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MAS has developed a new platform that will allow banks to securely share information and warn each other of potential criminal activities.
The Monetary Authority of Singapore (MAS) was working with the law enforcement and the industry to develop a new platform that will permit banks to share information securely and warn one another about the potential criminal activity.
On Thursday, August 5, 2021, the Assistant Managing Director for Policy Payments and FinCrime, Ms Loo Siew Yee addressed the wealth management sector and said that the details of this new platform are being finalised and will be disclosed soon.
To enhance AML effectiveness, Ms Loo discussed the use of data analytics. She also shared how the new platform will give rise to a paradigm shift in criminal activities at three levels; the customer level, the network level and the system level.
Data analytics help firms know their customers better. Moreover, analytics allow companies to detect and assess changes in customer risk profiles in a more timely and dynamic way.
The conventional approach does not suffice for reporting changes in transactions, ownership or business profile. Ms Loo said,
“Using technology solutions, it is now possible to integrate and analyze changes in the customer’s behavioral, transactional and profile data holistically and in a more timely manner.”
Data analytics assist in identifying and disrupting the illicit flow of funds between network and customers taking a more holistic view of customer’s activities and behaviors.
Focusing on entity-level assessment may fail to detect transactions that are part of larger nefarious activities, she said. Many financial institutions (FIs) have employed network link analysis for detecting and visualising connections among customers and flow of transactions.
Close collaboration between private and public sectors can assist in magnifying the effectiveness of data analytics as it allows financial institutions to alert each other regarding any risks, for instance, when perpetrators layer transactions across multiple FIs to dodge detection.
Pointing to the Wealth Management Institute Nanyang Technological University’s research for privacy-protected sharing across the finance sector, Ms Loo said,
“In overcoming this issue, it is important to ensure that the interests of legitimate customers are not unduly impinged upon.”
She concluded by highlighting the fact that financial institutions have to actively consider training sessions for staff to ensure that they are able to use the new data analytics tools and properly apply the insights they generate.