Eames Insights: Singapore compliance market developments

From talent pool, culture and skills to technology and trends, the market continues to change and adapt across Singapore and the wider region.

Compliance divisions continue to be impacted by developments, new technologies, environmental, social and economic guidelines, regulatory trends and much more.

I spoke to five compliance professionals across financial services in Singapore who shared their insights on the growth of the compliance market over recent years in comparison with the region, and some of the new developments in the compliance space to take note of.

Singapore's Compliance market in recent years in comparison to the wider region

• For one thing, the quality of compliance talent has increased. Many of them come well-trained from the Big 4 and the regulators, and keeping talent motivated is challenging. Younger people also do not necessarily just look at monetary compensation but also an environment to learn and develop, and a strong work culture. It is, indeed, a war for talent out there. - Benjamin Ma, Managing Director, Graticule Asset Management Asia

• As I am relatively new to Banking Compliance, I will comment based on my understanding and experience of market developments in the past year. Overall, the market remains relatively tight and sourcing for strong/good local candidates requires lots of effort, and this observation extends across regulatory compliance and financial crime compliance roles.  In general, the other market with candidates at comparable competency level is Hong Kong (which we tap into more often now), although once in a while we can find suitable candidates from Malaysia. Anecdotally, our experience shows a lack of strong candidates in regional developing countries as a suitable source for Singapore as regulatory standards differ across countries. It is worthwhile to note that as country, regulators in the region are now meeting each other more regularly and sharing learnings there would be some convergence of regulatory expectations over time. However, I suspect it is not likely to lead to greater competition for regional talents due to budgetary considerations. - Managing Director, Group Compliance, Regional Bank

• Singapore, together with HKMA and AUSTRAC is perceived to be at the forefront and may be considered more “mature” than the rest of the region. As such, Compliance functions in Singapore can be more complex, with a need to understand both local/regional/global regulatory developments and how it impacts their role and the organization. - Regional Financial Crime Director, Anti-Financial Crime certification organisation

• In Singapore, in addition to the usual Compliance roles we see from Banks, Insurance, Asset and Wealth Management space, the Banking and Finance industry has seen new fintech players entering the market, which has led to a whole new area of growth resulting in Compliance, Operational Risk, and AML/KYC roles from the RegTech space. This trend is largely in line with the development in the other APAC markets, such as Australia, China, Hong Kong, Indonesia, Malaysia, Thailand, etc. - Regional Compliance Director, International banking and financial services company

• As Singapore develops as the preferred regional hub for Asia, similarly Compliance professionals need to cover more than the Singapore market. Accordingly, the expectations on Compliance Officers to be a business partner, in addition to risk and controls second line of defence, has grown. - Senior Legal & Compliance Director, International Fintech organisation

New developments in the Compliance space to take note of

• Technology and ESG continue to dominate. Being able to monitor and ensure that increasingly sophisticated trading models are compliant, understanding marketing and trading rules in this borderless and hybrid working world that we now operate in is challenging as we need to understand new rules both in terms of products and jurisdictions.  - Benjamin Ma, Managing Director, Graticule Asset Management Asia

• The use of data analytics to obtain insights from data to support advisory, assurance and investigation work is now a norm for any Compliance function. The ability to promptly identify and assess risks, and quickly acting on them to mitigate the risks is a key differentiator and increasingly a regulatory expectation. The extent of DA usage depends on the amount a bank is willing to invest, although one has to bear in mind the risk of being the weakest link in the financial ecosystem. Using the example of financial crime-fighting capabilities, weak defences can lead to higher risks manifesting in a bank relative to its peers that have stronger defences and proactive surveillance capabilities. Besides potential regulatory penalties, reputation risk is a key consideration in how much a bank should consider investing in such capabilities. - Managing Director, Group Compliance, Regional Bank

• Technology

• Technology can be adopted to some more compliance functions more efficiently and effectively, as well as having more predictive ways to manage risks. The rate of change and how they impact/disrupt the traditional ways of doing business or how money is laundered.

• Crypto and blockchain

• Fraud as an AFC risk typology

• The rise of Single Family Offices

• Conflicting and increasingly complex Sanctions regimes

• Cyber hygiene and Cybercrime

- Regional Financial Crime Director, Anti-Financial Crime certification organisation

• I can think of a couple of regulatory themes in the past few years. Management Accountability Regimes (Australia, Hong Kong, Singapore, Malaysia, etc.) Conduct Risk Management, ESG, globalisation of business (trade and booking models) post-Brexit, as well as the onset of a number of extraterritorial regulations (from Swap Dealer Compliance program to Privacy legislation, etc.) There is also an increasing focus on Compliance Risk Assessment and Governance, and the need for Regulatory Relations, which brings together the entire Compliance program for Management Reporting and oversight. Another one relates to the use of data analytics and automation to drive regional and Global Compliance programs as well as to ensure having a centralised repository for record-keeping and issues management. - Regional Compliance Director, International banking and financial services company

• There is a lot of buzz on technology and transformation. Cutting through the noise, the regulators are still very much focused on consumer protection so adequate controls to ensure that the customer experience is not only seamless but also transparent with access to customer support, will be crucial. - Senior Legal & Compliance Director, International Fintech organisation

Should you wish to speak further on any of these topics or have a confidential chat about your next career move or business objectives, please don't hesitate to contact me at: vincent.yao@eamesconsulting.com