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In April 2025, the Monetary Authority of Singapore (MAS) released a consultation paper proposing significant amendments to its Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Notices and Guidelines. These changes, set to take effect on June 30, 2025, aim to enhance the effectiveness of Singapore's AML/CFT framework and align it with evolving international standards.
The proposed amendments will impact a broad spectrum of financial institutions (FIs) and variable capital companies (VCCs), including banks, payment service providers, insurers, capital markets intermediaries, trust companies, and digital token service providers. The key changes include:
1. Inclusion of proliferation financing (PF) in money laundering risk assessments
MAS proposes to explicitly include proliferation financing (PF) risks within the scope of money laundering (ML) risk assessments. Proliferation financing is the raising, moving, or making available of funds or assets for the proliferation of weapons of mass destruction.
While most financial institutions may already consider PF risks under broader sanctions compliance, this explicit inclusion mandates that PF be ‘assessed, understood, and mitigated’ as part of an institution’s regular ML/TF risk assessments.
This aligns with the Financial Action Task Force's (FATF) revised standards, raising the expectation for institutions to treat PF as a core risk vector requiring enterprise-wide attention. Institutions need to adapt risk-based approaches to screening individuals or transactions with higher-risk of being associated with proliferation financing.
2. Enhanced requirements for trust companies
Amendments to MAS Notice TCA-N03 will broaden the definition of "trust relevant parties" to encompass
- Protectors (appointed to oversee the actions of the trustee, often with powers to approve, veto, or direct certain trustee decisions),
- classes of beneficiaries and objects of power who are potential recipients of trust assets through discretionary powers, and
- individuals with powers to manage or distribute trust assets.
Trust companies will be required to collect comprehensive information on these parties, including identification details and the purpose of the legal arrangement, strengthening MAS’s stance on ultimate beneficial ownership (UBO). This encompasses financial institutions having a clear understanding of the individuals that ultimately own or control a legal entity preventing the misuse of corporate structures for the benefit of money laundering.
3. Clarified timelines for suspicious transaction reports (STRs)
MAS is updating its timeline guidelines to improve clarity. This means that once there is a clear red flag or alert of suspicious activity, an STR must be filed:
- Within 5 business days after suspicion is established.
- Within 1 business day for cases involving sanctioned parties or those acting on their behalf.
MAS has also removed the need for copies of STRs to be submitted directly to MAS unless requested which reduces duplication and operational burden while maintaining supervisory transparency through on-request access.
Napier AI encourages MAS to clarify what constitutes ‘exceptional or extraordinary circumstances’ for exceeding the 5-day limit and to offer additional guidance on escalation procedures for delayed high-risk reviews, including providing examples to clarify how to determine the point when suspicion is ‘first established’.
4. Strengthened screening and source of wealth/funds verification
The guidelines will be updated to emphasise the importance of screening using relevant search engines – such as conducting open-source background checks – and conducting searches in the native languages of the individuals involved – such as Chinese, Russian, or Arabic – instead of relying only on English.
Additionally, FIs and VCCs must ensure robust processes are in place to verify the source of wealth and source of funds, including independent corroboration and additional controls for higher-risk customers. This underlines the risk-based approach recommended by global regulators through applying extra scrutiny for higher-risk cases.
What does this mean for financial institutions?
As criminal typologies evolve and regulations tighten, financial institutions must be equipped with compliance solutions that do more than just detect red flags: they must also enable rapid risk identification, intelligent escalation, and continuous due diligence.
AI-powered fuzzy name matching
MAS’s new guidelines emphasise that screening must go beyond generic, English-language databases — institutions are now expected to use search engines and data sources that reflect the customer’s jurisdiction and native language. This is a critical move toward ensuring that risks aren’t missed simply because of transliteration, cultural name variations, or regional aliases/nicknames.
Napier AI Client Screening includes an industry-leading AI fuzzy name matching engine. It offers a linguistic, statistics-based system to compare and match names of people, places, and organisations across 25+ supported languages, including Chinese and Arabic even in complex scenarios involving phonetically similar names, stuck initials, transliterated names, nicknames, and names in foreign scripts. This multilingual matching not only reduces false positives and negatives but also strengthens compliance in cross-border environments enhancing accuracy of matches.
Multi-screening configurations for changing risk appetites
With the MAS requirements to file STRs faster, continuously assess risk — including proliferation financing — and adapt screening based on changing customer profiles, a one-size-fits-all approach to screening is no longer sufficient. Identifying UBOs, especially within complex trust and legal arrangements requires tailored rule configurations in screening.
Multi-screening configurations allow compliance teams to tailor screening rules, thresholds, and data inputs across different business units, jurisdictions, or customer types.
Compliance leaders can monitor key screening activity at a glance. Dashboards provide insights into multiple-screening configurations, hit volumes, customer risk profiles, and team workflows making it easier to identify emerging issues like investigation backlogs or workload imbalances before they impact reporting timelines. By consolidating customer and intelligence data into a single dashboard, the solution removes friction in the review process. This is crucial when investigating multiple alerts or conducting follow-up assessments where supplementary STRs may be warranted.
The forthcoming amendments to MAS's AML/CFT framework represent a significant shift towards more stringent regulatory expectations. Financial institutions must act swiftly to align their compliance programs with proactive NextGen screening.
Learn more about the best practices in client screening and the do’s and don'ts of alert dismissal as recommended by the Monetary Authority of Singapore.
Photo by Thomas Bormans on Unsplash
