FINANCE
SOUTH AFRICA’ S FINANCIAL LANDSCAPE IS TIGHTENING ITS GRIP ON COMPLIANCE. OVER THE PAST YEAR, REGULATORS HAVE MADE IT CLEAR THAT CUTTING CORNERS ON FICA OBLIGATIONS IS NO LONGER AN OPTION.
The Financial Sector Conduct Authority( FSCA) imposed a record R943 million in fines in 2023 / 24 for financial misconduct, including breaches of the Financial Intelligence Centre Act( FICA). This represents a substantial increase from R100 million the previous year.
Meanwhile, the Financial Intelligence Centre( FIC) levied additional penalties ranging from R20 000 to R7.8 million on institutions that fell short between April 2024 and April 2025. The stakes are high, with penalties reaching R10 million for individuals and R50 million for companies.
“ Being FICA compliant is a clear sign that a company values transparency, security and responsible business. For instance, cases where proper due diligence was not conducted have resulted in damage and financial loss, such as failing to detect politically exposed persons( PEPs) or flagging high-risk clients. Stringent FICA processes avoid costly litigation and reputational harm by identifying and managing such risks upfront,” says Andrew MacPherson, Paragon Finance’ s Legal and Compliance Manager.
FROM RED TAPE TO REPUTATION
Often dismissed as red tape, FICA’ s true strength lies in what it prevents – money laundering, terrorism financing, and corruption – while supporting legitimate businesses in protecting their operations and reputations. It also serves as a key trust indicator for clients and investors seeking transparent, responsible partners.
The recent removal of South Africa from the Financial Action Task Force( FATF) greylist in October underscores the progress achieved in cleaning up the financial system. This milestone was the result of years of reform bringing local regulations in line with international Know Your Client( KYC) standards.
For alternative funders, where agility and trust are crucial, demonstrating FICA compliance offers a competitive advantage. It reassures clients that due diligence isn’ t merely a formality – it is integrated into every transaction.
COMPLIANCE AS A COMPETITIVE ADVANTAGE
While some major institutions may see fines as part of the cost of doing business, Paragon Finance regards compliance as a key business strength.“ True sustainability comes through transparency and robust governance,” says MacPherson, demonstrating that in today’ s climate, good governance is good business.
As regulatory enforcement intensifies, FICA compliance is no longer just about avoiding penalties – it’ s about building reputation, maintaining investor confidence, and enabling long-term growth.
For South African businesses aiming to thrive in a post-greylisting era, remember that trust isn’ t declared, it’ s demonstrated through compliance. IB
26 INBOUND SA / December 2025