NOVEMBERASIA BUSINESS OUTLOOK8NEWSROOMMNCS TO RELOCATE PRODUCTION FACILITIES TO FRIENDLIER NATIONS: ECBMAS EXPLORING AI OPTIONS TO COUNTER MONEY LAUNDERINGAccording to Ravi Menon, the managing director of the Monetary Authority of Singapore (MAS), they are highly enthusiastic about investigating the potential applications of artificial intelligence in combating money laundering. Mr. Menon sat down for an extensive interview with CNA prior to the much-awaited Singapore FinTech Festival, which will prominently feature the emergence of AI. The Singapore Expo will be hosting the event from November 15 to 17.AI has the capability to connect data points in expansive datasets that surpass the capacity of the human brain. On the other hand, MAS already incorporates machine learning and advanced data analytics to identify instances of fraud and other dubious activities.Artificial Intelligence (AI) is deployed for processing vast amounts of data and information. It effectively analyzes reports from financial institutions and news articles to identify significant developments that require supervisory attention. But the recent billion-dollar money laundering crackdown in Singapore highlighted the need for more to be done to strengthen "big-picture surveillance", said Mr Menon who is retiring in January."Money launderers operate across different financial institutions, and you need to be able to join the dots across them."Mr Menon noted that AI can, for example, be applied to COSMIC ­ an upcoming digital platform for financial institutions to share information on suspicious customers or transactions.Currently, financial institutions are unable to warn one another about unusual activity involving customers given confidentiality obligations. COSMIC ­ or Collaborative Sharing of Money Laundering/Terrorism Financing Information and Cases ­ aims to eliminate these information gaps when it is rolled out in the second half of 2024. According to a paper released on November 6, over 40% of multinational companies surveyed by the European Central Bank anticipate moving their production to countries that display political amicability in the upcoming years. The primary concern mentioned is the risk associated with China. There has been a growing conversation among firms about shifting production sites due to the upheaval caused by the pandemic and Russia's war in Ukraine, which has disrupted value chains. However, there is a lack of concrete evidence to support the notion of widespread relocations.In the quest for concrete validation, the ECB conducted a survey among 65 prominent multinational corporations. Surprisingly, almost half of them (49%) expressed their intention to "near-shore" their operations, relocating production closer to the proximity of their sales points. A total of 42 percent expressed a desire to "friend-shore" certain operations or relocate them to friendlier locations."As to those countries which posed ­ or could pose ­ a risk to supply chains in their sector more generally, two-thirds of all respondents cited China," the ECB said in an Economic Bulletin article.More than half of the firms sourced critical materials from a specific country or a small number of countries, and nearly all said that these supplies now faced elevated risk."A large majority of these identified China as that country, or one of those countries, with all of them considering this an elevated risk," the ECB added.In recent years, near-shoring has become increasingly popular. However, a new phenomenon called friend-shoring has emerged, with only 11 percent of people stating that they have been adopting this strategy in the last five years. The European Union is anticipated to suffer from corporate movements as more companies are expected to relocate their production outside of the bloc rather than moving it in. This imbalance in movements could have a substantial effect on employment within the EU. NOVEMBERASIA BUSINESS OUTLOOK8
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