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Singapore's know-your-customer utility experiment hits snag: MAS
THE Monetary Authority of Singapore (MAS) has hit a snag with its proposed centralised know-your-customer (KYC) utility, with the idea first raised a year ago, it told The Business Times.
The shared KYC utility was meant to allow financial institutions to identify and verify potential customers' details in a more seamless way.
The KYC utility would have created a more efficient way of checking against sanctions and blacklists, and could have fundamentally changed the way banks labour through documents to block illicit funds out of money laundering or terrorism financing activities from being channelled through the banking system here.
In an interview with The Business Times, managing director Ravi Menon said this is a project that the MAS has been plugging away with banks and has not succeeded in cracking it yet. The challenge in setting up the project has come down to cost, rather than technology.
He added that greater complications arose from streamlining KYC processes for corporates than individuals. Financial institutions would among other things, have to figure out the beneficial owners of entities such as shell companies, which creates complications in establishing credentials.
Individuals, on the other hand, are already able to sign up with banks and fintechs as customers quicker than before. Indeed, several financial firms and fintechs now offer instant online verification, by tapping MyInfo, Singapore's central data repository.
The KYC utility idea was announced officially at the Singapore Fintech Festival in 2017. Mr Menon then said that the service would be "transformative". Besides harmonising and enhancing KYC checks across the industry, the service was meant to raise the quality of risk management, as well as reduce cost and processing time.
The aim had been to put the KYC utility in place this year.