On 1 December, RHTLaw Asia LLP had organised an Industry Roundtable, where the invited industry panel speakers were involved in a very insightful discussion pertaining to the two Consultation Papers (CPs) that were released recently by the Monetary Authority of Singapore (MAS) - Proposed amendments to capital requirements for locally incorporated Recognised Market Operators (RMOs) and Identity Verification.
The Roundtable started off with a brief introduction on the two CPs, followed by an in-depth discussion on key topics revolving around the CPs. Our CEO and Co-Founder, Mr. Chionh Chye Kit was actively involved in the second part of the session where he, alongside several other esteemed industry thought leaders, shared their views and some interesting industry insights with the audiences on the CP - Identity Verification.
Identity impersonation cases are on the rise these days, where the proliferation of unauthorised financial transactions through non-face-to-face channels starts to surface more frequently. To prevent such phenomenons, MAS has proposed to issue a Notice on Identity Verification to strengthen the level of authentication controls to be implemented by Financial Institutions (FIs). There were three main pointers being discussed during the session:
Comments from the panelists on the kind of FIs (“relevant entities”) that will have to comply with the 2FA requirements
Comments from the panelists on types of 2FA information required by the FI of its customers
Is 6 months from the effective date of the new Notice sufficient time to allow FIs to comply?
During the panel discussion, the panelists shared that Identity Verification falls as one of the pillars within the broad Customer Due Diligence (CDD) framework that is mandatory for organisations to put in place. Anti-Money Laundering (AML) and Counter Terrorism Financing (CTF) requirements are relevant to all organisations in the financial sectors including those that falls under the exempted entities, therefore these Notice should cover these exempted entities equally. The panellist had also come to a consensus that identity verification tools such as 2FA is insufficient to deter fraudulent activities and the more crucial aspect lies in monitoring the ongoing transactions after verifying the users sitting in front of their devices.
In addition, the panellist also shared their observations with regards to regulatory requirements, where they observed that companies would usually do the bare minimum, especially start-ups with limited funds and resources. Hence, they might not have the bandwidth to implement and integrate these advanced technologies as compared to established entities. The panelists therefore highlighted the importance of identity verification, as it is something that organisations should not compromise on regardless of entity sizes.
As shared by Chye Kit, Smart Nation Journey and Digital Identity Journey should be inclusive of both small and large organisations, for them to keep up with the digitisation norm. Organisations can now explore the use of MyInfo SingPass as an authentication tool for their customers. With this, the entire onboarding process is now frictionless as it reduces the need to collect identity documents from clients, thus lowering the possibility of identity theft.
To conclude the 45-minutes panel session, the panelists agreed that technology is a two-edged sword, as much as it provides solutions and streamline work processes for organisations, it also possesses many possible threats. Ultimately, it is all about the preventive and detective controls that are in place in the organisation. 2FA should be the minimum standard across the entire organisation, and organisations should not just comply with the bare minimum, but to go far and beyond, not only for the sake of customer’s experience but also to keep their businesses safe and secure.
We thoroughly enjoyed ourselves at the virtual webinar yesterday, and we hope that the audiences have benefitted from the industry insights that the panelists have provided. We would like to thank the event organiser for having us at the event and we look forward to our next discussion on the MAS CPs moving forward.
About Cynopsis Solutions
Founded in 2014 and headquartered in Singapore, Cynopsis Solutions offers RegTech solutions designed to digitise and automate Compliance and regulatory processes, in particular know-your-customer, anti-money laundering, and counter-terrorism financing. Cynopsis Solutions’ accolades include MAS FinTech Awards (2018), RegTech100 (2018, 2019) and Financial Times Top 50 High Growth Companies in Asia-Pacific.
Our end-to-end KYC/AML solutions are designed according to the global FATF recommendations, applicable to more than 180 jurisdictions and is already helping more than a thousand B2B customers in the Banking, Financial Services, FinTech and Cryptocurrency, Professional Services and Gaming sectors globally.