SA business skips due diligence on 43% of new employees, clients – report

No initial formal due diligence checks were done on about 43% of new employees, new customers or new clients when they, their products or services were integrated with the business, according to South African respondents to a newly released report by Refinitiv.

The report, entitled “Innovation and the fight against financial crime: How data and technology can turn the tide”, was released on Wednesday.

Furthermore, about 76% of organisations surveyed across sub-Saharan Africa (SSA) reported that they were aware of financial crime in their global operations during the 12 months preceding the survey.

This is despite the fact that an average 5% of global turnover is being spent on customer and third-party due diligence checks.

The 2019 survey reveals that financial crime remains prevalent in the world. Nearly three-quarters (72%) of organisations surveyed across the globe reported that they were aware of financial crime in their global operations during the 12 months preceding the survey.
 
Respondents are, however, aware of the potential of innovation and that technology can help them to address financial crime.

Over two thirds (69%) across SSA are, however, struggling to harness technological advancements, with a greater percentage in Nigeria (71%) than South Africa (66%) expressing this concern.

They indicated that a lack of digitisation may be stalling progress. Across SSA just 56% of the data and legal documentation actually obtained to carry out due diligence is in a digitised format.
 
Respondents did indicate that they are prepared to work together to combat financial crime, with 86% across the globe and 85% across SSA saying that they consider the benefits to outweigh the risks when sharing information and collaborating against financial crime.  

About 97% of South African respondents said they believe technology can significantly help with financial crime prevention, yet 66% in South Africa struggle to harness technological advancements.

About 81% of respondents globally and 83% in SSA said data privacy regulations are restricting their ability to collaborate against financial crime.