Association of Banks in Singapore Financial Crime Seminar 2024 – Keynote Address by Ms Sun Xueling, Minister of State, Ministry of Home Affairs & Ministry of Social and Family Development

1. Chairman and Council Members of the Association of Banks in Singapore, Members and Friends of the Banking Fraternity, Mrs Ong Ai Boon,

Introduction

2. Thank you so much for your warm and kind opening remarks. Just now when I was listening to you share about your very illustrious involvement in the banking sector, I was motivated to share a little snippet about myself. When I left banking in 2013, little did I know that, from then onwards, digital banking would take off the way it did.

3. The involvement of AI in the banking and investment industry, and unfortunately, with that, the onslaught of financial crime, online scams, and of course, more sophisticated ways of money laundering. I’m not sure if it was because of my background in the financial industry that I found myself as the first appointee to the Inter-Ministerial Committee to fight scams. Back then, scams were much less prevalent. Since then, scam numbers have escalated And as we now know, we are looking at, in the last five years, a total of 127,420 scam cases were reported. More than S$2.3 billion has been lost. Last year, on average, every single day, we are losing nearly S$2 million to scammers. These are hard-earned Singaporeans’ and fellow residents’ monies. One of the things I realised being the Chairperson of the Inter-ministerial Committee to fight scams is that scam victims from all over Singapore write to me about their personal encounters in scams, and it’s all very heart wrenching.

4. Now, coming back to today’s Financial Crime Seminar, this is the 20th edition of the Seminar which is held annually. To commemorate this milestone, I know that our organisers have broadened the event beyond banks, to include payment, real estate, and cryptocurrency firms. Just as Mrs Ong did earlier, I’d like to also welcome delegates from the Financial Action Task Force (FATF) who are with us this morning.

Landscape of Financial Crimes

5. As I mentioned earlier, financial crimes, including scams and money laundering, are becoming more transnational and complex.

(a) As we all know, criminals are using increasingly sophisticated layering tactics to conceal the movement of their illicit proceeds.

(b) The advancement of digital technologies also means that large financial flows, both legitimate and illicit, can happen across borders within seconds.

(c) This makes it very difficult for us to track these illicit financial flows, which become almost indistinguishable from legitimate fund flows. And this is a challenge that global law enforcement agencies are working on.

Singapore’s Stance on Financial Crimes

6. As an international financial hub, Singapore’s economic openness, and the diverse and deep range of services make us attractive to investors.

7. But, the same traits make us attractive to criminals, so we are determined to achieve the dual objectives of keeping our financial system clean while remaining welcoming to legitimate businesses.

8. Last year, we conducted one of the largest anti-money laundering operations in the world.

(a) More than S$3 billion worth of assets have been seized or issued with prohibition of disposal orders.

(b) Now, we know that ten persons were convicted for offences including laundering proceeds from overseas criminal activities, and we also know that investigations are still ongoing against 17 other persons who are not in Singapore.

(c) This case was the result of extensive intelligence probes, and painstaking piecing of disparate pieces of information, in close collaboration with local and foreign counterparts.

9. We have since set up an Inter-Ministerial Committee on Anti-Money Laundering in October last year. I, myself, am a member of this IMC, and we will be presenting our full findings and recommendations in the fourth quarter of this year.

Up-to-Date Understanding of Risks

10. To maintain the effectiveness of our AML regime, we need to have a comprehensive and up-to-date understanding of our money laundering risks.

11. Singapore has thus launched our updated Money Laundering National Risk Assessment (or ML NRA) on 20 June 2024, which synthesises the money laundering risks observed by the Singapore supervisory and law enforcement agencies, and Singapore’s Financial Intelligence Unit – the Suspicious Transaction Reporting Office (or STRO). We also take into account feedback from private sector entities and counterpart foreign authorities. The key ML threats that we have identified are cyber-enabled fraud, organised crime, corruption, tax crimes, and trade-based money laundering.

12. We also continue to pay close attention to terrorism financing.

(a) Today, we are publishing our refreshed 2024 Terrorism Financing National Risk Assessment (TF NRA), four years after it was first published in 2020.

(b) The refreshed TF NRA incorporates key developments over the past few years, including the rapid growth of the digital economy and financial services and the expansion of social media; and also factors in key developments in the Middle East, including spillovers from the Israel-Hamas conflict.

(c) We have identified two key sources of terrorism financing, namely terrorist groups such as the Islamic State of Iraq and Syria (ISIS), Al-Qaeda, and Jemaah Islamiyah; as well as radicalised individuals who are sympathetic towards the cause of these terrorist groups.

(d) To respond to the latest terrorism financing threats, we have also updated our National Strategy for Countering the Financing of Terrorism (NSCFT).

(e) I understand that there will be a sharing on the refreshed TF NRA and NSCFT at the Seminar later this morning.

Whole-of-Ecosystem Approach to Tackle Financial Crimes

13. Finally, I would like to talk about our whole-of-ecosystem approach to tackling financial crimes. This was touched upon by Mrs Ong earlier as well.

14. First and foremost, we have to strengthen public-private partnerships.

15. Over the years, we have made good progress on this front.

(a) An example is the AML/CFT Industry Partnership (ACIP). The ACIP, co-led by the Monetary Authority of Singapore (MAS) and the Commercial Affairs Department of the Singapore Police Force, promotes collaboration between the Government and participating banks in identifying, assessing, and mitigating key money laundering and terrorism financing risks.

16. We also now have staff from major local banks, and online platforms such as Carousell and Shopee, co-located at the Police’s Anti-Scam Command, which facilitates information sharing, fund tracing, and the freezing of bank accounts. I would like to take the opportunity to thank our banks for stepping up so readily to co-locate with the Police at the Anti-Scam Command.

17. Financial institutions and designated non-financial businesses and professions (or DNFBPs) are key stakeholders in the fight against financial crimes. So we have to empower our industry stakeholders.

18. Today, our main source of financial intelligence is through suspicious transaction reports, cash movement reports, and cash transaction reports filed by the business and financial community.

(a) Our financial institutions and the DNFBPs are thus our first line of defence in detecting criminal and suspicious activities.

(b) It is important that our first line defenders continue to conduct rigorous Know Your Customer processes, perform Customer Due Diligence checks on transactions, and surface any suspicious activities to the authorities in a timely manner.

(c) Over the next couple of months, our Government agencies will be engaging and informing their regulated entities on the latest AML requirements so that they are well-equipped to perform their roles as gatekeepers. I hope you don’t see this as a one-directional effort from the Government because whatever we do, at the end of the day, the ‘devil is in the details’ – it depends on how neatly we can execute it on the ground and the bottlenecks that we face; Government agencies on the backend will also need to know how to integrate this information properly because otherwise it is hard for us also to do sensemaking with the information that we have.

19. So, to facilitate information sharing between financial institutions, the MAS has worked with the banks to co-develop and launch COSMIC, which stands for Collaborative Sharing of Money Laundering/Terrorism Financing Information and Cases – something which I believe you are familiar with, and there will be an in-depth sharing on COSMIC later in the Seminar.

20. Finally, I would like to touch upon enhancing public vigilance.

21. This is something that we all have to do together. The banks have launched the “Money Lock” feature. I understand that we are trying to get even more foreign banks to come onboard this initiative. Awareness and signups for “Money Lock” are still not at a level where it ought to be, so I hope that we can also work collaboratively to see how we can increase awareness and encourage more of the public to sign up for “Money Lock”.

22. While these initiatives have helped to better protect the community, we know that the criminals will constantly evolve their modus operandi to get around our measures. So I think it is quite apt that we now have Antihero for a mascot, because an antihero means that it is a flawed character in the first place, and I think it also reminds each and everyone of us that we don’t only have to think like law abiding citizens, we also have to sometimes think like criminals so that we can rewire ourselves to start thinking about how scammers may pick up issues, how they rehearse these elaborate scams, so that we can stay one step ahead of their game. It could be technological as well as frontline defences to better protect our fellow citizens against scams and online crimes.

(a) We will need to keep up our public education efforts and mobilise Singaporeans to take actions to protect ourselves against scams and financial crimes.

Conclusion

23. With that, I hope we can work collaboratively together to deal with evolving challenges and keep Singapore’s financial sector safe and secure.

24. Thank you very much.