Pakistan is not the only country where this can happen

This article published in ‘Dawn’ last year not only describes the K&K case clearly but at that highlights some of the underlying issues in Pakistan. A large informal economy, a tradition of sending money abroad and widespread use of hawala networks are the 3 basic factors. Then there’s a widespread use of over- and under-invoicing and the use of other Trade Based Money Laundering techniques involved. Add to that the difficulty to actually prove the money transferred is related to crime and you have a recipe for the disaster described.

A question that comes to mind though is: would a proper country risk assessments have revealed these issues? And: wouldn’t it make sense to do a risk assessment at country level in other counties were similar situations are expected? Just to prevent cases like this. 

The impact of MyInfo in Singapore on the cost of compliance

The MAS had already announced it a while ago but newspapers are picking up on the news of an ‘account opening utility’ now as well (StraitsTimes). The idea is not new of course but it is an achievement and definitely good news for the (individual) customer. Instead of having to fill out forms and bring along different original documents to open an account, an individual Singaporean customer will in future just have to do that once with MyInfo. Thereafter banks can use that information combined with the already available public information for their internal account opening process knowing that all regulatory requirements on documentation have been met.

Is this solving ‘all’ problems with account opening and client onboarding though? Let’s analyze the impact.

For individuals, opening a bank account will become easier, but likely a prospective client will still have to provide information to the bank and will have to sign forms, signature cards, consent forms etc. Not all information that a bank needs to meet regulatory requirement will be in MyInfo

For banks it means a more streamlined onboarding process and the ability to offer a better customer experience.

The harmonization of account opening requirements is a major achievement and creating a common repository for account opening documentation will reduce the burden for individuals to open an account. Further integration with the banks’ Apps and extending the service to more products will even make life more convenient.

If this helps banks in their overall CDD and KYC efforts is yet to be seen. For most banks the bulk of the ‘cost of compliance’ sits in periodic reviews of commercial clients. MyInfo will not provide much relief for that issue.