Singapore’s embrace of AI in financial compliance has outpaced the world, but high client loss rates show that technology alone has yet to fix onboarding pain points.
Fenergo’s 2025 Financial Crime Industry Trends Report found that 70 percent of financial institutions globally lost clients in the past year due to slow onboarding, the highest level to date.
Singapore topped the list, with 76 percent of its financial institutions reporting client losses from inefficient onboarding, down from 87 percent in 2024.
The study, based on a survey of 600 senior decision-makers across banks, asset managers, and fund administrators in Singapore, the United States, and the United Kingdom, found that Singapore leads global AI adoption in compliance.
About 92 percent of its financial institutions use AI-driven tools for know-your-customer (KYC) and anti-money laundering (AML) processes, compared with 79 percent in the US and 77 percent in the UK.
Globally, AI use in financial crime compliance nearly doubled from 42 percent in 2024 to 82 percent in 2025.
Yet manual work remains common, with automation of periodic KYC reviews averaging roughly one-third across respondents.
Regtech firm Fenergo noted that Singaporean banks are among the fastest to onboard clients, typically taking around four to five weeks, but they still record the highest loss rates.
The findings suggest that speed alone does not guarantee client retention, with operational inefficiencies and complex compliance requirements continuing to weigh on customer experience.
Compliance Costs and Rising Penalties
The report also found that financial institutions spend heavily on compliance operations, with an average annual global cost of about US$72.9 million per firm.
Singaporean institutions spend an estimated US$68.2 million, slightly below the US (US$72.2 million) and the UK (US$78.4 million).
Regulatory penalties have also surged. Global fines related to AML, KYC, and sanctions violations reached US$1.23 billion in the first half of 2025, a 417 percent increase from a year earlier.
Most penalties were issued in North America, which accounted for 94 percent of the total in 2024.
In Singapore, enforcement has intensified following recent money-laundering cases and closer supervision by the Monetary Authority of Singapore (MAS).
Cengiz Kiamil, Managing Director for Asia Pacific at Fenergo, said,
“Our survey shows Singaporean firms lead the world in AI adoption at 92%. While more Singaporean FIs lost clients due to inefficient onboarding (76%) compared to other countries, this has changed significantly since 2024 when 87% of firms lost clients due to subpar onboarding.
This underlines the importance of embedding AI into every stage of the client lifecycle, from onboarding to surveillance, to achieve both speed and stronger risk management. By linking these processes end-to-end, institutions have proven to reduce abandonment while meeting MAS’s heightened supervisory standards.”
Fenergo’s Financial Crime Industry Trends 2025 report concludes that while AI continues to reshape compliance globally, financial institutions still face challenges balancing regulatory pressure, operational cost, and client experience.
Featured image: Edited by Fintech News Malaysia, based on images by 9moshi and mizkit via Freepik
