MAS issues guidance to allow use of innovative technology solutions for customer on-boarding
The Monetary Authority of Singapore (MAS) has issued new guidance to financial institutions (FIs) on the use of innovative technology solutions to facilitate safe, non-face-to-face (such as electronic or telephonic) customer on-boarding.
MAS regulations require FIs operating in Singapore are implement robust controls when onboarding new customers, e.g. when opening a bank account, to detect and deter money laundering or terrorism financing. These obligations in any customer on-boarding process can be costly, laborious and duplicative.
MAS already allows FIs to carry out non-face-to-face (NFTF) verification of customer identity, provided adequate measures are in place to guard against impersonation. MAS has provided additional guidance that these measures could include biometric identification, real-time video conferencing, and secure digital signature using Public Key Infrastructure (PKI)-based credentials, issued by accredited Certificate Authorities under the Electronic Transactions Act.
MAS will also allow the use of MyInfo for NFTF customer identification and verification. MyInfo is a digital personal data service where citizens need to provide their personal data only once to the government, instead of doing so repeatedly for every single government electronic transaction. In October 2017, all registered SingPass users will have a MyInfo Profile by December 2017.
In May 2017, a pilot with four banks (DBS, OCBC, UOB and Standard Chartered) was launched to enable people to use their registered profile on MyInfo service to apply for new bank accounts. The pilot saw application timings shortened by as much as 80%.
Now this is being extended to all FIs. FIs that have been given access to a customer’s MyInfo data, will not be required to obtain additional documents to verify a customer’s identity. FIs using MyInfo will also not be required to separately obtain a photograph of the customer. The use of MyInfo is expected to streamline customer due-diligence checks across the financial industry, and improve the quality of risk management while saving time and costs.
Ms Ho Hern Shin, Assistant Managing Director (Banking & Insurance), MAS, said, “MAS encourages FIs to use technology that helps to increase efficiency and improve the customer on-boarding experience while safeguarding against money laundering and terrorism financing risks. FinTech firms can also capitalise on the MyInfo platform, with customer consent, to develop innovative financial solutions for FIs to enhance customer experience.”
At the Singapore FinTech Festival 2017, Mr Ravi Menon, Managing Director, MAS, revealed that MAS is working closely with local and foreign banks to explore a Banking KYC Shared-Services Utility that will streamline end-to-end KYC. This is a potentially transformative project, as it will harmonise and enhance KYC checks across the industry, improve the quality of risk management while reducing cost and time taken.
There have been other KYC related initiatives Last year, OCBC Bank, HSBC and the Mitsubishi UFJ Financial Group, together with the Infocomm Media Development Authority of Singapore (IMDA), became the first consortium in south-east Asia to successfully complete a proof-of-concept for a Know Your Customer (KYC) blockchain. The platform which enables structured information to be recorded, accessed and shared across a distributed network using advanced cryptography. It allows banks to collect, validate and share customer information – with the customer’s consent – accurately, efficiently and in a secured manner.