Regulations from Singapore and the Netherlands and the need for training

December 18, 2024

Both the Dutch Central Bank (DNB) and MAS in Singapore have issued new guidelines on the topics of Transaction Monitoring and Customer Due Diligence. Guidelines, not regulations, implying that the regulations are clear, concise and strict enough, but the way financial institutions implement the regulations leaves room for improvement. At the same time no fines have been handed out which suggests regulators have not found major faults either.
Our friends at Ingenia made the following summary of the MAS guidelines  here and the DNB paper can be found here

So what’s going on then? Maybe the guidance is not all that impressive but what else can a regulator do – assuming the regulations itself are fit and proper – when financial institutions ‘don’t get it right’. Maybe it is puzzling why no more fines have been handed down – specifically in Singapore – if these guidelines are needed, and perhaps this needs to be seen as a final warning before fines are given in 2025.
To the seasoned FEC or AML Ops manager a lot of these guidelines are ‘nothing new’. In an operational environment more diligence and rigour are always on the agenda while monitoring effectiveness, efficiency and quality are a constant.
Both regulators stress the importance of awareness. For any financial institution to achieve a state of ‘operational compliance’ it’s not enough for the compliance department and a small number of specialists to know what needs to be done. All staff need to know the basics and understand the role they must play in preventing financial crime. These basics are in many FIs well known by now, although smaller FIs often don’t have their e-learning up to modern standards in place yet.
But in all Fis more work needs to be done to increase knowledge and awareness on specific topics. From our practise – supported by what the abovementioned regulators write – 2 key topics deserve more attention.
Let’s start with the MAS mentioning the ‘holistic monitoring of accounts’ as a key recommendation for financial institutions. Transaction monitoring is in many financial institutions only truly understood buy a limited number of specialists and the discipline relies heavily on monitoring rules embedded in systems that monitor all in- and out-going transactions. These TM engines are important without doubt, but for that ‘holistic monitoring’ much more is needed and many more departments and employees in a financial institution need to know what needs to be done to monitor clients, accounts and transactions. That’s exactly what our new Transaction Monitoring course is all about. It will help all staff in a financial institution understand the end-to-end process, their roles and responsibilities, risks and pitfalls.
The Dutch Central Bank (DNB) has chosen several other topics to highlight; among others Trade Finance and Trade Based Money Laundering (TBML) are considered areas of increased concern. Money launderers don’t sit still and increasingly apply more sophisticated schemes to launder proceeds of criminal activity, which among others leads to an increased use of Trade Finance transactions to launder money. All the more reason for financial institutions to use our Trade Finance and TBML courses to increase the awareness of staff on these topics.