Singapore Financial Institutions Face Increased Regulatory Scrutiny in 2025

Financial institutions in Singapore should prepare for stricter regulatory measures and an uptick in enforcement actions in 2025, according to a report by Fenergo. Following a significant rise in fines in 2024, Singapore's regulatory bodies are expected to continue ramping up their efforts to ensure compliance, particularly in areas related to anti-money laundering (AML), know-your-customer (KYC), and transaction monitoring.

In 2024, FIs in Singapore experienced a 22% increase in regulatory fines, totaling US$3.28 million, up from US$2.68 million in 2023. This marks a notable contrast to the global trend, where financial penalties dropped by 30% in 2024. The rise in fines comes amid an increased adoption of technology by regulatory bodies, which has led to enhanced data collection and more efficient enforcement.

Rory Doyle, head of financial crime policy at Fenergo, noted that private-public partnerships, such as COSMIC Singapore, have played a pivotal role in improving the detection and mitigation of financial breaches. "With access to more data, regulators are now able to act more swiftly to prevent and address compliance issues," Doyle said.

The majority of fines in Singapore in 2024 stemmed from AML/KYC violations and transaction monitoring breaches, which were also the leading causes of fines globally. In total, US$3.3 billion in penalties were issued worldwide for transaction monitoring violations alone. As the focus on environmental, social, and governance (ESG) issues grows, Singapore is expected to see increased scrutiny in this area as well, with global fines for ESG-related breaches reaching US$37.69 million in 2024.

Experts warn that financial institutions in Singapore must brace for continued regulatory scrutiny, as authorities seek to strengthen compliance frameworks in the new year.