MALAYSIA’S DISGRACE SPREADS: SCARRED BY NAJIB & JHO LOW’S 1MDB SHENANIGANS, S’PORE BANKERS ARM THEMSELVES WITH NEW ANTI-MONEY LAUNDERING SKILLS

SINGAPORE – The Wealth Management Institute, which helps train private bankers, has launched an anti-money laundering programme.

Since the WMI was started in 2003, anti-money laundering has been part of the institute’s curriculum, which offers short-term courses to full-fledged postgraduate degree programmes.

The WMI Anti-Money Laundering Risk Management Program, sponsored by leading private bank UBS, is the first time the perils of illicit money flows is getting this kind of attention by the institute.

“We are going deep, and going broad,” says Foo Mee Har, WMI’s CEO.

Besides the shared experience of the wealth management industry, the institute is tapping into a panel of industry practitioners so that their pooled expertise can be disseminated via WMI back into the industry.

For now, the industry experts include Jonathan Shih, head of compliance and operational risk control and UBS; David James, Her Majesty’s Revenue and Customs’ fiscal crime liaison officer; Ian Wong, deputy director of the Commercial Affairs Department, Jon Page, head of business consulting, Asia Pacific at BAE Systems Applied Intelligence; and Larry Lam, managing director at McGuire Asia and Lem Chin Kok, head of forensic at KPMG Singapore.

The launch of this programme follows last year’s unprecedented regulatory actions taken by the Monetary Authority of Singapore to shut down branches of two private banks, BSI and Falcon, for their roles in shuffling money on behalf of their client Low Taek Jho.

Better known as Jho Low, he is said to be a key person shuffling money on behalf of 1 Malaysia Development Bhd.

“This is a nation-wide effort,” says Foo, when asked if the launch of this programme is in response to the 1MDB fund flows that has thus far led to the conviction of four private bankers last year.

She points out that with 1,500 financial institutions operating here, “Singapore is definitely vulnerable to cross border financial crimes.”

Teo Lay Sie, UBS’ group operating officer Singapore, observes that money laundering is a growing problem for the global financial industry. Some studies estimate that the money laundered is equivalent to between 2 to 5% of global GDP. “Singapore is no different,” she says.

The WMI trains mostly relationship managers and they, being the key point of contact with clients, are now seen as a first line of defence against money laundering. They are then backed by their colleagues in compliance, followed by audit and last but not least, industry partnerships formed by the various players and stakeholders.

Industry experts who spoke at the programme’s launch on May 15 observe that while the problem is widespread, there are moves in the right direction that are taking place.

For example, Shih of UBS sees more and more jurisdictions banding up to combat illegal fund flows by agreeing to common standards. This will have the effect of minimising criminals’ chances of exploiting “arbitrage” opportunities.

Other reasons for the growing complexity include new technologies. For example, social media messaging and crowd funding platforms have emerged as growing ways to transfer funds, says Jason Tan, director of forensics at KPMG.

While the challenges have become more complex, banks, at the very least, are more aware of what needs to be done and are doing so as a result.

Tan recalls how when he was starting out in this field back in 2010, senior private bankers he talked to would baulk at the information they needed to ask their clients as part of the “know-your-customer process”.

“If I were to ask for so much information from my customers, they will just walk down the street to the other bank,” Tan recalls them saying. “This has changed,” he adds.

– http://www.theedgemarkets.com

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