The evolution of technology is enabling myriad capabilities for regulatory and financial crime compliance, but it is also presenting complex financial crime risks, according to a representative from the Monetary Authority of Singapore (MAS) at the International Compliance Association’s second Asia Pacific (APAC) conference this week in Singapore.
Delivering the opening keynote speech, Loo Siew Yee, Assistant Managing Director for Policy, Payments & Financial Crime for MAS, called on compliance professionals to adopt new methods and technologies to improve their anti-money-laundering (AML) and counter-terrorist-financing (CTF) detection and risk mitigation strategies.
Loo then praised the industry for making significant progress over the past two years by using automation, data analytics, and artificial intelligence to enhance the effectiveness and efficiency of controls. Nevertheless, she warned that financial institutions must remain alert to emerging risks and typologies and focus on continuing to develop robust governance, strong risk awareness across all three lines of defense.
According to a report from the United Nations Office on Drugs and Crime (UNODC), each year up to $2 trillion is estimated to be laundered globally, with financial crime having far reaching socioeconomic implications. The International Labour Organization estimates that there are an estimated 40.3 million victims of human trafficking worldwide, with forced labor generating an estimated $150.2 billion per year.
The wider adoption of cryptocurrency is also creating significant opportunities as well as new threats for the global financial industry. As another conference speaker highlighted, according to Ciphertrace’s estimates, between 2009-2018, 380,000 bitcoin ($3.8 billion in today’s prices) was laundered through the world’s top 20 exchanges.
Combating proliferation financing and detecting the abuse of legal persons are core risk concerns for Singapore’s financial sector, Loo remarked. To respond to these evolving threats, MAS is adopting a new data analytics initiative to identify networks of suspicious activity across the entire financial sector.
In preparation for new digital payment tokens (DPT) licensees next year, Loo announced that MAS has started to enhance its supervisory and surveillance capabilities to facilitate the proactive detection of unlicensed DPT activities, and to use “real-time” data gathering to enhance its assessment of money laundering and terrorist financing risks for licensed entities.
“Technological advances offer the promise of a more effective, efficient and inclusive financial sector, but present challenging and complex financial crime risks,” Loo said. “This conference is an excellent chance to compare notes and share ideas as we make strides towards combating financial crime.”
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