The recent release of the information paper from The Monetary Authority of Singapore (“MAS”) contains a thematic analysis of the performance of the various financial institutions (“FIs”) Anti-Money Laundering/Counter Financing of Terrorism (“AML/CFT”) name screening practices in 2021. 

Banks and financial companies primarily contributed to the insights gathered. Subsequently, from the analysis, those common gaps picked out by MAS from the name screening framework adopted by the FIs are resolvable with Regtank’s solution.

Common Gaps

The common gaps are inclusive of four different areas. First, the lack of attention paid by FIs’ senior management has resulted in several deficiencies. One such deficiency is the lack of name screening policies and procedures (“P&P”) which leads to the negligence and inconsistencies of documentation and assessment of the name screening result. 

Second, the frameworks and P&P adopted by the FIs were not thoroughly implemented and utilised in their abilities. This is clear in how the tools are insufficient for batch screening, resulting in manual screening that is prone to mistakes and performed at inappropriate or overdue timing. It also omitted some screenings against the other information sources like adverse news. 

Third, the system parameters and databases of the FIs do not include an improved version of name screening practices for their internal list. For instance, FIs’ current system does not have screening tools with fuzzy matching logic, but only tools that can screen names of exact matches, meaning letter-for-letter. This would hinder the FIs’ ability to identify partial matches because of abbreviations or typography mistakes. 

Last, FIs did not follow the criteria or basis of the alert resolution through. This is evident as some FIs did not determine the standards of documentation, which results in missing records of screening results or insufficient documentation of the basis for alert dismissal. 

How is the Regtank solution in line and able to overcome the deficiencies?

All these gaps compromise the efficiency of the organisation’s business operation and in keeping up with MAS and the AML/CFT’s ever changing regulation. 

Regtank’s digital onboarding and full suite compliant solution that integrates KYC, KYT and KYB, organisations could certainly overcome these deficiencies. This is apparent as Regtank's compliance solution offers a customised risk-scoring engine that is calibrated to the risk profile of the organisation’s activities. During the customisation process, parameters and standards of documentation would have been discussed. 

A 360-degree risk profile that re-screens automatically is provided to manage the risk level of the profiles in Regtank's system. Name screenings tools with fuzzy matching logic are also a part of the system which can aid your organisation screen names effectively and reduce the risk of omission of true hits. Regtank is confident in aiding your company to improve risk awareness and facilitate a timely assessment of name screening solutions.

What are some other tips for takeaway to strengthen your AML/CFT Screening Practices?

Some tips for takeaway from MAS include exercising active oversight on the screening frameworks and P&P and conducting regular assessment and reviewing of name screening parameters to detect potential risk. 

Some guidance to consider when dismissing alerts includes not setting the identification factors that are subject to changes. This includes their passport number, which is mandated to renew every few years; C/O or P.O. address, which is not indicative of the parties’ address; and occupation differences, as one can hold multiple roles or even change occupations. 

Conclusion

Ultimately, name screening is an essential part of the risk rating of customers and the AML/CFT process. Without adequate tools and practices put in place for the screening procedures, organisations will find inaccurate risk assessment of customers and delay in taking precautionary steps in mitigating potential AML/CFT risks. 

Hence, with the alignment to MAS’ supervisory expectation, Regtank's customised solution can aid businesses effectively in evaluating and detecting risk promptly.