Hiring the right people has always been fundamental to maintaining trust, governance, and operational resilience within financial institutions. As regulatory expectations evolve, regulated employment verification is becoming an increasingly important component of hiring governance, workforce integrity, and operational risk management. In Singapore, organisations are closely monitoring shifts in compliance standards, particularly the proposed Mandatory Reference Checks framework outlined by the Monetary Authority of Singapore (MAS).
While regulatory mandates shift over time, the underlying principle remains constant: robust vetting processes protect both individual organisations and the broader market. Implementing a rigorous workforce screening program is no longer just a checkbox exercise; it is an essential component of comprehensive risk management. This article examines the upcoming framework and explores how organisations can elevate their existing hiring governance today.
Important update: current status of the MAS Mandatory Reference Checks framework
The Monetary Authority of Singapore (MAS) has proposed enhancements to Mandatory Reference Checks (MRC) as part of its efforts to strengthen hiring practices within the financial services sector. While MAS published its response to the industry consultation in December 2023, an official Notice bringing the enhanced requirements into effect has not yet been issued.
This article is intended to help financial institutions understand the proposed direction of the framework and consider how existing employment verification and reference checking processes may support future operational readiness. It should not be interpreted as indicating that the enhanced MRC requirements are currently in force.
Suggested timeline
2021: MAS issued its consultation paper proposing enhancements to the Mandatory Reference Checks framework.
December 2023: MAS published its response to the consultation, confirming its policy direction and proposed enhancements.
Current status: As at the date of publication, no official MAS Notice implementing the enhanced Mandatory Reference Checks framework has been released. Financial institutions may nevertheless wish to review their hiring and employment verification processes in preparation for future regulatory developments.
What are MAS Mandatory Reference Checks?
The proposed framework for MAS Mandatory Reference Checks (MRC) represents a concerted effort to formalise and standardise the sharing of employment histories within Singapore’s financial market. At its core, the consultation objectives focus on a specific industry challenge: reducing the movement of individuals with histories of serious misconduct between different organisations. This phenomenon, often described in regulatory circles as the movement of “bad apples,” can introduce systemic risk to unsuspecting employers.
Under the proposed MAS MRC guidelines, financial institutions will face dual obligations. They will be required to look back across a designated timeframe to request standardised references from an applicant’s former employers. Simultaneously, they will have to be prepared to respond to similar inbound requests with accurate, objective data regarding past misconduct, disciplinary actions, and compliance histories.
By mandating this exchange, the framework aims to significantly strengthen hiring governance across the entire financial ecosystem.
Why are Mandatory Reference Checks being introduced?
The driving force behind Mandatory Reference Checks in Singapore is the preservation of trust. Singapore’s position as a premier global financial hub relies heavily on the perceived integrity of its workforce. When a financial institution makes a hiring decision, it conducts fit and proper assessments to establish whether a candidate possesses the character, competence, and financial soundness required for the role.
Standard employment verification typically confirms factual employment information such as dates of employment, job titles and, where available and permissible, other employment-related details. Proposed Mandatory Reference Checks would introduce additional requirements for sharing certain conduct-related information within the scope defined by MAS.
This structural shift can assist organisations in identifying potential issues early, thereby protecting consumer trust, minimising operational liabilities, and strengthening overall industry confidence.
Current status of the MAS proposal
When preparing internal strategies, compliance teams must distinguish between finalised regulations and ongoing legislative developments. The current regulatory status of the framework can be mapped through the following milestones:
- Consultation completed: MAS initially issued a detailed consultation paper proposing mandatory reference check requirements to gather feedback from industry stakeholders.
- Response to feedback published: Following extensive dialogue with banking associations, legal experts, and financial institutions, MAS published its formal Response to Feedback. This document clarified several operational boundaries and altered certain proposed parameters based on industry input.
- Draft notices pending: While the policy direction is settled, the formal draft notices and legislative instruments have not yet been officially implemented.
- Timeline under development: The exact implementation date remains unconfirmed as institutions await the final regulatory text.
Because these requirements are not yet legally mandatory, financial services employers have a valuable window of opportunity. Rather than engaging in regulatory speculation, organisations can use this transitional phase to audit their internal capabilities and establish operational readiness.
Current employment verification practices in financial services
Many leading financial institutions do not need to build their processes from scratch. Instead, they view upcoming regulations as an evolution of their existing background screening for financial institutions. Comprehensive vetting is already standard market practice for risk-aware organisations, serving as a core line of defence in the recruitment lifecycle.
Employment verification is already one of the most requested background screening services within financial services, because it helps organisations validate employment history, identify inconsistencies, and support informed hiring decisions.
Currently, market practices for an employment verification in Singapore typically involve:
- Standard look-back periods: Most financial services firms routinely verify five to seven years of employment history for standard corporate roles.
- Extended verification window: For senior executives, material risk takers, or highly regulated positions, internal policies or regional mandates often require much longer look-back periods.
- Authorised channels: Standard practice relies on verifying information directly through formal channels, such as an organisation’s human resources department, centralised payroll systems, or designated authorised third-party representatives.
Because practices naturally vary based on an institution’s specific risk appetite, internal governance, and existing regulatory obligations, an employment screening programme’s flexibility is critical. The upcoming framework will simply formalise screening efforts into a uniform minimum standard across the sector.
How financial institutions can strengthen hiring governance
Rather than taking a reactive stance, financial institutions can take practical, proactive measures to elevate their screening workflows today. Strengthening hiring governance well ahead of formal regulatory deadlines can assist with smoother operational transitions later.
1. Review existing workflows
Organisations should audit their current employment history verification practices. Identifying discrepancies between your current look-back windows and the proposed MAS expectations can highlight areas that require adjustment, which can be managed via professional workforce screening solutions.
2. Document internal procedures
Clear, audit-ready documentation is vital for compliance. Companies can benefit from reviewing how hiring decisions, reference requests, and reportable screening outcomes are documented and escalated within their HR and legal departments.
3. Establish inbound reference mechanisms
Because the framework requires organisations to both request and provide references, firms must prepare for an influx of outbound requests. Establishing clear criteria for what constitutes reportable misconduct can help support consistent and legally compliant responses.
4. Partner with experienced screening providers
Managing complex regulated checks internally can drain valuable human resource assets. Partnering with an established workforce screening partner supports organisations operating across multiple jurisdictions in maintaining high data standards, mitigating compliance risks, and scaling operations appropriately.
How First Advantage supports regulated employment verification
While MAS Mandatory Reference Checks remain under development, many financial institutions already rely on employment verification as part of their broader workforce screening programmes. First Advantage supports organisations with configurable employment verification solutions designed to align with internal hiring policies, regulatory expectations, and organisational risk frameworks.
Employment verification is conducted through trusted employer sources, including payroll, human resources departments, authorised administrators, or approved third-party designees, depending on local market practices.
As financial institutions evaluate their operational readiness, utilising technology-driven, specialised solutions can support operational consistency. As a global provider of workforce screening and identity solutions, First Advantage delivers highly configurable services to businesses in Singapore that can be tailored to meet an organisation’s precise internal policies and changing regulatory requirements.
For organisations operating across multiple jurisdictions, multilingual employer outreach and jurisdiction-specific verification workflows can help support more consistent employment verification processes.
| Capability | Operational benefit to financial institutions |
|---|---|
| Present & former verification | Supports complete lifecycle mapping by verifying both current and historical data points. |
| Configurable look-back periods | Supports configurable verification periods based on organisational policies, role requirements, and applicable regulations. |
| Multilingual employer outreach | Mitigates delays in international background checks by communicating in local languages across global employer networks. |
| Verified source channels | Confirms employment records directly through verified HR departments, corporate payroll systems, or authorised representatives. |
| Customisable contact options | Offers tailored outreach methodologies to protect candidate privacy and current employment status until the appropriate stage. |
| Cross-border workflows | Supports organisations operating across Singapore, Hong Kong, Malaysia and the United Kingdom through jurisdiction-specific regulated employment verification workflows. |
First Advantage supports regulated employment verification across multiple international markets through configurable employment verification programmes designed to accommodate jurisdiction-specific requirements. This global capability enables multinational financial institutions to apply consistent screening standards while recognising local regulatory differences.
By streamlining employment verification workflows and verifying employment information through trusted employer sources, First Advantage helps organisations reduce manual administration while supporting consistent hiring governance.
Key takeaways
Although the proposed MAS Mandatory Reference Checks framework has not yet been implemented, reviewing employment verification practices today can help financial institutions strengthen hiring governance and prepare for future regulatory developments.
- Framework evolution: The proposed framework for MAS Mandatory Reference Checks is designed to improve transparency and reduce misconduct risks across Singapore’s financial sector.
- Proactive preparation: While final implementation notices are pending, proactive organisations are utilising this period to optimise their screening architectures.
- Industry baselines: Verifying five to seven years of employment history remains a foundational element of robust background screening for financial institutions.
- Scalable governance: Implementing a configurable regulated employment verification framework and keeping up with industry insights via an expert compliance blog can assist financial institutions in maintaining operational readiness in a changing regulatory landscape.
Preparing for evolving regulatory expectations?
Learn how First Advantage’s configurable employment verification solutions can help support regulated hiring, strengthen workforce screening programs, and prepare your organisation for evolving regulatory expectations.
Frequently asked questions
What are MAS Mandatory Reference Checks?
This is a proposed regulatory framework by the Monetary Authority of Singapore. It aims to mandate that financial institutions systematically conduct and respond to employment references to reduce the risk of individuals with serious misconduct histories moving undetected through the financial industry.
How does employment verification differ from a reference check?
Employment verification typically focuses on confirming factual data points such as job titles, dates of tenure, and historical employment records through official organisational channels. A reference check, particularly within a regulated framework like the proposed MAS MRC, involves gathering qualitative or specific conduct-related details regarding an individual’s performance, behaviour, and history of compliance or misconduct.
Have Mandatory Reference Checks been implemented?
The consultation process and the subsequent Response to Feedback have been completed by MAS. However, formal implementation is pending the release of final draft Notices and legislative text.
Which financial institutions may be affected?
The proposed framework targets a broad spectrum of financial institutions operating under MAS jurisdiction, particularly focusing on roles involving significant responsibility, advice, or risk management within the financial ecosystem.
How many years of employment history are typically verified?
Current market standard practices for background screening in financial services generally involve looking back over five to seven years, though specific regulated roles or internal risk policies may require longer verification windows.
How can organisations prepare for future requirements?
Institutions can prepare by auditing their current employment verification workflows, formalising documentation processes, establishing secure methods for responding to inbound reference requests, and evaluating the capabilities of their screening vendors.
What is regulated employment verification?
This refers to a specialised employment verification process tailored specifically to meet the strict background check standards, look-back durations, and specific disclosure criteria mandated by regulatory authorities in industries like financial services.
Sources
- Monetary Authority of Singapore (MAS): Consultation Paper on Proposals to Mandate Reference Checks
- Allen & Gledhill: MAS to Require Financial Institutions to Conduct and Respond to Reference Checks
- A&O Shearman: One Step Closer to a Mandated Reference Checks Regime: MAS Finalises its Proposals
