How South Africa Can Combat Financial Crime and Overcome Greylisting

Financial crime is evolving at an alarming rate, with criminals adopting sophisticated methods to launder money and finance illicit activities. South Africa’s greylisting by the Financial Action Task Force (FATF) highlights the country’s struggle to curb money laundering and terrorist financing effectively.

From using deepfakes to forging documents, financial criminals continually find new ways to bypass security measures. A striking example is the case of Mozambican Zingai Dhliwayo, who stole the identity of a South African citizen, Bethal Ngobeni. By altering a photo on an ID document, Dhliwayo spent millions of rands on luxury cars and properties—all financed by the illegal gold trade.

This case underscores the pressing need for stricter financial security measures and better fraud detection systems.

Why Compliance is Critical

To be removed from the greylist, South Africa must enforce tighter anti-money laundering (AML) and counter-terrorist financing (CFT) regulations. Failure to comply with these laws can result in severe financial penalties.

For example:

• In November 2024, a South African law firm was fined R7.7 million for failing to comply with FICA regulations.
• The South African Reserve Bank imposed a R10 million penalty on the State Bank of India for inadequate customer due diligence and cash threshold reporting.

These cases highlight how non-compliance not only damages business reputations but also impacts the country’s financial standing.

Leveraging Technology to Combat Financial Crime

As criminals become more advanced, South Africa’s financial institutions must embrace cutting-edge technology to detect and prevent fraud. One of the most effective tools is biometric authentication with liveness testing.

How Biometric Authentication Helps:

Enhanced Security – Verifies users through unique biological traits like fingerprints and facial recognition.
Regulatory Compliance – Helps businesses meet AML and CFT requirements, reducing non-compliance risks.
Better Customer Experience – Faster and more secure onboarding builds trust and improves user satisfaction.

Liveness detection further strengthens security by analyzing features like skin texture, pupil movement, and facial expressions. This prevents fraudsters from using fake photos, deepfakes, or masks to bypass verification.

The Path Forward for South Africa

The fight against financial crime requires a multi-layered approach, combining regulatory enforcement, business compliance, and smart technology. South Africa’s financial institutions must adopt robust fraud detection systems, biometric verification, and enhanced due diligence measures to combat money laundering and terrorist financing.

By staying ahead of financial criminals and strengthening compliance, South Africa can work towards removal from the greylist and establish itself as a safer, more trustworthy financial hub.

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