Singapore: Banks urged to create basic, ‘risk-free’ accounts
09 Aug 2018

Banks in Singapore have been urged to consider the possibility of introducing bank accounts that offer basic services and also have safeguards from money laundering risks, amid concerns some sectors in society are being denied access to banking.

Although Singapore is a highly-banked country, there are pockets of society that still appear to be excluded, said regulatory official Ho Hern Shin, in a speech at the recently-ended Singapore’s Financial Crime Seminar.

“For example, we would occasionally receive feedback from ex-offenders who have been denied a bank account. In today’s increasingly digital economy, an individual’s access to a bank account linked to card facilities is a bare necessity.

Shin, who is the Assistant Managing Director, Banking and Insurance, at the Monetary Authority of Singapore, agreed with banks that the misuse of bank accounts for illicit purposes should not be condoned, but said there was a need to strike a balance between addressing money laundering (ML) and terror financing (TF) risks and meeting basic banking needs.

“We would like to work with banks to co-create solutions, for example, to explore the feasibility of introducing basic bank accounts for individuals with features and restrictions that, on one hand, are sufficiently permissive to enable the customer to perform daily functions, while at the same time ensuring there are adequate safeguards to mitigate the risks of the bank account being misused,” she explained.

“I recognise that mitigating the risk of money-laundering or terrorism financing presented by certain groups of customers can be more challenging … however, it is important to strike a balance between addressing ML/TF risks and meeting basic banking needs. Banks should not avoid entire classes of customers altogether.”

Shin also made reference to taking a risk-based approach to AML/CFT, where banks assess each customer’s transaction profile on a case-by-case basis, to identify specific ML/TF risks and assess if they can be adequately mitigated.

You can claim CPD minutes for reading this article, by signing up to our CPD Wallet

Must Read

Pursuing unexplained wealth in Nigeria: It’s time to take on the enablers

Despite the efforts of the incumbent President to fight corruption, Nigeria remains one of the countries that constantly top the world’s corruption rankings. According to  Transparency International’s 2017 Corruption Perception Index, Nigeria is one of the most corrupt countries in the world, ranking number 148 out of 180 countries covered… Read More

The perfect AML programme: A ten point guide

Does the ‘perfect’ path to anti-money laundering (AML) exist? The quest for the perfect plan can be traced back to criminals causing immeasurable damage for many economies through money laundering. In response, governments are continuously trying to fight back, issuing a raft of rules and penalties for financial institution (FIs)… Read More