In today’s financial environment and specifically for businesses that are Accountable Institutions in terms of the FIC; customer screening has become one of the most critical, and most complex, compliance requirements. Regulators across the globe expect businesses to identify and manage risks linked to politically exposed persons (PEPs), individuals on sanctions lists, and those identified in adverse media. Beyond regulation, however, the ability to properly screen clients is also the foundation of trust in the financial ecosystem. Without it, businesses are exposed to fraud, money laundering, and reputational damage that can undermine even the most established brands.
This was the message shared by Hennie Vermaak, Director of Finintel, a FIC Compliance Solution Provider, during a recent episode of the Power of Payments Podcast hosted by Amplifin. Vermaak stressed that screening should not be seen as a “tick-box” exercise, but rather as the first line of defence. “If you do not know who you are dealing with, you are flying blind,” he said. “Screening gives you visibility. Without it, you expose your business, your shareholders, and the financial system itself to unnecessary risk. Whether that’s money laundering, terrorist financing, or even proliferation. These are not abstract threats; they are real risks that can damage reputations, attract penalties, and undermine trust.”
The challenge of scale and accuracy
The reality of screening, Vermaak explained, is that it is not a matter of checking a handful of names. “In practice, you might be screening a large number of individuals against global databases. And risk is dynamic. A person who is clear today may appear on a sanctions list tomorrow,” he noted.
All Accountable Institutions are required to on an ongoing basis screen their customers against recognised and reliable database sources in order to validate and verify that their clients aren’t on sanction lists, PEPs, PIPS etc.
Understanding PEPs without assumptions
One of the most scrutinised categories in screening is that of politically exposed persons (PEPs). Vermaak cautioned against blanket assumptions: “Businesses are not prohibited from doing business with PEPs. PEPs are not higher risk by default. But they do carry higher risk exposure because of the positions they hold and the influence they can exert where money and decision-making intersect.”
This higher risk means businesses are expected to apply enhanced due diligence, including stricter onboarding protocols, closer monitoring, and additional oversight. “The key,” he explained, “is to recognise the risk profile and manage it responsibly.”
The role of automation and the RMCP
Technology plays a decisive role in managing the scale of modern screening requirements. “The good news is that you can automate most of your screening process,” Vermaak explained. “Automation allows you to handle screening volume effectively. Human intervention is only needed when higher-risk individuals are identified.”
This is where the Risk Management and Compliance Programme (RMCP) comes into play. Each business must document the methodology it uses to determine what constitutes “higher risk” and outline how those cases are handled. “Your RMCP is your blueprint,” Vermaak said. “It shows regulators and stakeholders that you are not just screening randomly, but that you have a structured, documented process to escalate higher-risk cases and report on suspicious transactions that may be linked to money laundering, terrorist financing, and proliferation.”
Why smaller businesses must take screening seriously
Smaller businesses often assume screening is a requirement for large corporates or banks. According to Vermaak, that mindset is dangerous. “Criminals don’t care how big your business is. They care about where they can make use of this business to commit financial crime,” he said. “Smaller businesses often have fewer resources and weaker controls, and that makes them attractive targets. Regulators don’t give you a free pass because you’re small, the principle of ‘know your customer’ applies to everyone.”
Screening as an investment in trust
Too often, businesses view screening as a regulatory burden or cost centre. Vermaak argues this approach misses the bigger picture. “Nobody wants to see their name in headlines because they onboarded someone linked to crime or terrorism. Screening protects you from reputational collapse. More than compliance, it builds trust with your stakeholders and in some industries, it even becomes a competitive advantage.”
The future of screening
Looking ahead, Vermaak believes the demands on screening will only intensify. “The trend is clear: more regulation, more data, and more accountability,” he said. “We’ll see AI and machine learning playing a bigger role in cutting through the noise, but the responsibility will still sit with businesses. Regulators won’t lower the bar.”
His advice for businesses is simple: “Do not treat compliance as a silo. Screening touches every part of your operations. Build a culture where compliance is seen as good business, not just red tape. The businesses that get this right will be far more resilient.”
Ultimately, customer screening is not just about avoiding fines or satisfying regulators. As Vermaak concluded: “Trust is the currency of finance. If your stakeholders cannot trust you to know who you are dealing with, you have nothing. Screening is how you build and protect that trust.”