Singapore’s banking industry is facing an unprecedented challenge as the number of clients abandoning banks due to slow and inefficient onboarding practices has surged to record levels, according to Fenergo, a provider of AI-powered client lifecycle management (CLM), Know your Customer (KYC) and transaction monitoring solutions.
A global study of over 150 C-level executives across corporate, institutional, and commercial banks in 2024 in Singapore revealed that nearly 90% have lost clients during the past year due to delays and inefficiencies in onboarding, which is a 35% increase from 2023.
While banks worldwide, including in the US, UK, and Japan, are having to deal with similar issues, Singapore has been hit the hardest, the study found.
Moreover, banks in Singapore are spending more time and resources on KYC processes, an integral part of AML compliance, than any other region surveyed, while 91% of respondents attributed high abandonment rates to poor data management and siloed workflows.
These inefficiencies come at a time when Singapore’s financial institutions are under pressure to comply with the national anti-money laundering strategy, launched following the high-profile money laundering scandal of 2023.
Cengiz Kiamil, managing director at Fenergo, commented: “It’s no coincidence that the spike in banks losing clients because of burdensome KYC and onboarding closely follows one of the biggest money laundering scandals in Singapore’s history. The extra scrutiny and a wide scale dependence on manual processes is having an immediate and negative impact on the client and the bank’s bottom line.”
Kiamil argued that banks that fail to digitally transform these processes risk frustrating clients who are accustomed to seamless digital experiences in other parts of their lives
“In today’s fast-evolving regulatory landscape and rising financial crime, it has never been more important for firms to strengthen their client onboarding and KYC procedures,” he added.
