In 2014, the Monetary Authority of Singapore (MAS) embarked on the most comprehensive financial crime and compliance review in its history. The review exposed anti-money laundering (AML) failings in client due diligence and transaction scrutiny. In June 2016, in a bid to combat these issues, the country put policies related to money laundering and unlawful financial risks in place. Its AML department now also monitors how risk is handled with the help of a dedicated supervisory team.
On top of its AML overhaul, MAS has chaired the Financial Advisory Industry Review (FAIR), which evaluates the financial advisory industry in-depth. FAIR, which has been underway since early 2015, aims to improve the distribution of life insurance and investment products. This improvement has resulted in full fees and commission disclosure, sophisticated data capture, storage, and analysis.
But it’s not only compliance that the MAS is concerned with. As Chris Hamblin, Editor of Compliance Matters, states states in WealthBriefing’s report, Global Compliance and Innovation Trends in Wealth Management, “Singapore’s Monetary Authority […] has a long regulatory reach through its chain of agreements with other regulators and is keen to foster innovation.” While Singapore has definitely clamped down on regulatory oversight in recent years, it’s still one of the most digitally mature markets in the world, according to WealthBriefing’s report. And because of this, the MAS has worked hard to not stifle digitalization within financial services, while at the same time creating more compliance for the industry.
For example, the government is openly facilitating the spread of seamless digital client onboarding. Ross Scott, Consulting Director at Deloitte Singapore, explains in the study, “To open a wealth management account in a local Singaporean institution you can request an appointment via an interactive phone app. Then, at the appointment, wealth managers have the ability to process KYC data and confirm compliance immediately, thereby allowing the issuance of new card, online account activation, and mobile banking within the hour.” The MAS also organized the first International Technology Advisor Panel in 2016, where 500 industry professionals, academics, and university-level students came together to discuss innovative new technologies and seek ways to produce regulations for FinTech without hindering growth.
But while this shows that Singapore is working to promote innovation for financial companies in order to enhance the customer experience, there’s still room for improvement. Scott also claims that despite Singapore’s progressive regulatory atmosphere, many firms’ data systems are simply not up to par. According to WealthBriefing’s research, “53% of risk and regulatory executives in Singapore say they do not trust the accuracy of their organization’s data […]” and “[…] over a third of wealth and asset management professionals in Singapore are dissatisfied with their firm’s systems for constructing, managing, and monitoring portfolios.”
It’s clear that while Singapore and the financial companies there have some ways to go, the country is set on a good path to balancing the necessity of compliance with the importance of innovation. The MAS’ proactive engagement is enabling the rollout of regulations that increase cooperation between the financial services industry and regulators. And to top this off, it has proven that it has an open mind and cooperative approach to FinTech.