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Banking Compliances In Singapore

Banking Institutions in Singapore: An Overview of Regulations, Regulatory Challenges and Compliance

What are the Institutions that come under Banking Laws and Regulations in Singapore?

Institutions carrying out all of the following banking activities come under banking laws and regulations and are subject to regulatory requirements of banking compliances in Singapore.

Do Banking Laws and Regulations Apply to Fintech Companies?

Fintech companies carrying out banking business in Singapore would be treated as traditional banks and the same banking laws and regulations will apply.

What are the Banking Regulations in Singapore?

The Monetary Authority of Singapore (“MAS”) is the sole regulator in Singapore having regulatory oversight of the banking institutions. The MAS is also the central bank of Singapore.

The Banking regulation in Singapore  including the subsidiary regulations govern the banking institutions and are acts passed by the Parliament and are mandatory. Besides regulating the banking sector in Singapore, these regulations also focus on establishing a legal banking framework that can keep pace with the latest developments in the global banking sector. The main regulations applicable to the banking institutions are as follows.

Several subsidiary legislations has been enforced under the Banking Act, Securities and Futures Act and Financial Advisers Act.

The resolution regime comprising emergency liquidity infusion, recovery and resolution planning etc. applicable to the banks in Singapore are also set out in the Banking Act as well as the MAS Act.

Other applicable regula­tory instruments issued by MAS including directives, notices, guidelines, codes, practice notes and circulars also apply to the Banking institutions in Singapore.

What are the main regulatory challenges for the banking institutions in Singapore?

As banks keep increasing their focus on digitizing their businesses, they continue to face increased regulatory and compliance-related challenges while striving for keeping pace with the unprecedented transformation across the banking industry.

The three main challenges being faced by the banking institutions are

How does Singapore Address the Anti-Commingling Policy Framework to ease Regulatory Challenges?

MAS introduced a policy to separate the financial and non-financial businesses of banks in Singapore in 2001, called the anti-commingling policy to encourage banks to stay focused on their core banking business and competencies, and avoid non-financial businesses. MAS has recently announced plans to provide relaxation in certain aspects of the anti-commingling policy framework for banks as part of the next round of amendments to the Banking Regulations, allowing banks to widen their range of services and compete effectively against non-financial players delivering financial services amidst a rise in shadow banking.

Does Consumer Protection Act Apply to the Banking Institutions in Singapore?

Singapore banking institutions providing common financial products and services including bank deposits, loans, unit trusts and securities must ensure that there is no breach of the provisions for fair trading under the Consumer Protection/Fair Trading Act (CPFTA) due to their sales practices. Any such breach will give consumers the right to initiate civil action against a supplier of such products and services, under the CPFTA.

How does Technology Aid in Regulatory Compliance of the Banks?

A banking regulatory compliance software  facilitates how banking institutions can easily comply with the regulations and manage them more efficiently. It allows banks to use a framework that helps them ensure banking compliances in Singapore  by always staying up to date with regulatory requirements digitally.

As cyber-attacks are rising with increased complexity, artificial intelligence (AI) comes as a saviour for the banks to keep these institutions stay ahead of threats and guarantee consumer protection with real-time insights into financial crimes and regulatory amendments by securing data in a multi-cloud environment.

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