COVID-19 may have set the world upside down, but business leaders know, crises come with tremendous opportunities for competitive reinvention and differentiation. For businesses, a strategic rethink today has the potential to catalyse stronger operational resilience and positioning for a new era of growth.
In the past year, aside from the fundamental shifts in the ways of working and constant changes in the macro-business environment, COVID-19 has heightened regulatory and compliance expectations. For private banks, it’s time for enhanced focus on the evolving operational and regulatory risks landscape.
Our 2020 review of private banks in Singapore revealed several gaps across key thematic risk areas that call for immediate attention. These thematic areas include:
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Anti-money laundering (AML) / Countering the financing of terrorism (CFT)
AML/CFT continues to be an area of focus. In addition, we note that banks can improve on the source of wealth corroboration assessment.
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Sales and advisory
A hot topic for the year, we have noted multiple findings on pricing controls and disclosures and investment suitability across the board.
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Credit risk management
Credit risk management was key in 2020, a year of intense market volatility. Banks have been quick to adjust and dealt with the volume, albeit with some delays in periodic reviews.
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Operational risk management
While lapses in operational controls are not uncommon, we have observed that the timely reporting of operational risk incidents for internal management information (MI) can be improved.
In our quick read, we provide an overview of these gaps, while outlining new risk areas for private banks. We also shine the spotlight on action areas for private banks to stay ahead in the new world.
The Monetary Authority of Singapore (MAS) is highly focused on private banks’ management of AML/CFT risk, and in recent years, has been taking active steps to drive the culture and conduct risk agenda across the financial institutions industry. Whilst the private banks reassess their strategies and adapt working practices for the new normal, we urge them to proactively take action across the emerging new risk areas to build resilience and stay ahead.
We have a well-connected network of private banking and wealth management specialists who are able to assist you in navigating the new risk landscape with:
It is often said that the wise learn from the experiences of others. With this philosophy in mind, we have summarised the various operational and regulatory compliance matters that came up from our audit of private banks in 2019.
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