Singapore’s financial sector is preparing for heightened regulatory scrutiny and an increase in enforcement actions in 2025, following a significant rise in fines over the past few years. According to a report by Fenergo, a global provider of digital solutions for client lifecycle management, know your customer (KYC), and transaction monitoring (TM), the value of fines in 2024 saw a 22% increase from 2023, totaling $3.28 million.
This marks a dramatic rise from previous years, with fines reaching $818,329 in 2022 (a 9.3% increase from 2021), and surging to $2.68 million in 2023, a massive 228% jump. The increased fines in 2024 were primarily driven by breaches related to Anti-Money Laundering (AML), KYC, and TM, with AML-related fines totaling $1.84 million and TM violations accounting for $1.43 million. Fenergo also highlighted a broader global trend in 2024, with TM violations leading the charge with $3.3 billion in fines, followed by KYC ($105 million) and AML ($1.19 billion) fines.
A key driver behind this increase in fines is the growing adoption of technology by regulatory bodies, which has significantly improved efficiency in identifying and addressing non-compliance. Rory Doyle, head of financial crime policy at Fenergo, forecasts more stringent enforcement in Singapore, drawing on lessons from financial scandals in late 2023 and the formation of public-private partnerships like Cosmic Singapore. These initiatives have enhanced regulators’ access to data, enabling them to spot issues more quickly and take decisive action.
Additionally, as China tightens its financial controls, especially in the crypto sector, there is a potential outflow of capital to jurisdictions like Singapore. The Monetary Authority of Singapore (MAS) has traditionally maintained a fair approach to penalties, but the rising trend in fines suggests they may take a more assertive stance in 2025, with increased punitive measures across the financial services sector.
Fenergo’s report suggests that financial institutions in Singapore will need to invest in robust compliance infrastructure, particularly in AML, KYC, and transaction monitoring systems, to manage the anticipated surge in enforcement actions. As regulatory actions continue to intensify, financial institutions must streamline their processes for suspicious activity reporting and other compliance requirements to avoid significant penalties.
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