ICT Views

BSI: a timely reminder for anti money laundering

by: (ICTA Managing Director) on

The Monetary Authority of Singapore (MAS) pulled no punches in announcing sweeping action against BSI Bank Limited, with MAS Managing Director Ravi Menon describing it as ‘the worst case of control lapses and gross misconduct we have seen in the Singapore financial sector’.

MASMAS catalogued a series of failings at the bank , specifically ‘serious breaches in its anti-money laundering requirements’, and the fact that six former and current members of the BSI team, including at CEO level, have been referred for investigation and potential criminal prosecution can leave no-one in any doubt of the seriousness of the case.

Now that the dust has settled a little from MAS’s announcement, it is worth reflecting on the enormity of the regulator’s actions. This is the first time MAS has withdrawn its approval from a financial institution since Jardine Fleming (Singapore) in 1984, long before many of those currently working in our sector were born or would remember.

So MAS has taken a very strong and clear stance on the issue, which some would argue is exactly what is needed from a financial regulator. Others have suggested that the action is a forewarning of how MAS intends to address any issues it deals with relating to the 1MDB affair, something already highlighted by Mr Menon last year, when he promised ‘serious’ action where banks had been found seriously wanting.

A couple of points occur to me. One is that given the anger felt worldwide at the lack of accountability – and punishment – of those responsible for the global financial crisis, and the devastation it caused to individuals and businesses, many people would applaud MAS for its actions and encourage other regulators to follow suit.

My other thought follows on from Mr Menon’s comments in his BSI statement: that the case is ‘a stark reminder to all financial institutions to take their anti-money laundering responsibilities seriously’.

Just a few days after the MAS announcement, I was a keynote speaker and panellist at the Inaugural Corporate Services Providers Conference at Raffles City Convention Centre. The theme of the event was Navigating New Waters and as part of this, I provided a briefing on international trends in anti money laundering and counter financing of terrorism (AML/CFT) for an audience of 500 delegates.

The shock of the BSI announcement means that AML is very much in the forefront of the minds of people like those delegates and their counterparts in financial institutions and many other sectors. It also underlines something that cannot be reinforced often enough: that it is a ‘live’ issue that requires ongoing vigilance and evolution, to reflect emerging trends and threats (like the trade based money laundering I highlighted at the CSP event) and reduce institutional vulnerabilities.

 Something I am always keen to stress is that the vast majority of regulated organisations, both large and small, are investing serious time and resources in high quality AML/CFT regimes, to protect their clients and other stakeholders, themselves and the wider national and international community. One way AML and other professionals can continue to do this effectively, and to equip themselves for navigating the hazards of those ‘new waters’, is to develop their knowledge and skills.

Our qualifications – we’re the only provider of training in AML and governance, risk and compliance accredited under the Institute of Banking & Finance Standards – are a key way of doing this and we’ll be holding our latest free briefing event on 3 August. More information about what we have to offer, and registration for the briefing, is available here.

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