The setup cost of the KYC utility exceeds the savings banks would be able to achieve, MAS managing director Ravi Menon told Bloomberg.
MAS (the Monetary Authority of Singapore) has shelved its plan to develop a KYC (know your customer) utility by the end of this year, as costs have exceeded expectations.
The utility was supposed to make it faster and cheaper for banks to onboard new customers and open accounts by enabling a more efficient way of checking against sanctions and blacklists.
But, according to Bloomberg, MAS managing director Ravi Menon has said the setup cost of the KYC utility exceeds the savings banks would be able to achieve. The setup costs were meant to be shared between MAS and participating local and international banks
“Now we are in the process of reviewing [after shelving an arrangement with Refinitiv] — so what is it about the architecture that it is so costly, that it overwhelms the savings?” said Menon. “This project is not dead. It is in coma. We will learn from the experience, rewire the architecture, and do our best to get it up and going again.”
Currently, it can cost several hundred Singapore dollars to conduct due diligence on each individual corporate client (compared to SGD 70-100 for individuals), as banks need to go through as many as 90 data fields to ensure they are not on any blacklists, they have legitimate sources of income, and they identify ultimate beneficial owners.
Menon said a related KYC project for local banks has been successful, referring to OCBC Bank’s use of the government database MyInfo in addition to its own verification process to open new accounts for Singaporeans and permanent residents more quickly.