MAS to reboot e-KYC project
THE Monetary Authority of Singapore (MAS) will have a second go at its failed electronic know-your customer (e-KYC) project, said MAS managing director Ravi Menon on Wednesday.
The centralised KYC utility idea was first proposed in 2017, and was meant to allow financial institutions to identify and verify potential customers’ details in a seamless way.
The e-KYC utility would have created a more efficient way of checking against sanctions and blacklists.
It could have fundamentally changed the way banks labour through documents to block illicit funds out of money laundering or terrorism financing activities from being channelled through the banking system here.
But in 2018, MAS had announced it as a failure then. While the technology worked, it was far too expensive to implement, said Mr Menon.
“We are taking another crack at it,” he said at a press conference to launch the Bank for International Settlements’ (BIS) innovation hub in Singapore. This time, MAS will look at a “less costly” technology architecture.
Singapore’s plan to resurrect its failed e-KYC project comes as BIS has established one of its first innovation hubs outside of Switzerland in Singapore. One of the hub’s focus will be on public digital infrastructures.
The hub, launched at the sidelines of the Singapore FinTech Festival and Singapore Week of Innovation and TeCHnology (SFF x SWITCH) conference, will work on setting up a framework that is built on digital identity, consent and data sharing.
The second project is to create a digital platform for supervisory tech, or suptech, solutions. With this platform, central banks can try to solve regulatory problems by sourcing solutions from the fintech community.
The BIS hub’s setup comes as Singapore is eager to build new highways for the digital economy, amidst the headlines dominated by geopolitical risks, anti-globalisation and political polarisation, said Mr Menon.
“The financial system must be similarly modern and technologically savvy, and be able to support the digital economy. There’s a lot of work that needs to be done on this front.”
Against that backdrop, Mr Menon said there is a chance to see how the work on Singapore’s “KYC 2.0” can dovetail into work to be also done by BIS at its innovation hub here.
The e-KYC project requires a global effort, Mr Menon added, pointing out that at this time, regulators do not allow a straight transfer of accounts across borders – say between a bank in the UK, and a bank in Singapore – even though a customer has passed his or her KYC requirements in the original jurisdiction.
“This (e–KYC) is a concrete example where you need as much of a global approach as possible,” he said.