Let's deep dive into the MAS IAC Guidelines that will be effective this coming September!



Chye Kit alongside three other respectable panelists coming from different specialties in the financial sector, came together to give the audience an in-depth informative session on the conduct with two specific objectives set by The Monetary Authority of Singapore (MAS) and Individual Accountability and Conduct (IAC) guidelines, which are:


1. To ensure ethical business practices that safeguard customers’ interests

2. To ensure robust risk management that support Financial Institution’s (FI’s) safety and soundness

The webinar started off with a fundamental question regarding some significant requirements and the complexity dealing with the IAC outcomes for financial industry players of different scales, which Chye Kit first left a good answer to.

Significant requirements underneath these 5 outcomes, how companies of different scales react to them and what are the complexity deals with these requirements?

Chye Kit elaborated that the IAC guidelines is a perfect evidence of MAS shifting its regulatory framework from a prescriptive perspective in the past to a principle-based approach today. Even for smaller FIs, they are still required to work towards complying with all the outcomes, and if they do not have the means to get to the end, it might be quite troubling and difficult for smaller companies to keep up with the guidelines. In contrast, it would be less of a struggle for big corporations operating across multiple jurisdictions that have already implemented supervision requirements for internal management across the world. Nizam, the CEO of Ethikom Consultancy, added that a lot of misbehaviors in the markets could contribute to a company’s bad compliance culture arising from gaps in a government framework. As a consequence, given the flexibility to exclude irrelevant guidance, it’s still imperative for FIs with lower headcount to hit the outcomes by establishing a clear management structure and reporting relationship.

To which extent do the panelists think the MAS and IAC would have a tangible impact in actually driving accountability and ultimately raising the standard of the financial services industry?

Helen, Group Chief Auditor of The Bank of East Asia Limited, shared her point of view from Hong Kong’s perspective over the issue, giving credits to the positive impact on treating customers more fairly and cultivating a solid risk culture during this journey that requires continuous improvements. Chy Kit added that generally in a long term, IAC helps the firm to drive the right behavior and culture. Whilst implementing it may take a longer period of time, it helps firms to set the scene right. It is therefore important for companies to firstly set their metric reporting right, at the same time, creating awareness for the C-suite management.


Potential implications or unintended consequences that you have seen from experience

Chye Kit reminded the audience of the MAS issuing a consultation paper on the New Omnibus Act along with the IAC guidelines last year in view of expanding harmonized power to issue prohibition orders on individuals. Compliance officers and auditors need to watch out for the potential interplay between IAC guidelines and the consultation paper if a company ends up in circumstances of misconduct by its representative. Helen emphasized that in order to avoid unintended consequences, we must encourage a positive culture upon which people would be willing to report mistakes and errors rather than finger pointing at each other, which could lead to inefficiency in risk management.

What is the most significant challenge for your organization in the implementation of the Individual Accountability and Conduct (IAC) requirements?

Chye Kit shared his thoughts on the imperative capability an organization must possess to conquer the challenge of implementation. Despite the fact that monitoring and tracking systems are there to provide insights to senior managers, the ability to ensure buy-ins are sustainable and secured in view of making implementations easier, hence achieving outcomes. Furthermore, if you are prepared to enforce the IAC properly, the consequences of misbehavior and misconduct have to be implemented consistently across the different rankings within the company.

How does the information paper on Culture and Conduct Practices of FIs published by MAS last September relate to the IAC and what are some key takeaways and practices from the information paper?

Nizam emphasized one of the key changes within FIs is the process of dashboarding and measuring following the information paper. Since it’s always hard to measure good behaviors, the biggest challenge FIs could be facing is to find out the metrics that would most properly determine good or bad outcomes. However, this challenge can be overcome with a proper Balanced Scorecard (BSC) framework and leveraging on technology to measure conduct and manage documenting and reporting. Iris, our simple, easy-to-use automation tool, has enabled many of our clients from the financial services sector to achieve better ethical business practices, culture and conduct within the organisation.


Chin Yee, Head Group Audit for OCBC Bank, mentioned the information paper has come up with a broader scope and coverage of 9 outcomes in total FIs should work towards and individual accountability that is listed as the ninth point relates specifically to the MAS IAC guidelines. Establishing an ethics and conduct board committee as well as culture and conduct management committees is truly beneficial in driving development of risk conduct frameworks. Most importantly, the senior managers need to ensure the core values are well understood across the entire organization so the conduct and culture can be effectively implemented.


It was definitely a compelling session with the panelists yesterday, and we hope that it has opened up fresh perspectives for everyone present in the session, and reached a better understanding of the upcoming MAS IAC Guidelines that will come into implementation this coming September.



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.


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