The Monetary Authority of Singapore (MAS) recently published a report on its thematic inspections of enterprise-wide risk assessment on money-laundering and terrorism financing (EWRA) in 2020. The EWRA assesses a financial institution’s (FI) inherent ML/TF risks and the effectiveness of its risk mitigation measures. The MAS’ report highlights its observations and expectations of effective EWRA frameworks. Some of these highlights are presented below.
In its inspections, the MAS found that some banks pursued good banking practices like the use of effective quantitative analysis tools to identify ML/TF risks. Some other banks still need to work on strengthening the management oversight and implementation of EWRA. The MAS believes the inspected banks still have room to improve their assessment of the effectiveness of their risk management controls. In general, banks must have systematic procedures to execute the relevant controls to mitigate the risks identified in the EWRA. Banks must also be able to identify the gaps in their system compared to MAS’ expectations of them.
The inspected banks have already taken or are taking significant remedial measures to improve their compliance with MAS guidelines. Even though MAS’ report focuses on banks, the desired outcomes and good practices are applicable to other types of FIs.