Do financial institutions in the city-state face staff shortage in the field of financial crime?

7 August 2017

Compliance professionals in demand as financial crime increases in complexity, says MAS official

The increasingly complex world of financial crimes will require more compliance professionals with a wide range of skills, including those trained in data analytics, said a Monetary Authority of Singapore official.

Financial institutions in the city-state face staff shortage in the field of financial crime, and this has led some institutions to resort to poaching staff from competitors, said Chua Kim Leng, assistant managing director at the MAS.

“Rather than rely on the zero-sum game of hiring off one’s competitors, I would like to encourage institutions to ‘plant your own trees’, ‘grow your own timber’, and seek to develop and retain good talent,” he said.

Continuing education and support provided by the Singapore government will contribute toward increasing the number and capability of professionals in the field of financial crime, Chua said.

The government’s support comes in the form of Workforce SG which offers incentives and training for working professionals wishing to make a mid-career switch into the financial crime profession, and the Financial Scholarship Programme offered by the MAS which co-funds the post-graduate education of specialist leaders in finance.

Build and nurture compliance talent

Chua pointed out the importance for financial institutions to build and nurture compliance talent, and for the professionals in the field to upgrade their skills and expertise. All these will ensure that financial institutions are well equipped in combating money laundering and terrorist financing, Chua said.

“Institutional partnerships or new analytical tools would count for little without the trained, dedicated professionals to make effective use of them and exercise sound judgements,” he said.

Effective due diligence depends on well trained front office staff

Underpinning the effective prevention of financial crime are customer due diligence and transaction monitoring. Effective customer due diligence depends to a large extent on how well staff, particularly those at the front office responsible for relationship management, carries out their job.

Front office staff must have an analytical mind to assess the customers they intend to onboard and they should be trained on the risks posed by onboarding of dubious customers, said Ruchi Sharma, consultant at Bovill in Singapore. These are important qualities required of front office staff aside from chasing sales targets, she said.

“It comes with more experience. Such qualities can also be developed with appropriate training and guidance from the bank’s compliance and training function. Apart from theoretical training on applicable regulations, bank staff responsible for customer due diligence should be provided with real life case studies where possible to understand their role and expectations,” she said.

AML is everyone’s responsibility

Front office staff, being the first line of defence, needs to do critical assessments of customer information, Sharma said.

“Depending on the risk posed by a customer, different banks require different levels of control over the review of customer due diligence. For higher risk categories of customers, it is common for senior compliance officers and senior management of the bank to be involved in the approval process. What is key here, is that AML is the responsibility of each staff, irrespective of their seniority and job function,” she said.

Greater awareness of customer due diligence

There is now greater awareness of customer due diligence at financial institutions as evident from the fact that banks are asking more questions and performing independent validations, Sharma said.

“As banks rely mainly on customers to provide them with information, the information gathered should be validated with independent external sources where possible,” she said.

Maintaining high standards of integrity in the financial industry is a top priority for MAS, Chua said.

“Our reputation as a clean and trusted financial centre depends on our ability to protect it from abuse, and we depend on you in the industry to be our gatekeepers,” he said.

Aug 7 2017 Patricia Lee, Regulatory Intelligence

Patricia Lee is chief correspondent, banking and securities regulation, Asia

Copyright © Thomson Reuters 2017. All rights reserved.

Share this