News Risk Management25 Jul 2018

Singapore:Regulator highlights two new focus areas in combatting financial crime

25 Jul 2018

The Monetary Authority of Singapore will focus on two areas in the coming year in its strategy to combat financial crime, said its assistant managing director (banking and insurance) Ho Hern Shin at the Association of Banks in Singapore's Financial Crime Seminar last week

She highlighted that there will be stronger leverage on technology and closer collaboration both within the government and with the industry to facilitate regular sharing of information by all stakeholders, which improves situation awareness, helps spot emerging risks quickly and devise effective mitigating measures.  

Stronger use of technology and analytics

MAS has enhanced its use of analytical tools to make sense of the vast amount of data it possesses, in particular the suspicious transaction reports (STRs) regulated financial institutions file annually. Applying data analytics to this data set has enabled the identification of suspicious funds and flow networks, and focus supervisory attention on networks of higher risk accounts, entities or activities.

“While the results thus far have been promising, we hope to further refine and fine-tune our processes by improving the quantity and quality of our source data inputs. To this end, MAS is working closely with the Suspicious Transaction Reporting Office (STRO) on the re-design of the STR forms and implementation of the new STRO Online Notices And Reporting platform (SONAR),” said Ms Ho.

A revised STR form and reporting platform, to be implemented in August, is to improve the richness and machine readability of STR data and enable more in depth and efficient analysis and management of risks for collective benefit.

Closer collaboration with the industry

To promote closer collaboration within government and with industry, Ms Ho said that the government has formed an inter-agency working group, comprising supervisory bodies and law enforcement agencies to deepen collective understanding of key ML/TF risks, prioritise cases for investigation, and facilitate enforcement against ML/TF cases.

While Singapore regulators and law enforcement agencies are already in close and constant contact with financial institutions for assistance on specific cases, whether be it through information requests from MAS, or feedback provided by law enforcement agencies on specific typologies, Ms Ho noted that there is room to improve the public-private collaboration on this, for example through the sharing of more detailed context so as to enable financial institutions to mount more targeted checks. “We are now actively considering how we can improve the process of information sharing with financial institutions for this purpose,” she said.

Ms Ho acknowledged that banks must strike a balance between addressing money laundering and terrorist financial risks and meeting basic banking needs, but should not avoid entire classes of customers altogether, as MAS looks to build a more inclusive society with greater financial participation.

“To this end, we would like to work with banks to co-create solutions, for example, to explore the feasibility of introducing basic bank accounts for individuals with features and restrictions that, on one hand, are sufficiently permissive to enable the customer to perform daily functions, while at the same time ensuring there are adequate safeguards to mitigate the risks of the bank account being misused,” she said.

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