MAS Notice 634 Banking Secrecy – Conditions for Outsourcing

The purpose of this notice is to provide guidelines for banks when outsourcing any operational function to a service provider, particularly when the outsourced function will be performed by the service provider outside Singapore and involves the disclosure of customer information. Banks in Singapore that rely on the exception provided in paragraph 3 of Part II of the Third Schedule of the Banking Act are required to comply with the conditions set out in the Appendix to this Notice.

“In all outsourcing arrangements involving the disclosure of customer information to the service provider, banks shall ensure that the confidentiality of customer information is protected. In selecting a service provider, except when the service provider is the Head Office or the parent bank, banks are to take appropriate due diligence measures, including the assessment of the track record, reputation, financial soundness of the service provider and its ability to safeguard the confidentiality of information entrusted to it.”