Singapore’s financial regulator has asked private banks to shorten the time it takes for clients to open accounts, as the authorities try to support the city-state’s role in global wealth management after major money-laundering cases contributed to long delays.
The Monetary Authority of Singapore said lenders should bring account opening times down to within one month by the end of this year, compared with a current average of six weeks or longer.
The regulator said this could be done by improving the efficiency of checks on sources of wealth.
“More efficient account opening will improve the competitiveness of the wealth management industry while maintaining high standards,” said MAS managing director Chia Der Jiun at a UBS event.
Singapore’s financial industry was shaken three years ago by a S$3bn ($2bn) money-laundering case involving more than 10 people linked to a crime syndicate from southern China.
Last year, police confiscated assets allegedly connected to a scam operation in Cambodia.
After the Chinese case, MAS imposed fines on several banks and wealth managers over what it described as “poor and inconsistent implementation” of controls when onboarding new clients.
Banks then increased scrutiny of clients’ sources of wealth, which resulted in notable delays in account openings and created an 18-month backlog for family office approvals.
Those extra checks have reduced Singapore’s advantage in drawing overseas wealth, with rivals including Hong Kong, Dubai and Abu Dhabi benefiting, reported Financial Times.
In a letter sent on Monday to chief executives of financial institutions, MAS set out ways private banks could simplify their onboarding procedures.
The suggestions included limiting source-of-wealth checks to higher-risk areas instead of applying them to all assets.
MAS also said banks should direct due diligence towards clients presenting the greatest risk and avoid unnecessary requests for extra information.
“MAS would like to emphasise the importance of effective and efficient source of wealth establishment processes, which are risk-proportionate, so that Singapore’s [anti-money laundering] regime does not create undue burden on legitimate businesses and investors,” the regulator wrote.
