Singapore is seeking to set clearer standards for how banks tackle illicit flows after a multibillion-dollar money laundering scandal rocked the city state.

While the country already has high standards of rules, lenders vary in their execution of anti-money laundering processes, Chia Der Jiun, the Monetary Authority of Singapore’s (MAS) managing director, said on Thursday at a briefing. Singapore recently convicted all 10 people arrested in the record S$3 billion (US$2.2 billion or RM10.44 billion) laundering case, which ensnared more than a dozen banks in the city.

“The money laundering case of the past year has not changed our growth trajectory, nor our position on regulatory standards,” Chia said. Still, “what is needed is to set a clearer waterline of practices across the industry, rather than a tightening of standards and requirements.” Chia’s remarks confirmed earlier reporting by Bloomberg News on the move to come up with consistent standards in the banking sector. 

The comments also underscore the significance of upholding the country’s reputation as a top global wealth hub that has boosted businesses at banks from DBS Group Holdings Ltd to UBS Group AG. Assets managed by financial firms in Singapore rose 10% to S$5.41 trillion last year from a year ago, he said. The rise in assets under management (AUM) marks a rebound to a level last seen in 2021.

Banks continue to experience interest, growth and assets coming in, Chia said in response to a question about whether wealth flows have slowed after last year’s laundering scandal. Singapore doesn’t “see things in terms of a race or competition with other centres”, he said, referring to rivalry with other wealth hubs like Dubai and Hong Kong.

There were financial firms with “material nexus” to the laundering case, according to Chia. The MAS is currently reviewing its findings after engaging with the firms, to determine appropriate actions, he said.

Separately, Chia pointed to the growth in private markets and private credit as areas that have boosted the financial services sector. The corporate debt market has also rebounded strongly, he said at the briefing, which was held along with the release of the central bank’s annual report. 

Private equity and venture capital AUM reached more than S$650 billion in 2023, with over half of these assets directed towards supporting business growth in the Asia-Pacific region. Large global private credit managers are expanding their Asian teams in Singapore, and new managers are setting up their presence to tap investment opportunities, according to Chia. 

The briefing saw Chia engaging on a variety of topics after he succeeded Ravi Menon, the longest-serving MAS chief, at the start of this year. Chia rejoined the MAS from the Ministry of Manpower, where he served as the permanent secretary for development. Before that, he had spent close to two decades at the central bank-cum-financial regulator, rising to become one of Menon’s deputies.

  - Bloomberg