Singapore, 6 February 2025 – Singapore’s banking industry is confronting an alarming rise in client exodus, with nearly 90% of financial institutions losing customers over the past year due to delays in Know Your Customer (KYC) processes and inefficiencies in client onboarding. The findings, released today by Fenergo, a global leader in client lifecycle management (CLM) and regulatory technology, highlight a sharp 35% increase in client losses compared to 2023.
According to Fenergo’s global study, which surveyed over 150 C-level executives across corporate, institutional, and commercial banks in Singapore, the country’s financial sector has been hardest hit by KYC-related challenges. While banks in the US, UK, and Japan face similar obstacles, Singapore has reported the highest rate of client abandonment worldwide.
A Growing Pressure to Comply with AML Regulations
The study comes at a time when Singapore’s banks are under significant pressure to meet stricter Anti-Money Laundering (AML) compliance requirements, imposed after the high-profile money laundering scandal in 2023. With an increased regulatory burden, banks are struggling to balance compliance needs with the need to provide efficient and streamlined customer onboarding processes.
Cengiz Kiamil, Managing Director at Fenergo, commented: “The surge in client losses can be traced to the dual pressures of stricter due diligence requirements and outdated, manual onboarding processes. This is a direct result of the country’s increased focus on AML, and it is evident that the current systems are failing to keep pace with these evolving demands.”
Inefficiencies Fuel Client Abandonment
The Fenergo study revealed that 91% of executives surveyed blamed poor data management and siloed workflows for high abandonment rates. Another 79% pointed to suboptimal customer experiences during onboarding, while 47% cited overly complex processes as key factors contributing to client attrition. The findings underscore that inefficiencies in KYC and onboarding are not just compliance issues—they are hurting banks’ ability to retain clients.
As a result, Singapore’s financial institutions are spending more time and resources on KYC processes than any other region. Despite the growing regulatory pressures, the study reveals that only 1% of banks in Singapore have successfully automated the majority of their KYC workflows.
A Growing Demand for AI Solutions
In response to these challenges, there is a clear push towards AI-driven solutions. 38% of respondents indicated plans to deploy artificial intelligence (AI) to enhance operational efficiency, while 30% aim to use AI-powered tools to improve data accuracy. The report suggests that banks embracing these technologies may have a competitive edge, especially in an increasingly digital-first environment.
“AI and automation are no longer optional for banks if they want to stay competitive and compliant,” said Kiamil. “Adopting AI for KYC and onboarding processes can reduce operational inefficiencies, improve customer satisfaction, and help banks regain lost trust.”
As financial institutions in Singapore work to meet heightened regulatory expectations and address operational inefficiencies, digital transformation is emerging as the key to improving both client retention and compliance outcomes. The banks that successfully embrace automation and AI technologies will be better positioned to navigate the evolving regulatory landscape and meet the growing expectations of clients.
