IMX Software has developed functionality for its GTS Retail solution that streamlines regulatory reporting for financial institutions in southern Africa dealing in foreign exchange. The compliance software enables banks, retail forex bureaus and remittance providers in the Common Monetary Area (CMA) to easily comply with the reporting requirements of their countries’ Financial Intelligence Units (FIUs) and central banks.

The CMA links South Africa, Namibia, Lesotho and Swaziland in a monetary union. Financial services institutions operating in these countries face complex reporting requirements of foreign exchange transactions. The reporting rules are cumbersome to implement and maintain in transactional systems, such as treasury and core banking platforms.

IMX’s GTS Retail point-of-sale software uses the CrossBorder/goAML compliance modules for its own reporting and makes the same functionality available to external systems where reporting is not implemented or where an external rules engine is required to validate transactions.

Validation module

The validation module allows GTS Retail and other third-party systems to obtain fields required for regulatory reporting, validates transactions against the reporting rules and reports on completed transactions. This allows institutions to validate transactions and submit validated transactions, as well as transactions that have not been validated, in batch and real-time.

Transactions previously submitted (whether on-line or batch) that do not pass the rules in the validation module, but that still need to be reported on, are placed in a holding queue. Here, administrators can populate or correct certain fields. A full audit trail of the original transaction and any updates is kept.

Separate modules are used for CrossBorder and goAML reporting, each of which submits reportable transactions to the relevant regulatory authority in the required format. Administrators can correct any errors or omissions on rejected transactions and validate the corrected transactions.

Says Hennie Pretorius, General Manager at IMX Software South Africa: “Growing complexity in foreign exchange regulations means that compliance is becoming costlier and more time-consuming for financial services institutions across Africa. Our platform makes it easier for institutions to comply with evolving forex reporting standards while minimizing the changes they need to make to their core transactional systems.”