Saturday 15 October 2016

How positive is the FATF really about the AML/CFT environment in Singapore

Anti-money laundering and counter-terrorist financing measures in Singapore – 2016
Many have already commented on the report FATF mututal evaluation Singapore, we took some time to read and reread the report. In this article we’ve summed up our comments and take-aways.
It took a while to release the report apparently, the FATF onsite visit was almost a year ago (Nov/Dec 2015), perhaps because the findings are of a mixed nature. Most comments are quite positive but without being too pessimistic: many comments that indicate some substantial improvements are possible and needed.
Let’s start with the good news. Singapore is found to have “a highly sophisticated coordination on AML/CFT and FIs demonstrate a reasonably good understanding of ML risks”. The National Risk Assessment has provided a sound basis for private and public sector to understand ML/TF risks and specifically domestic measures in FIs are considered adequate.
Looking at the effectiveness ratings 4 areas score ‘substantial’, 6 ‘moderate’ and 1 ‘low’. The technical compliance ratings 18 areas score ‘compliant’, 16 ‘largely compliant’ and 6 ‘partially compliant’. We leave it up to the reader to decide if that’s good or bad.
Let me cite also some less positive statements from the report. “No adequate risk assessment was done on all forms of legal persons and arrangements.”  “Challenges were faced in executing MLA requests in a timely manner.”  “The national risk understanding reflects a disproportionate focus on domestic predicate ML and domestic FIs demonstrated a less sophisticated understanding of ML and TF risks facing them.” “Given the inconsistencies in both the NRA and the individual assessment of risk in FIs, targeting on the basis of ML/TF risks is not optimal.”
Skipping to the prioritized recommendations we can see a few trends:
1.       More focus on non-FIs.
2.       More measures targeted at specific risks – properly reflecting amongst others risks inherent to the nature of Singapore’s financial services industry in which 77% of the funds managed has a foreign origin.
3.       An approach which is less ‘just ticking the box’ and more focused on actual risks.
4.       More focus on complex and foreign predicate money laundering.
Combating financial crime is not easy – we all know that – Singapore has come a long way and as the report concludes the regulatory framework is sophisticated. Reading between the lines though, the report is not altogether that positive. Having a world class regulatory framework is by no means enough; FIs and other players in the financial markets will need to do more than just ‘tick the box’ and truly understand risks and implement programs to mitigate those risks; there’s more work to be done.
Much more.

Comments are welcomed at

Thursday 13 October 2016

3 tips to reduce the cost of compliance

The following article by Piotr Kaminski is spot on and talks about all the things that i-KYC is practicing day in day out. It addresses the question “why do so many banks still don’t get it right after all these years and still face fines and regulatory sanctions”. The i-KYC consultants know all about this and help our clients day-in-day-out to address the issues.

Read the article and keep the following 3 pointers in mind
      1. The compliance team acts in an advisory and policy setting role – if an organization wants to seriously manage regulatory risks and lower the cost of compliance – it needs to solve fundamental control issues in the 1st Line of Defense.
       2. The organization could or perhaps should form a team – in the 1st LoD – to manage operational execution of AML/CFT processes and performsprocess walk-throughs, quality assurance on operational execution, efficiency monitoring and measures and manages customer experience.
       3. Don’t just tick-the-box but really manage the residual risks taking into account not only the policies in existence but also the quality of adherence to policy.

All companies face an increased cost of doing business as a result of increased regulation. How high the cost of compliance is, is not a given. It can be managed and reduced. 

If you want to know how…. Contact us at or find us on