MAS encourages use of technology solutions to facilitate customer due diligence

13 March 2018

In the first quarter of 2018, MAS issued a consultation paper and a circular that indicated MAS’ leaning towards optimizing technology use to facilitate customer due diligence through non-face-to-face (NFTF) means.

Whilst the notice and guidelines on prevention of money laundering and countering financing of terrorism (AML Notice and Guidelines) issued by MAS allow Financial Institutions (FIs) to onboard a customer through non-face-to-face methods, there was a gap in terms of guidance from MAS around how to onboard customers through NFTF means. MAS’ circular issued on 9 February 2018, closes this gap (the Circular).

The Circular allows FIs to use innovative technology solutions such as biometric identification, real-time video conferencing or secure digital signatures[1] to onboard a customer through NFTF means. MAS will also allow the use of MyInfo for NFTF identification and verification of customer information. For the uninitiated, MyInfo is a digital service that has been put in place to enable individuals in Singapore to authorize FIs (and other service providers) access to their personal data that has been verified by the Singapore Government. Information accessed through MyInfo will not be required to be verified by the FIs. The amount and time spent by FIs in collecting and verifying such information will be drastically reduced as all FIs in Singapore can streamline their due diligence checks with the pre-identified and pre-verified information.

Keeping in line with the above guidance issued by MAS to facilitate use of innovative technology amongst all FIs, MAS has also proposed to remove the requirement for pre-approval of NFTF onboarding from the AML Notice and Guidelines applicable to money changing and remittance business licensees (MCRBs).

To ensure that FIs use suitable and reliable technology, MAS requires that FIs who will rely on new technology solutions to perform due diligence checks through NFTF means will be required to include a once-off independent assessment conducted by an independent qualified consultant or an auditor to certify that at the end of the first year post-implementation of the new technology it has been effective in managing impersonation risk.

We, at Bovill, are suitably experienced to help you devise your policies and procedures to address specific AML/CFT risks associated with onboarding customers through the NFTF means. We can also help in assessing whether your technology has been effective in managing impersonation risk.

[1] Using Public Key Infrastructure (PKI)-based credentials

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