The recent money laundering case in Singapore has made financial institutions more aware of risk.
Singapore’s financial institutions see a greater risk from money laundering and terrorism financing (ML/TF) against the country’s financial system. The ML/TF risk is now ranked fourth, after micro-financial, geopolitical as well as technology and cyber risk.
According to the Monetary Authority of Singapore's (MAS) financial stability review published on Monday, ML/TF risk would continue to be a major challenge for Singapore, given its open capital accounts and large gross capital flows.
Concerns About AI
Thus, «it is important for MAS to continue working closely with the industry to identify and disrupt illicit activities, in order to maintain a trusted and thriving financial system in Singapore,» the report said.
Aside from ML/TF, respondents also shared their concerns about the growing use of AI by financial institutions. The usage of AI is said to introduce biases in decision-making as well as expose to technology and cyber risks through third-party service providers.
Sharp Asset Revaluations
Meanwhile, climate change was also a notable risk for the financial industry, such as the 2023 Niño effect. The potential for sharp asset revaluations and stranded assets in the event of a compressed and disorderly transition to net zero.
