Accounts Payable Roles: Keeping AP Running Through Hiring Freezes 

Outsourcing is now an important way for banks, fintechs, and other financial institutions to run their businesses more efficiently, get access to specialized knowledge, and quickly respond to changes in the market. But with these benefits comes the responsibility to manage the risks of giving important tasks to other parties. The Monetary Authority of Singapore (MAS) has made detailed rules for how banks, fintechs, and other financial institutions should handle outsourcing arrangements because of this. The goal of the MAS guidelines is to ensure that outsourcing does not compromise an institution’s operational integrity, risk management, or legal compliance 

Banks and fintechs that do business in Singapore must understand and follow these rules. They are necessary to maintain trust, stability, and resilience. 

Understanding MAS Outsourcing Guidelines 

The MAS guidelines provide a structured framework covering several key aspects of outsourcing: 

• Governance and Oversight: Financial institutions, including fintechs, must implement a clear governance framework, defining roles, responsibilities, and escalation pathways. Senior management oversight ensures that outsourcing decisions are made thoughtfully and accountability is maintained. 

• Risk Assessment and Due Diligence: Before entering an outsourcing arrangement, institutions are expected to conduct detailed assessments of potential risks, evaluating the service provider’s capabilities, reliability, and financial stability. 

• Contractual Clarity: Outsourcing agreements should specify service levels, performance expectations, reporting requirements, and remedies in case of non-compliance. Clear contracts protect both parties and ensure transparency. 

• Monitoring and Review: Continuous oversight of outsourced activities is necessary to confirm that providers meet obligations and that any deviations are addressed promptly. 

• Exit Strategies: Institutions are required to have a structured plan for disengaging from service providers if needed. This ensures continuity of operations and minimizes disruption during transitions. 

• Recent Updates for Payment Service Providers: MAS has also revised guidelines under the Payment Services Act (PSA) for fintechs and payment service providers, requiring legal opinions on business models and independent assessments by qualified external auditors for digital payment token (DPT) services. 

These updates reflect MAS’s broader commitment to regulatory clarity and operational resilience across financial institutions and fintech outsourcing. 

Challenges in Outsourcing 

While outsourcing offers flexibility and scalability, it also presents several challenges for financial institutions and fintech organizations: 

Regulatory Compliance:

Outsourcing arrangements must comply with MAS regulations and other pertinent rules, especially in cross-border contexts, through diligent planning and oversight. 

Operational Risks:

If a third-party supplier’s services are interrupted, data is lost, or processes are disrupted, it can directly affect the operations and reputation of an institution or fintech. 

Dependence on Providers:

Relying too heavily on one provider can be risky if that provider experiences financial or operational difficulties. 

Data Security:

Sharing sensitive information with third parties involves careful security measures against breaches or unauthorized use. 

Connext’s Compliant Outsourcing Approach 

Connext Global aligns its outsourcing options with MAS guidelines to help financial institutions and fintechs address challenges efficiently: 

Regulatory Alignment:

Connext ensures that its services follow MAS rules, providing institutions and fintechs with peace of mind when outsourcing where needed. 

Risk Mitigation:

Connext helps institutions lower operational and compliance risks using due diligence, ongoing monitoring, and best practices. 

Flexible Team Expansion:

Our outsourcing model lets clients scale teams without increasing headcount, supporting hiring freezes and dynamic staffing needs in fintechs and financial institutions. 

Clear Agreements:

Connext’s contracts make it easy for organizations to track obligations by clearly defining duties, expected performance, and reporting structures. 

Outsourcing in finance and fintech can bring operational efficiency, access to specialized expertise, and flexibility to increase teams. However, these benefits need to be balanced with prudent risk management and compliance with MAS guidelines. The MAS framework provides clear direction for institutions to structure outsourcing arrangements that maintain operational stability and regulatory compliance. 

Through collaboration with providers such as Connext, fintechs and financial institutions can establish MAS-compliant, well-governed outsourcing arrangements that meet workforce needs and requirements. MAS guidelines remain essential for financially resilient and future-proofed operations. 

Learn how staff augmentation can help fintechs and financial institutions scale teams effectively and stay compliant with MAS guidelines in our Staff Augmentation in 2025: Solving Workforce Challenges with Independent Contractors blog. 

Discover the strategic benefits of outsourcing financial planning and analysis to enhance decision-making and regulatory compliance in our FP&A Outsourcing for Business Owners blog. 

Explore how to scale your accounts receivable team without increasing headcount by leveraging independent contractors, ensuring operational continuity during hiring freezes.  

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