Singapore’s central bank has told private banks to take a “risk appropriate” approach to shorten the time taken to open accounts as the city state seeks to bolster its position as a global wealth management centre amid competitive pressure.
Chia Der Jiun, managing director of the Monetary of Authority of Singapore (MAS), said the account opening time will be reduced from six weeks or more to one month by the end of the year.
“More efficient account opening will improve the competitiveness of the wealth management industry while maintaining high standards,” Chia said in his opening remarks at the UBS Asian Investment Conference in Singapore on May 25.
He said the central bank has issued a circular guiding financial institutions on establishing a client’s source of wealth in “a risk proportionate way”, so that the institutions can “avoid unnecessary and excessive steps in the process and be more targeted”.
He said MAS will roll out case studies to help relationship managers and compliance professionals to calibrate the process to establish customers’ sources of wealth.
The circular to chief executive officers of financial institutions sent on May 25 highlights a focus on wealth sources in higher risk areas.
“MAS would like to emphasise the importance of effective and efficient source of wealth establishment processes which are risk proportionate, so that Singapore’s AML/CFT [anti-money laundering/combating the financing of terrorism] regime does not create undue burden on legitimate businesses and investors,” according to the document.
Post-scandals scrutiny
Singapore’s financial industry had been shaken by several high-profile money-laundering scandals in the last three years, prompting MAS to tighten controls, included requiring more detailed documentation of wealth sources and increased due diligence by banks and intermediaries. The tighter controls have prolonged the approval process.
MAS has also streamlined and simplified processes so as to not lose ground to rival wealth hubs like Hong Kong. It has already slashed the approval process for single-family offices seeking tax exemptions from one year to just three months.
In his speech, Chia cited safety and stability as Singapore’s advantages, a result of a commitment to a transparent and predictable legal framework, governance and pro-business environment.
“In a world buffeted by shocks and uncertainty, there will be demand for safety and stability. The attributes of safety and stability have been Singapore’s enduring advantage,” he said.
