Late October the MAS issued a paper on ‘ENHANCING ANTI-MONEY LAUNDERING & COUNTERING THE FINANCING OF TERRORISM MEASURES AND CONDUCT’ following inspections of 300 FI’s done between September 2014 and January 2015 < http://www.mas.gov.sg/~/media/MAS/Regulations%20and%20Financial%20Stability/Regulations%20Guidance%20and%20Licensing/Financial%20Advisers/Circulars/CMI%20052015%20Circular%20to%20financial%20advisers%20on%20enhancing%20AMLCFT%20measures%20and%20business%20conduct.pdf >
Not surprisingly quite a number of issues were found; let’s look at some of the key topics mentioned. Ongoing monitoring of business relations is a key finding as well as the (lack of) frequency of training on AML/CFT. Furthermore, it was found that policies and procedures were not always properly formalized and not applied consistently.
Moreover, it was found that in respect of Identification and Verification not all obligations were always met, that risk assessment criteria were often not formalized and shortcomings in the screening of relevant persons were found. Other observations mention the absence of formal Service Level Agreements in outsourcing scenario’s and the lack of Quality Assurance around AML/CFT processes.
No real surprises here unfortunately; from our own experience we can concur with the findings. The clients that we work with have all made substantial progress in improving their AML/CFT framework, yet there always continues to be room for improvement. Some key areas that we see from our own perspective at i-KYC include the following:
- formalization of policies and procedures – not only need policies be documented, they also need to be clear to all staff and they need to be embedded in day-to-day processes and procedures;
- training, training and more training throughout the organization; at all levels and on all policies;
- consistency in operational execution, supported by a quality assurance framework.
Many FIs still see AML/CFT measures as a burden hence the shortcomings found. For us Integrity Means Business and that implies we ensure policies are adhered to while the organization runs as efficient and effective as possible. That is the real challenge.