Singapore is one of the world’s major financial hubs, ranking on par with Hong Kong and Shanghai as the Asia-Pacific region leaders. It attracts significant capital investment due to its political and economic stability, diverse population and pro-business attitude, which emphasizes global trade. Doing business in Singapore is helped by its transparent and robust legal system, including Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements.
Singapore MAS KYC requirements
The regulatory guidelines for KYC are under the Monetary Authority of Singapore (MAS). Digital verification is acceptable, but appropriate measures, including one of the following, are necessary:
- Independently verified telephone number
- Confirmation of address
- Telephone confirmation of employment status (with consent)
- Proof of salary details (recent bank statement)
- Certification of ID documents by lawyers or notary public
- Initial deposit using a cheque with a bank in Singapore
- Other reliable verification checks
Verification does not need to happen before opening an account as long as there are “internal policies, procedures and controls that set appropriate limits on the financial services available to the customer before completing the verification of the identity of the customer.”
Fortunately, Singapore has a robust digital ID system that uses mobile apps and biometrics to enable speedy and compliant remote onboarding. Under the National Digital Identity (NDI) program, Myinfo is a service that provides verified personal and corporate data and is “a reliable and independent source for the purposes of verifying the customer’s name, unique identification number, date of birth, nationality and residential address.”
Citizens can use the Singpass app to sign up for the government and private sector services. Singpass, which connects to Myinfo, also allows for the remote signing of documents.
Beyond identification, typical KYC considerations such as due diligence and ongoing monitoring are required. If a customer is a Politically Exposed Person (PEP) or poses a greater risk of money laundering or terrorist financing, additional due diligence measures are necessary. Further due diligence is essential if:
- Transaction activities change significantly
- The institution changes its documentation standards
- There’s a material change in relations with the customer
- There’s a lack of adequate identification information
There are also additional requirements for verifying businesses and their beneficial owners. Any director, partner or person with executive authority needs their identity information verified. Digital identity can also assist in this process using Myinfo Business, as forms can be filled automatically with ownership information data from government sources.
Further due diligence is required if the institution becomes aware of a change in the ownership or the person(s) authorized to act on behalf of the customer.
Singapore Payment Services Act
Licensing and regulation are under the Singapore Payment Services Act (PSA) for payment service providers. Some of the types of organizations covered by the Act include:
- Domestic money transfer services
- Cross-border money transfer services
- Account issuance services
- Merchant acquisition services
- E‑money issuance services
- Digital payment token services
Some of the most significant effects of the PSA have been on regulations for Virtual Asset Service Providers (VASPs). Any entity whose business deals with buying and selling digital tokens, provides an exchange for tokens, provides custodial services for tokens, or promotes or advertises these services might fall under the PSA.
Payment service providers need to take a risk-based approach to combat money laundering and other financial crimes. Similar to the above KYC requirements, all customers need identity verification. Simple Customer Due Diligence is acceptable for certain low-risk accounts, but Enhanced Due Diligence is necessary if the risk profile suggests a possibility of criminal risk. Watchlist screening, transaction monitoring and effective recording and reporting of suspicious transactions are all part of the PSA.
Payment companies also should consider the Singapore Financial Services and Markets Bill (FSM Bill), which passed Parliament on April 5, 2022. Alvin Tan, a board member of the MAS, stated, “We could be exposed to reputational risks brought by digital token service providers created in Singapore, and which provide services relating to virtual assets such as Bitcoin outside Singapore. The FSM Bill seeks to mitigate such risks by licensing these players and imposing AML/CFT requirements on them.”
Fintech in Singapore
While Singapore’s population is only 5.9 million, according to the Singapore Fintech Report 2022, it’s home to 132 banks. It has a rapidly growing fintech sector, as investments rose 37% in 2021, and total amount invested in fintech that year outpaced China and India.
Singapore is an excellent launching point for companies looking to expand their presence in the Asia-Pacific region. It has strong financial markets, close working relationships with countries in the region, and is a leader in adopting new financial technologies such as crypto.
If you are considering expanding into Singapore or the region, Trulioo can help. With Trulioo GlobalGateway, you can instantly verify identities and businesses in Singapore and surrounding ASEAN countries, including Brunei, Cambodia, Timor-Leste, Laos, Malaysia, Myanmar (Burma), Philippines, Vietnam, Indonesia and Thailand. Contact your account manager for details or, if you’re not an existing Trulioo customer, please get in touch with one of our Identity Specialists for a demo.