Featured image via Singapore FinTech Festival’s Facebook page.
Mr. Ravi Menon, Managing Director, Monetary Authority of Singapore (MAS),
shared at the opening of the Singapore FinTech Festival 2017 about the KYC
utility that would enhance customer on-boarding. “Know Your Customer” (KYC) is
one of the biggest problems and pain points in the financial industry – it is
an obligation in any customer on-boarding but the process is costly, laborious,
duplicative, and still not all that effective in detecting tax evasion or money
laundering.
The Singapore Government has taken the first step with
MyInfo – a single platform containing personal data submitted to and verified
by the government. MAS and GovTech have done a
pilot with several banks to enable customers to open a bank account online
using MyInfo. The pilot saw application timings shortened by as much as 80%.
As the next step, 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 means centralising processes such as leveraging
on MyInfo for customer identification and verification; collecting and
validating KYC documents; and screening against sanctions and blacklists.
The Banking KYC Utility is potentially a 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. If all goes
to plan, the KYC Shared-Services Utility will be in place next year.
Another area that Mr. Menon spoke about that could be transformed was that of
trade finance because currently, it is still largely paper-based and this is not
only inefficient, but increases risks such as fraud and duplicate invoicing. Blockchain
technology offers good promise to make trade finance safer and more efficient.
Last year, DBS Bank and Standard Chartered Bank completed
a proof-of-concept that demonstrated how blockchain technology could enable
banks to detect if an invoice had already been financed. Shortly after, HSBC
and Bank of America did a proof-of-concept
that showed how trade finance processes could be streamlined using blockchains
and smart contracts.
Building on these, MAS and the Hong Kong Monetary Authority will jointly
develop the Global Trade Connectivity Network, a cross-border platform for
trade finance using distributed ledger technology. The development of business and technical models for the GTCN is expected to conclude in Q1 2018. The GTCN is expected to go live by early 2019, to tie in with the targeted go-live dates of the Trade Finance Modules on the National Trade Platform in Singapore and the Hong Kong Trade Finance Platform.
