MAS Notice 626 Transaction Monitoring Requirements: A Compliance Guide for Singapore Banks

For banks in Singapore, MAS Notice 626 remains one of the most important foundations of AML compliance. Issued by the Monetary Authority of Singapore, the Notice sets out clear expectations around customer due diligence, transaction monitoring, suspicious transaction reporting, and record-keeping.

This guide focuses on MAS transaction monitoring obligations under MAS Notice 626 and explains what they mean in practice for compliance teams navigating evolving Singapore AML requirements in 2026.

What Is MAS Notice 626?

MAS Notice 626 applies to banks licensed under Singapore’s Banking Act. It forms a core part of the country’s AML/CFT framework and reflects broader international standards, including the FATF Recommendations. It is also supported by MAS Guidelines on AML/CFT, which help banks interpret the rules in practice.

At a high level, MAS Notice 626 covers four key areas:

• customer due diligence
• ongoing monitoring
• suspicious transaction reporting
• record-keeping

For most compliance teams, the most operationally demanding areas are ongoing monitoring and transaction monitoring.

Why MAS Notice 626 Matters for Singapore Banks

Regulators in Singapore have made it clear that AML controls must be more than procedural. MAS has taken enforcement action against banks where weaknesses in monitoring, customer oversight, or investigation processes created gaps in AML/CFT controls.

That is why MAS AML compliance is not simply about maintaining policies. Banks must be able to show that their controls work in practice, especially when it comes to identifying unusual or suspicious activity. In this context, MAS transaction monitoring is one of the most important operational pillars of a bank’s AML framework.

Ongoing Monitoring Requirements Under MAS Notice 626

Paragraph 11 of MAS Notice 626 requires banks to perform ongoing monitoring of customer relationships. In practice, this includes two connected obligations: monitoring transactions and keeping customer information current.

Transaction Monitoring Under MAS Notice 626

Banks must monitor transactions to ensure they are consistent with what the bank knows about the customer, the customer’s business, and the customer’s risk profile.

In practice, this means banks should be able to:

• understand the customer’s expected transaction behaviour
• detect activity that does not align with that expected pattern
• scrutinise the source and destination of unusual funds
• apply enhanced monitoring to high-risk customers and PEPs

This is central to MAS transaction monitoring. The expectation is not only to detect unusual activity, but to assess it in the context of customer risk, expected behaviour, and potential financial crime exposure.

Keeping Customer Due Diligence Information Up to Date

Ongoing monitoring under MAS Notice 626 is not limited to transaction review. Banks must also ensure that customer due diligence information remains accurate and up to date, particularly for higher-risk customers.

If transaction monitoring reveals a meaningful shift in customer behaviour, that should trigger a CDD review. This is an important part of meeting broader Singapore AML requirements, where customer knowledge and transaction behaviour are expected to remain aligned.

What MAS Expects From Transaction Monitoring Systems

MAS has clarified over time what effective monitoring should look like in practice. Several expectations are particularly relevant for banks strengthening their MAS AML compliance frameworks.

1. A Risk-Based Monitoring Approach

A core principle of MAS Notice 626 is that monitoring should be risk-based. Not all customers present the same level of AML/CFT risk, and transaction monitoring should reflect that.

Higher-risk customers, including PEPs, customers linked to high-risk jurisdictions, and customers with complex ownership structures, should be subject to more intensive monitoring. A one-size-fits-all model is unlikely to meet regulatory expectations under modern Singapore AML requirements.

2. Typology Coverage That Reflects Real Risk

MAS expects banks to monitor for the money laundering typologies most relevant to Singapore’s financial system.

These include risks such as:

• trade-based money laundering
• misuse of shell companies and nominees
• placement through casino-linked activity
• abuse of digital payment channels

This means MAS transaction monitoring systems should reflect the real typologies facing Singapore banks, rather than relying on generic scenario libraries that may not match local risk.

3. Alert Quality Over Alert Volume

MAS has also emphasised that more alerts do not automatically mean better monitoring. A system generating high volumes of low-value alerts can create operational noise rather than real control strength.

Banks should be able to demonstrate that thresholds are producing alerts that are relevant, actionable, and properly investigated. Strong MAS AML compliance depends not just on detection, but on the quality of the monitoring outcomes.

4. Documentation and Audit Trail

All monitoring activity should be documented clearly. That includes how alerts are generated, how they are investigated, what decisions are made, and whether escalation to suspicious transaction reporting is necessary.

MAS examiners are likely to review:

• alert workflows
• investigation records
• disposition decisions
• STR-related documentation

For banks in Singapore, this is a critical part of meeting Singapore AML requirements and showing that the monitoring framework is working as intended.

MAS Notice 626 and Correspondent Banking

Banks with correspondent banking relationships face additional monitoring expectations under MAS Notice 626.

MAS requires enhanced scrutiny of these relationships, including:

• understanding the nature and expected volume of activity
• monitoring for patterns inconsistent with the correspondent’s profile
• applying payable-through account controls where relevant
• periodically reviewing whether the relationship remains appropriate

This reflects the higher risks often associated with cross-border flows and nested financial relationships.

Suspicious Transaction Reporting Under MAS Notice 626

Transaction monitoring is often the first stage in identifying conduct that may require a suspicious transaction report. Under MAS Notice 626, banks are expected to file STRs with the Suspicious Transaction Reporting Office within a reasonable timeframe once suspicion is formed.

Key obligations include:

• file an STR as soon as suspicion arises
• do not wait for a minimum threshold, as none applies
• avoid tipping off the subject of the report
• retain the monitoring alert and investigation records that led to the STR
• ensure the STR contains enough information for STRO to act on it

This is where MAS transaction monitoring connects directly with reporting obligations. A bank’s monitoring system must support not only detection, but also sound investigation and reporting processes.

Tipping Off Risk and MAS AML Compliance

One of the most sensitive legal areas within MAS AML compliance is the prohibition on tipping off. Under Singapore law, tipping off is a criminal offence.

That means transaction monitoring and case management systems must be designed carefully so staff do not inadvertently alert a customer whose account or activity is under review.

MAS Notice 626 in the Context of Singapore AML Requirements

MAS Notice 626 should also be viewed in the wider context of Singapore’s broader AML priorities. Singapore’s National Anti-Money Laundering Strategy, published in 2023, signals how the country is thinking about the future of financial crime prevention.

Several themes are especially relevant.

Digital Payment Monitoring

With PayNow and other digital payment channels widely used in Singapore, monitoring frameworks can no longer focus only on traditional wire transfers. Instant payment flows also need to be covered effectively.

This makes real-time monitoring increasingly important within MAS transaction monitoring programmes.

Data Collaboration and Shared Intelligence

The launch of initiatives such as COSMIC suggests that regulators increasingly expect financial institutions to benefit from intelligence sharing, not just internal monitoring signals.

This points to a more connected model of AML detection, where external intelligence can strengthen how banks respond to evolving risks under Singapore AML requirements.

Technology and Innovation

MAS has consistently encouraged financial institutions to adopt RegTech and advanced analytics where these improve AML effectiveness. AI and machine learning-based systems that identify layered, fast-moving, or complex suspicious patterns are increasingly aligned with supervisory expectations.

How Tookitaki Supports MAS Notice 626 Compliance

Tookitaki’s FinCense platform is designed to support the practical demands of MAS Notice 626, especially in areas tied to MAS transaction monitoring and broader MAS AML compliance.

This includes:

• a federated typology network covering Singapore-relevant risks such as trade-based money laundering and PEP monitoring
• risk-based alert scoring that supports differentiated monitoring by customer risk
• full audit trails across alert investigation workflows
• real-time monitoring for PayNow and other digital payment activity
• support for STRO reporting workflows
• explainable AI outputs that help investigators understand and document alert rationale

For banks looking to modernise their AML stack, these capabilities align closely with current Singapore AML requirements and MAS’s technology-forward direction.

Why Effective MAS Transaction Monitoring Matters

The message from regulators is clear. Banks are expected not only to maintain transaction monitoring controls, but to prove that those controls are risk-based, well-calibrated, and effective in practice.

That means banks should be able to:

• monitor customer behaviour against expected patterns
• detect Singapore-relevant AML typologies
• generate alerts that investigators can act on
• maintain clear investigation and audit records
• connect monitoring outcomes to STR and CDD review workflows

In short, MAS transaction monitoring is one of the clearest tests of whether a bank’s AML programme is truly working.

MAS Notice 626 Transaction Monitoring: Key Takeaways

For banks reviewing their transaction monitoring capabilities, the priorities are clear:

• risk-based monitoring linked to customer risk ratings
• typology coverage that reflects Singapore-specific ML/TF risks
• stronger alert quality supported by documented investigations
• real-time monitoring across digital payment channels
• STR workflows that meet regulatory expectations and reduce tipping off risk
• regular threshold review and calibration
• documentation that supports supervisory review and audit readiness

MAS Notice 626 is not just a regulatory framework to reference. It is a practical benchmark for how banks should approach monitoring, investigation, and reporting.

For compliance teams working under evolving Singapore AML requirements, strong transaction monitoring is both a regulatory necessity and an operational advantage. It is what turns AML compliance from a static control framework into a working system that can detect risk in real time.