Singapore recently suffered from the largest money laundering scandal in its history and various new measures have been introduced to enhance controls. The local regulator insists that this has not changed the growth trajectory of the city-state’s wealth management industry. 

Following the S$3 billion ($2.2 billion) money laundering scandal in Singapore – the largest such case in the city-state’s history – local authorities have been making various new moves in response.  

A new inter-ministerial committee was formed to review Singapore’s anti-money laundering regime to ensure it remains current to combat sophisticated financial crimes. New legislation and revisions have also been introduced to, for example, deepen oversight of corporate service providers. Changes have also been made in the financial sector, such as the launch of a platform for banks to share customer information. 

Wealth Management Outlook

Will flows slow down? Monetary Authority of Singapore (MAS) insists that the outlook remains unchanged. In his remarks during a media conference, MAS managing director Chia Der Jiun noted that the wealth management industry has grown in line with the asset management industry, which saw assets increase by a compound annual growth rate of 10 percent from 2018 to 2023 to reach S$5.4 trillion.

«The money laundering case of the past year has not changed our growth trajectory, nor our position on regulatory standards. What we have observed broadly is that while we have a high standard of AML/CFT requirements, implementation and practices of individual financial institutions vary,» Chia said in remarks published online. 

«Hence, what is needed is to& set a clearer waterline of practices across the industry, rather than a tightening of standards and requirements. We plan to engage industry to clarify our supervisory expectations and help industry implement our AML requirements more evenly across the sector.»

Long Waiting Time

One of the oft-cited challenges in Singapore is the long waiting time to onboard new clients. According to a «Business Times» report, Chia said that the lengthier duration does not apply in all cases, especially when documentation is clearer.  

Leong Sing Chiong, deputy managing director of the markets and development group at MAS, said that the longer waiting time for tax incentives was also attributable to a backlog caused by a surge in cases, adding that a team has been put in place to clear it by the end of 2024.

Rival Hubs

In contrast, rival financial center Hong Kong has been frequently lauded for its speed with no pre-approval required to obtain tax incentives. According to Family Office Association HK chair Jessica Cutrera, the «reputation for being slow, for being difficult» has worked against competing hubs compared to Hong Kong, which has the «ability to move relatively quickly».

But Chia believes that Singapore views the matter differently. 

«I don’t think we see things in terms of the race or competition with other wealth centers,» he said on rising competition from other wealth hubs, including Hong Kong and Dubai.