A high-net-worth client walks into a Singaporean bank, eager to open an account. Three months later, frustrated by the endless paperwork and delays, they take their business to Dubai. Does this sound familiar at all? Well, this is the reality Singaporean banks face this year — with client abandonment at record highs due to outdated compliance processes. According to our research report, KYC in 2024 , nearly 90% of banks have lost clients in 2024 due to slow and inefficient onboarding, the highest among major financial hubs, outpacing even the UK and US.
Much of this upheaval stems from Singapore’s 2023 financial crime scandal, which triggered one of the largest regulatory crackdowns in the country’s history. In response, the Monetary Authority of Singapore (MAS) acted swiftly, implementing enhanced anti-money laundering (AML) measures to safeguard the integrity of the financial system, with technology and innovation playing a key role.
In contrast, while regulators moved quickly to modernise oversight systems and infrastructure, many banks have yet to match that agility. Instead, they doubled down on outmoded manual compliance processes that are now proving counterproductive; more than half (56%) of banks in Singapore still operate the majority of corporate client onboarding workflows manually. And only 1% have successfully automated the majority of their KYC and onboarding workflows.
The result? Higher costs, longer wait times, and a frustrated customer base. While the increased scrutiny is essential, inefficient workflows are driving clients away and eroding the banks’ bottom lines.
Banks that fail to modernise aren’t just losing clients—they're jeopardising Singapore’s reputation as a financial hub. The industry faces a clear choice: embrace automation or risk becoming obsolete.
The cost of stagnation
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Banks in Singapore spend more on KYC than any other region, yet the onboarding process still takes over 100 days on average.
They are fully aware of this. Our global study surveyed over 150 C-level executives across corporate, institutional, and commercial banks in Singapore last year, and we found that 91% of executives cite poor data management and siloed workflows as the biggest reason for client abandonment. Meanwhile, 79% blame a poor customer experience and 47% say onboarding is overly complex.
This isn’t sustainable. Clients have options, and if their first experience with a bank is a frustrating, drawn-out onboarding process, they will go elsewhere.
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The competition isn’t waiting so why should Singaporean banks?
Competition is no longer just between banks; it’s between financial ecosystems. Digital-first banks, fintech platforms and AI-powered compliance providers are redefining client expectations with seamless onboarding, real-time verification and automated compliance that reduces friction while maintaining regulatory standards.
Corporate clients, meanwhile, are no longer bound by geography. Many are shifting their banking relationships to offshore financial hubs like Hong Kong and Dubai, where institutions have modernised their compliance infrastructure, offering streamlined KYC processes powered by AI-driven risk assessment and robust identity verification tools.
Alternative financial services¾ including embedded finance, private credit platforms and blockchain-based solutions which provide decentralised financial services that reduce reliance on traditional banking intermediaries¾ are also gaining traction. With faster transaction speeds and fewer bureaucratic process hurdles, these alternatives may be seen as viable replacements for traditional banking, particularly for businesses operating across multiple jurisdictions.
Financial hubs such as Dubai, for instance, have implemented compliance infrastructure that include the introduction of legal frameworks like the UAE foundations law, enhancing efficient onboarding and robust wealth structuring options. These trends underscore the shift towards more agile and technologically advanced financial services.
The window of opportunity is closing
Not all banks are losing out, however. Those that have embraced automation and AI-driven compliance solutions are winning over clients frustrated by sluggish competitors.
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So, it is time for banks to walk in step with MAS regulations while embracing automation and artificial intelligence (AI) to enhance KYC and onboarding practices. But the window of opportunity to turn this into a competitive advantage is closing.
We see that more and more banks are exploring and planning to adopt AI in 2025. Our latest report shows that 38% of banks surveyed in Singapore plan to deploy AI to improve operational efficiency, while 30% aim to enhance data accuracy,and the numbers will only increase with time.
From our viewpoint there is a growing understanding from the sector that Singapore regulators and clients are expecting a higher level of automation and smoother workflows in financial processes. Yet, to reap the awards of AI, cloud adoption is a critical precursor and large corporate and institutional banks in Singapore have historically been very conservative about adoption.
Singapore should lead in KYC innovation
Singapore is a thriving global financial hub—but it is at risk of falling behind. KYC shouldn’t be a bottleneck; it should be a seamless, technology-driven process. Clients, regulators, and competitors won’t wait.
Banks must embrace automation now — or risk irrelevance. The financial hubs of tomorrow are being built today, and Singapore’s banks must decide whether they will lead or be left behind.
Cengiz Kiamil is the managing director for Apac at Fenergo
