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Most KYC tools stop at basic name screening and generic risk assessment. Singapore-based iCOMPASS platform goes further.
Designed from the ground up to align with Hong Kong AMLO, iCOMPASS KYC solution provides screening, risk assessment and ongoing monitoring straight-through-processing workflow.
In May this year, Singapore witnessed the 3rd handover of Prime Ministers since its independence in 1965. The new PM Mr. Lawrence Wong has pledged to “lead his own way” while keeping an eye on continuity and stability for the country. We have not witnessed any significant policy changes, but there have been several developments aimed at strengthening governance that are being implemented progressively. We have shared some of these insights in our Quarterly edition of Cambridge Advisers Connects. Some of the recent developments include:
As financial crimes grow more complex and advanced, the Singapore government is regularly revising and enhancing its Know Your Customer (KYC) regulations, Customer Due Diligence (CDD), Politically Exposed Person (PEP checks) and Sanction checks to stay aligned with the evolving nature of business activities. Regulators including Singapore central bank, Monetary Authority of Singapore (MAS) and corporate regulator, Accounting and Corporate Regulatory Authority (ACRA) have since proactively enhanced compliance measures for both financial and non-financial companies. There is also higher expectation of companies who outsource KYC services and CDD outsource to third party providers or to customer onboarding software to maintain oversight of their compliance activities.
Singapore enforces a strict zero-tolerance policy on money laundering. Under the local penal code, individuals found guilty of money laundering-related crimes can face fines of up to USD $365,930, imprisonment for up to seven years, or both. Financial institutions that fail to adhere to AML policies established by the MAS may be fined up to S$1 million (USD $732,958) per violation, with chronic offenses incurring an additional S$100,000 (USD $73,296) per day. ACRA also imposes severe penalties on companies that do not comply with KYC regulations including Sanction check and PEP check, which may include business closure, denial of access to services, and financial penalties.
Importance of Know-your-Customer (KYC)
Singapore, renowned for its robust economy and forward-thinking regulatory framework, has established a thorough KYC regime to mitigate the risks of money laundering and terrorism financing. Businesses operating in the country must stay vigilant and ensure they comply with the most recent KYC due diligence standards, Sanction checks and PEP checks to avoid potential penalties or harm to their reputation. Companies seeking to outsource KYC services and CDD outsource to third party consultant or to customer onboarding software must ensure oversight of the compliance regime to stay relevant and informed.
What’s the Difference Between AML and KYC?
Anti-money laundering (AML) encompasses a comprehensive range of laws, regulations, and procedures aimed at preventing the concealment of illegally acquired funds as legitimate, involving processes like transaction monitoring and reporting suspicious activities. In contrast, Know Your Customer (KYC) and CDD is a specific component of AML that concentrates on verifying the identity of clients at the initial stage, ensuring they are who they claim to be, and evaluating any potential risks they may pose for money laundering or terrorist financing. While AML adopts a broader strategy to combat financial crime, KYC and CDD serves as the starting point, emphasizing identity verification and risk assessment of clients. Financial and non-financial company who outsource CDD and/or outsource KYC to customer onboarding software or to third party companies must be familiar with such terminologies to understand the compliance regime and keep yourselves abreast with the latest regulations.
Regular Controls and Record-Keeping
Regular controls and record-keeping are essential elements of a robust KYC compliance program. KYC and CDD regulations mandate that financial institutions and other businesses conduct periodic reviews and audits of their clients’ information to ensure it remains accurate and current.
Alongside regular controls, record-keeping is a fundamental aspect of KYC compliance. This involves generating and maintaining detailed documentation of a client’s identity, transactions, and business interactions. These records must be kept up-to-date and readily accessible for audits or investigations.
Effective record-keeping not only supports KYC compliance, Sanction check and PEP check but also aids businesses in detecting suspicious activity, monitoring trends, and managing risks. Accurate and comprehensive records are essential for tracing the source of funds and validating transactions, which is vital for preventing money laundering and other financial crimes.
To manage their KYC compliance program effectively, businesses should establish strong controls and record-keeping procedures that are regularly reviewed and updated to align with evolving regulatory requirements and business practices. This includes ensuring that all employees involved in KYC compliance such as customer onboarding, PEP checks and Sanction checks receive thorough training and understand the significance of maintaining regular controls and accurate record-keeping.
As a business owner or a fund manager, it’s crucial to carefully choose your corporate service providers to ensure that your company complies with all necessary KYC due diligence regulations. Working with a reputable and reliable professional services provider with renowned KYC/AML expertise augmented by our Regulatory Software can help you to meet MAS requirements and ACRA requirements.
In addition, you benefit from the following:
Let us help support your business so that you can focus on what matters most. Outsource your KYC and customer onboarding needs to us.
In the current environment where businesses faced increased competitions, a smooth customer onboarding journey could be your business competitive advantage. Regulators, Investors and business partners will ask questions such as do you have a compliance framework and KYC regime in place? Have you tested your business continuity plan? How do you mitigate PEP risks? Did your audit report present any material findings? While at the same time, demanding customers abhor the administration burden of having to go through tons of paperwork and screening.
At Cambridge Advisers, our outsourcing KYC/CDD team is made up of a dedicated team of regulatory compliance specialists and business consultants, formerly from Big 4, banks and Monetary Authority of Singapore (MAS), with over 50 cumulative years of experience in compliance, outsource KYC, CDD outsource and audit functions. We also implement risk management and governance framework for corporate secretary companies, fund management companies, family offices and enterprises.
In addition, outsource kyc, conduct PEP checks, CDD outsource, Sanction checks using our award-winning Regulatory Technology software to meet MAS regulations and ACRA regulations. It offers the most up-to-date compliance services to businesses including corporate secretary firms and fund managers, making it easier for them to meet KYC due diligence regulatory requirements of Singapore’s regulators including that of MAS and ACRA.
Yes all companies are allowed to outsource KYC, CDD outsource to qualified third party consultants or customer onboarding software. Companies are expected to maintain oversight of their compliance regime. For fund management companies above S$1 billion, they are further required to have a dedicated compliance function but they can also engage a compliance adviser alongside their compliance personnel.
A professional compliance consulting firm has the right expertise to interpret and simplify rules and regulations for your business. An experienced consultant will be able to design a KYC and CDD framework that is suitable for your business and share industry insights and practices. The end result is a compliant business with reduced compliance costs and increased business competitiveness.
An outsourced compliance firm can provide partial to full outsourced compliance solutions, depending on your company needs and setup. When you outsource KYC services of AML services, make sure that the consultant is aware of the MAS regulations and ACRA regulations.
It is recommended that a regulated financial institution go through compliance audit regularly, typically not lesser than once every 3 years.
When you have a trusted outsource KYC consulting firm by your side, they can provide you with up-to-date knowledge of the various compliance regulations and their requirements. This will allow you to determine what suits your industry and organisation. The professional consultant will also enable you to understand the compliance liabilities and associated risks.
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