Singapore’s banking sector is dealing with an unprecedented problem as shopper attrition as a consequence of sluggish and inefficient onboarding practices has reached report ranges, in response to new analysis by Fenergo.
A world research of over 150 C-level executives from company, institutional, and industrial banks in 2024 in Singapore revealed that just about 90% have misplaced shoppers over the previous 12 months as a consequence of delays and inefficiencies in onboarding – a dramatic 35% improve from 2023.
Whereas banks worldwide, together with these within the US, UK, and Japan, are experiencing comparable points, Singapore has been hit the toughest, highlighting a big industry-wide drawback.
The analysis reveals that banks in Singapore are dedicating extra time and assets to KYC processes, that are important for anti-money laundering (AML) compliance, than another area surveyed.
91% of respondents cited poor information administration and siloed workflows as the principle causes for top abandonment charges, whereas 79% of executives pointed to subpar buyer experiences, and 47% blamed overly advanced onboarding processes.
These inefficiencies come at a time when Singapore’s monetary establishments are beneath stress to adjust to the nationwide anti-money laundering technique, which was launched after the high-profile cash laundering scandal in 2023.
Cengiz Kiamil, Managing Director at Fenergo, commented:
“Banks are actually required to double down on shopper due diligence to higher perceive shopper threat as a part of the nation’s clampdown on AML. The additional scrutiny and a wide-scale dependence on guide processes is having a right away and destructive affect on the shopper and the financial institution’s backside line.”
Whereas just one% of banks surveyed have efficiently automated the vast majority of their KYC and onboarding workflows, the report reveals a rising curiosity in AI-driven options.
38% of respondents indicated plans to implement AI to boost operational effectivity, whereas 30% goal to enhance information accuracy with AI-powered instruments.
In at present’s quickly altering regulatory atmosphere and the rising menace of economic crime, companies should prioritise strengthening their shopper onboarding and KYC processes, Kiamil emphasised.
Nevertheless, conventional banks in Singapore have been sluggish to undertake modern applied sciences like cloud computing and AI, regardless of regulatory encouragement.
Alternatively, these leveraging automation and AI can rework KYC and onboarding from mere compliance duties into strategic benefits.
What was as soon as a back-office concern has now turn into a key focus on the govt degree.
Featured picture credit score: edited from freepik
