A Report by CYS Global Remit Legal & Compliance Office
The financial landscape in Singapore is witnessing a substantial increase in compliance costs for financial institutions. As a major payment institution in Singapore, CYS Global Remit faces the same challenges. A recent study by LexisNexis Risk Solutions, the figures indicate a significant surge in expenditure to combat financial crimes and adhere to regulatory standards. Here are some of the key points highlighted in the study:
Financial institutions in Singapore spent US$5.7 billion or about S$7.8 billion in the past year alone to combat financial crimes and fulfil regulatory requirements. This represents a substantial increase from previous years, indicating the growing complexity and cost of compliance in the industry.
Global Spending Trends
The total expenditure for the financial sector globally amounted to US$206 billion in the 12 months leading up to June 30. This underscores the magnitude of the challenge faced by financial institutions worldwide in combating financial crimes and meeting regulatory expectations.
Financial firms encounter various challenges in compliance screening, including the identification of direct and indirect relationships between business entities, risk profiling of companies and customers, and managing the influx of crime alerts, including false positives.
Impact on Customer Experience
The study also reveals that the stringent regulatory environment and increased security measures have negatively impacted on the customer experience. The complex web of global regulations and sanctions, coupled with the need for rigorous security checks, has led to delays and inefficiencies in customer interactions.
Adopting Proactive Measures
To effectively combat financial crimes, organizations like CYS Global Remit need to adopt proactive and adaptive strategies. This involves conducting regular risk assessments, leveraging cutting-edge technologies, and staying abreast of evolving criminal tactics in money laundering (ML) and countering the financing of terrorism (CFT).
In conclusion, the study underscores the significant challenges faced by financial institutions in Singapore and globally in combating financial crimes and meeting regulatory obligations. To navigate this complex landscape successfully, financial institutions such as CYS Global Remit must prioritize proactive measures and technological innovations to enhance their defences and safeguard against emerging threats.