KYC, AML, FICA & Document Verification FAQs

KYC stands for Know Your Customer. It is the process of identifying and verifying a customer before or during a financial or business relationship. KYC confirms who the customer is, validates the information and documents they provide, and builds an understanding of their profile and expected activity. It is a foundational requirement for regulated organisations and sound practice for any business onboarding new customers.

AML stands for Anti-Money Laundering — the policies, procedures, controls, monitoring and risk-management measures designed to prevent, detect and respond to money laundering and related financial crime. AML frameworks typically combine customer identification, risk assessment, PEP and sanctions screening, transaction monitoring and record-keeping.

FICA — the Financial Intelligence Centre Act, 38 of 2001 — is South Africa's principal anti-money laundering and counter-terrorist financing legislation. It places obligations on accountable institutions to identify and verify clients, apply a risk-based approach, keep records, train staff and report certain information to the Financial Intelligence Centre.

CDD is the process of understanding a customer, the business relationship, the ownership structure behind corporate customers, their expected activity and the risk the relationship presents. It combines identification and verification with assessment, creating a documented basis for onboarding and risk decisions.

A UBO — Ultimate Beneficial Owner — is the natural person who ultimately owns or controls a company or other legal entity. Where a business is owned by other businesses, ownership is traced through each layer until the individuals at the top are identified. The concept prevents corporate structures from concealing who truly benefits.

A Politically Exposed Person is an individual who holds or has held a prominent public position — such as a senior government official, politician, judicial or military figure, or state-owned enterprise executive — together with their family members and close associates. Being identified as a PEP does not mean that an individual has committed a crime.

The process of checking relevant individuals, businesses and counterparties against applicable sanctions and restrictions to avoid prohibited dealings. Effective programmes cover customers, UBOs, directors, signatories and transaction parties, together with jurisdiction-based considerations.

Source of Funds asks where the particular money involved in a specific transaction originated — for example a salary, property sale, business distribution or investment redemption. It is transaction-specific: the question is not how wealthy the customer is, but where this amount came from.

The ongoing review of financial activity for patterns or transactions inconsistent with a customer's known profile, expected activity or risk profile. It is a core AML control — the mechanism by which institutions notice when real-world activity diverges from their understanding of the customer.

The assessment of a document's authenticity indicators — its structure, security features, internal consistency and content — together with confirmation against issuing sources where available. The outcome is documented with the methods used and their limitations stated plainly.