Discovery Bank has been fined R3 million by the Prudential Authority (PA) of the South African Reserve Bank for a series of compliance lapses under the Financial Intelligence Centre Act (FIC Act).
The sanction highlights gaps in the bank’s internal controls, training, and transaction monitoring systems.
According to the PA, Discovery Bank failed to comply with several administrative provisions of the FIC Act during an inspection period.
The regulator identified shortcomings in the bank’s reporting of suspicious transactions, employee training on financial compliance, and handling of automated alerts from its transaction monitoring systems.
The sanction, issued on November 7, includes a R3 million penalty, of which R1 million has been suspended for a period of 36 months, effective from July 9, 2025.
The suspended amount will only be enforced if the bank fails to meet remediation requirements during this period.
Among the key compliance breaches, the Prudential Authority found that the bank did not timeously file 24 Suspicious and Unusual Transaction Reports (STRs), as required by law.
Additionally, internal training audits revealed that 84 out of 155 new employees had not received mandatory compliance training within the first 30 days of employment, while 47 out of 109 existing employees missed their annual refresher sessions.
The inspection also uncovered operational lapses—specifically, 2,281 automated alerts generated by the bank’s monitoring systems were not actioned within the 48-hour timeframe required by its risk management framework.
Furthermore, Discovery Bank’s Risk Management and Compliance Programme (RMCP) was found to be inadequately documented.
The report cited a lack of clear procedures for identifying cash transactions, defining business days for monitoring purposes, and updating trigger events for compliance review.
However, the regulator clarified that there was no evidence of money laundering or criminal intent, emphasizing that the violations were administrative in nature.
“The findings relate to non-compliance with certain administrative provisions of the FIC Act. There is no indication that Discovery Bank facilitated or was involved in illicit financial activities,” the PA stated.
In response, Discovery Bank said it accepts the findings and is working to strengthen its internal compliance controls.
“We acknowledge the concerns raised by the Prudential Authority and have already implemented corrective actions to address the identified deficiencies,” the bank said in a statement.
Industry analysts say the fine serves as a reminder that even technologically advanced banks must prioritize compliance as much as innovation.
“Regulatory scrutiny is tightening across South Africa’s banking sector,” said one financial analyst.
“This case underscores the growing importance of robust risk management systems in digital banking operations.”
The sanction against Discovery Bank comes amid increased regulatory oversight across the financial sector, as South Africa aligns its anti-money-laundering framework with global standards.
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