RSK4802 Assignment 1 2025
Unique Number:
Due Date: 29 May 2025
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
, For additional support +27 81 278 3372
QUESTION 1
KEY RISKS THAT THE BANK MAY FACE AS A RESULT OF ITS NON-
COMPLIANCE WITH THE STATUTES
Capitec Bank’s non-compliance with the Financial Intelligence Centre Act (FIC Act)
exposes the institution to several serious risks.
Regulatory risk.
The administrative sanctions, cautions, reprimands, and substantial financial
penalties (over R56 million) highlight the risk of further regulatory scrutiny. Non-
compliance could also result in the withdrawal of licenses or harsher penalties if
repeated in the future.
Reputational risk.
Financial institutions depend heavily on public trust, and sanctions from the South
African Reserve Bank (SARB) damage the credibility and reliability of Capitec in the
eyes of customers, investors, and business partners. A damaged reputation could
lead to loss of market share and customer attrition.
Financial risk.
Beyond the immediate fines, non-compliance increases costs related to remediation,
hiring compliance experts, upgrading systems, and potential future litigation. The
impact on profitability can be significant over the longer term.
Operational risk
Capitec’s failure to timely report suspicious transactions and attend to alerts within
prescribed periods points to weaknesses in internal processes, systems, and risk
management frameworks. Such weaknesses expose the bank to the possibility of
facilitating financial crimes like money laundering, potentially leading to even bigger
legal consequences.
Therefore, these risks—regulatory, reputational, financial, and operational—are
interconnected and could threaten Capitec’s future stability if not swiftly addressed.
The need for urgent corrective actions and a stronger compliance culture has
become essential to safeguard the institution.
Unique Number:
Due Date: 29 May 2025
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
, For additional support +27 81 278 3372
QUESTION 1
KEY RISKS THAT THE BANK MAY FACE AS A RESULT OF ITS NON-
COMPLIANCE WITH THE STATUTES
Capitec Bank’s non-compliance with the Financial Intelligence Centre Act (FIC Act)
exposes the institution to several serious risks.
Regulatory risk.
The administrative sanctions, cautions, reprimands, and substantial financial
penalties (over R56 million) highlight the risk of further regulatory scrutiny. Non-
compliance could also result in the withdrawal of licenses or harsher penalties if
repeated in the future.
Reputational risk.
Financial institutions depend heavily on public trust, and sanctions from the South
African Reserve Bank (SARB) damage the credibility and reliability of Capitec in the
eyes of customers, investors, and business partners. A damaged reputation could
lead to loss of market share and customer attrition.
Financial risk.
Beyond the immediate fines, non-compliance increases costs related to remediation,
hiring compliance experts, upgrading systems, and potential future litigation. The
impact on profitability can be significant over the longer term.
Operational risk
Capitec’s failure to timely report suspicious transactions and attend to alerts within
prescribed periods points to weaknesses in internal processes, systems, and risk
management frameworks. Such weaknesses expose the bank to the possibility of
facilitating financial crimes like money laundering, potentially leading to even bigger
legal consequences.
Therefore, these risks—regulatory, reputational, financial, and operational—are
interconnected and could threaten Capitec’s future stability if not swiftly addressed.
The need for urgent corrective actions and a stronger compliance culture has
become essential to safeguard the institution.
