Singapore will take a “risk-proportionate” approach in maintaining its status as a trusted financial centre, as opposed to a “zero-risk” approach, says Chee Hong Tat, Minister for National Development and deputy chairman of the Monetary Authority of Singapore (MAS).
“If we are overly kiasu, I think we will not be able to capture new opportunities,” adds Chee, who was speaking at a doorstop with media during his visit to DBS Bank on July 9.
The Minister’s remarks come after the MAS slapped composition penalties totalling $27.45 million to nine financial institutions for anti-money laundering and countering the financing of terrorism (AML/CFT) requirements on July 4.
When asked what the considerations were when meting the penalties, Chee said that the central bank factored in the severity of the offences and actions required in a fair and objective manner.
“It’s not whether it is a local or international financial institution, but it is about what the nature and extent and the severity of the lapses and offences that have been committed,” he shares.
Singapore sees ‘healthy growth’ in wealth management industry
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To this end, the Singapore government is keen to maintain high standards in the wealth sector while making processes convenient and business friendly for clients at the same time.
“This is not something which are mutually exclusive,” says Chee, noting that the city-state has seen a “very healthy growth” in its wealth management industry. Over the last five years, Singapore’s compound annual growth rate (CAGR) for private bank client assets stands at over 8% every year.
Chee adds that MAS has been working with the wealth industry to reduce the duration of the time taken for clients to apply for tax incentives to three months from 12 months previously.
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The government is also working closely with the private banking industry to see how the time taken for client account openings can be lowered.
With this, the MAS will work with the industry to provide “greater clarity” in terms of the checks required, what its expectations are, what it hopes the banks and relationship managers will focus on, to avoid “second guessing” and a longer application time.
In a time where there is global uncertainty, people view Singapore as a stable and trusted hub where they can make long-term plans, says Chee. As such, there will be a whole-of-government approach including MAS, and other government agencies like the Economic Development Board (EDB), to help high net worth clients bring more of their investments to Singapore.
Some of these clients may want to set up their business operations in the city-state, invest in existing companies, start new companies or even list on the Singapore Exchange (SGX).
Yet, maintaining high standards is still a must. “We want to keep Singapore as a trusted financial centre. At the same time, we want to make sure that we provide good service, convenience and efficiency,” he says.
Singapore’s unique selling point
When asked about its unique selling point compared to other up and coming wealth hubs such as Dubai and Abu Dhabi, Chee says Singapore is “very used to competition” between different financial sectors whether it’s in wealth management or other areas.
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Given that the financial industry is a very global one, the minister believes there is enough growth in the wealth management space to have multiple wealth management centres around the world, each playing to its strengths.
On Hong Kong’s proposition as a super connector to investments from Mainland China, Chee says Singapore is an international financial sector that welcomes “genuine investments” and “legitimate wealth” from all over the world including China, India, Southeast Asia, Europe. Investments from new emerging markets like Africa and Latin America are welcome too.
“Singapore remains open as a gateway to Asia and we will be a place where we hope investors will see value in making long-term plans because we offer a stable, trusted environment.”
