MAS aborts shared 'know your customer' project

SINGAPORE (Nov 12): The Monetary Authority of Singapore (MAS) has scrapped an industry-wide project for banks to share background and personal information of new customers under the “know-your-customer” or “KYC” checks.

Instead of banks conducting KYC checks separately, MAS had intended the data be pooled into a common database from which checks can be made as and when new customers are signed up by banks. This was supposed to help prevent duplication of efforts and reduce costs.

“But the economics did not work out: our proposed solution was going to cost more than the savings that banks will get out of it ... So, we have decided to take a pause on the project,” says Ravi Menon, MAS managing director at the Singapore Fintech Festival this morning.

With the termination of the project, banks will continue to conduct their own separate KYC checks of new customers.

The banks which took part in this KYC project will publish a report later this week on their learning experience.

Menon says the report can hopefully inspire new ideas to help solve corporate KYC problems in the most cost-efficient way because "this is a problem that needs to be solved".

KYC is an increasingly important function as Singapore, as a wealth management hub, attracts more funds from overseas sources. As the 1Malaysia Development Berhad (1MDB) saga has shown, many Singapore-based banks helped handle funds said to be siphoned off the Malaysian sovereign wealth fund.

“We tried, we failed, we will learn, and we will do better next time,” says Menon, referring to the KYC project.