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Like other wealth management centres around the world, Singapore is forcing banks to tighten checks on clients as governments crack down on tax evasion and money laundering. Photo: Reuters

Singapore faces shortage of compliance experts in fight against dirty money

Demand for experienced compliance experts soars in city state as banks go on hiring spree amid the government crackdown on tax evasion

Singapore's fight to stem illicit fund inflows has shoved private bankers into a new quandary - finding enough qualified compliance specialists to ensure the money passing through their accounts is clean.

Like other wealth management centres around the world, Singapore is forcing banks to tighten checks on clients as governments crack down on tax evasion and money laundering.

It's never easy to find the right people - it's a war for talent as far as we are concerned
Conrad Lim, LGT Bank

In Singapore, private bankers say extensive checks on the origin of clients' money, tax status of those funds, whether they have political ties and the reasons behind fund transfers mean it could take up to three months to open a bank account. Five years ago, it would have taken just a week.

Compliance jobs were considered unattractive until a few years ago when the top dollar went to investment bankers and traders. Tougher regulations globally since the 2008 financial crisis have boosted demand for experienced compliance officers, who can get a pay rise of as much as 30 per cent if they change companies, according to a Robert Walters survey this year.

"It's never easy to find the right people, and it's tougher than ever before - it's a war for talent as far as we are concerned," said Conrad Lim, the deputy chief executive at LGT Bank (Singapore) and head of the compliance department in Asia.

Lim's compliance team has more than tripled in size over the past 10 years, but he is still looking to bring in more people as the bank's regulatory burden increases.

Overly onerous know-your-customer checks might lead to longer turnaround times or loss of clients, said Mark Wightman, a partner for wealth and asset management advisory at EY.

But a softer approach may incur the wrath of regulators. The Monetary Authority of Singapore said last week that it issued nine warnings and reprimands last year to financial institutions in the city state for deficiencies in their anti-money-laundering or counter-financing terrorism measures.

It did not identify the institutions, but said six banks were fined with penalties ranging from S$1,000 (HK$5,650) to S$700,000.

Last month, the reported that Malaysian investigators had traced nearly US$700 million in funds moving from Falcon Private Bank in Singapore into a bank account of Malaysian Prime Minister Najib Razak.

Najib has denied taking money for his personal gain.

Singapore's police force said last week that it had frozen two bank accounts in relation to the probe. Zurich-headquartered Falcon said it was co-operating with the MAS over the matter.

MAS managing director Ravi Menon concedes banks have a tough time finding the people to do extensive checks on clients amid the government clampdown on money laundering but said it was working with the industry to train more people in this field.

A European wealth manager said the number of people in his compliance department had more than doubled in the past three years. "We have been hiring like crazy."

Some large banks like Credit Suisse are launching "grow-your-own" training programmes in Singapore to expand the talent pool themselves.

"The competition for experienced professionals is fierce. The rapid growth of some markets is making it even harder to secure the right talent in this area," said Lito Camacho, the vice-chairman for Asia-Pacific and chief executive for Singapore at Credit Suisse.

A survey on the cost of compliance, which polled nearly 600 compliance professionals, found 78 per cent of the respondents in Asia expected the cost of senior compliance staff to increase this year, higher than in Europe or the United States.

Financial institutions in the city state have S$2.3 trillion in assets under management.

This article appeared in the South China Morning Post print edition as: Singapore faces staff shortage in laundering fight
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