potential to cause serious harm to a business for several reasons.&nbsp;</p><p>Firstly, conducting business with an organization that is under sanction can put your business in serious breach of the law. If a business is found guilty of violating sanctions, regulators and law enforcement can impose strict penalties and costly fines, or even impose new sanctions on the business itself as punishment for violating sanctions law.&nbsp;</p><p>Secondly, conducting business with a company, institution or organization that is politically exposed or has a lot of adverse media published about it risks exposing a business to controversy and public fallout that can cause serious harm. By conducting a sanction check, a business can know exactly who it is about to go into business with and therefore make informed decisions about whom it associates with.</p><h2><b>Identity Verification, Data Validation and KYB Services for South Africa</b>&nbsp;</h2><p>By conducting these checks on businesses, one can better ensure that you are not doing business with malicious actors who are trying to fool, manipulate and defraud your business.&nbsp;</p><p>As South Africa’s leading provider of world-class due diligence and remote-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services and see how we can empower your business, contact our team <a href="https://thisisme.com/contact-us" target="_blank">here</a>.&nbsp;</p>

Overview of social engineering fraud and how it can be mitigated by Know Your Business (KYB) protocols for identity verification and data validation.

Social Engineering

<h1 class="title">Resources</h1>
<h2 class="sub-title m-b-10">Great resources on Terms</h2>