New Guidance for FIs on Establishing SOW in a Risk-Proportionate Manner and Improving Private Banking Onboarding Processes to Achieve Faster Account Opening by End-2026

On 25 May 2026, the Monetary Authority of Singapore (“MAS“) issued Circular No. AMLD 05/2026 titled “Risk-Proportionate Source of Wealth Establishment” (“2026 Circular“) providing guidance to financial institutions (“FIs“) on establishing a client’s source of wealth (“SOW“) in a risk-proportionate manner.

The 2026 Circular is intended to ensure that Singapore’s anti-money laundering (“AML“) and countering the financing of terrorism (“CFT“) regime does not create an undue burden on legitimate businesses and investors. It guides FIs on applying the risk principles of materiality and relevance into their SOW establishment approaches and processes, so that they can be more targeted and avoid unnecessary and excessive steps that would be disproportionate to MAS’ requirements and international standards.

On 25 May 2026 as well, the Private Banking Industry Group (“PBIG“) committed to enhancing client onboarding practices to reduce account opening times for most clients to within one month by end-2026 (in comparison to the current industry median of five to six weeks and longer for more complex cases). In support of this, the PBIG published a set of “Process Enhancement Tips” to address common client onboarding process-related challenges faced by banks.

The Account Opening Working Group, co-chaired by MAS and the private banking industry, has since mid-2025 been developing more efficient, risk-proportionate account opening practices that are aligned with regulatory standards, including clearer approaches to streamline processes and harness technology to accelerate client onboarding. Case studies and training for relationship managers and compliance professionals will follow.

We set out below the key details from the 2026 Circular and the “Process Enhancement Tips”, which, taken together, are expected to lead to significantly more efficient account opening processes for the industry.

2026 Circular

1. Focus on material or higher risk SOW: FIs should: (i) focus on corroborating SOW information that is more material or of higher risk; and (ii) avoid attempting to corroborate every single piece of SOW information.

2. Obtain relevant and pertinent information:
   • FIs should: (i) consider whether existing information is already sufficient, if supplemented by alternative, reliable information or reasonable and relevant benchmarks; and (ii) avoid unnecessary or unreasonable information requests.

   • FIs should: (i) consider whether there is a risk-based justification before seeking further information; and (ii) avoid making multiple rounds of information requests that could unreasonably delay onboarding without such justification,

3. Take measures appropriate to customer’s risk profile: When FIs reference the AML/CFT Industry Partnership’s (“ACIP’s“) “Best Practices on Source of Wealth Due Diligence” paper, they should:
   • Implement best practices in a targeted and risk-appropriate manner, taking measures which are relevant and proportionate to the SOW risks posed by the customer based on risk profile and attributes, rather than taking a one-size-fits-all approach.
   • Where there are red flags that may indicate higher risk concerns, escalate such cases to senior management, who should then consider whether to establish business relations, and if so, whether additional risk-mitigating measures are required. Close oversight should thereafter be exercised over these accounts on an ongoing basis.

For more information on the ACIP’s paper, please refer to our May 2025 Legal Update titled “ACIP Shares AML/CFT Best Practices for FIs on Establishing Customers’ SOW and Addressing Wealth Management Risks“. For more information on MAS’ earlier SOW guidance, including MAS’ Circular No. AMLD 08/2024 on “Establishing the Sources of Wealth of Customers” issued on 26 July 2024, please refer to our August 2024 Legal Update titled “MAS Circular Provides Further Guidance for FIs in Wealth Management Sector on Establishing Sources of Wealth of Customers“.

Process Enhancement Tips

1. Learning and sharing:
   • Senior members from the onboarding team should engage interactively with front office teams and discuss real-life past examples, as part of a “client due diligence huddle”.
   • Frequent knowledge sharing sessions should be initiated between onboarding officers, to share their experiences and learn from each other, particularly for complex cases.
   • Risk and compliance training on corroboration of documents should be initiated or enhanced, covering topics such as sufficiency, relevance, materiality and prudence, and real-life examples should be provided.

2. Process and structure:
   • Accounts should be triaged based on complexity, which is a process that should involve a “control tower” with the relevant seniority. Turnaround times should be measured accordingly.
   • Pre-review processes should be introduced, and onboarding activities should be run concurrently (e.g. the documenting of a client’s SOW and the running of name list screening concurrently).
   • Tools and training should be adopted to support the methodology on the plausibility assessment of a client’s journey.
   • Panels should be introduced for complex or high-risk cases, with representation from the first line of defence and the second line of defence, as appropriate to the bank’s risk appetite. Panels must be empowered to make decisions.
   • The “maker” or specialist function should be introduced or enhanced, as an additional dedicated resource that front office teams can tap on for complex cases.

3. Technology:
   • Digitalisation should be implemented to the degree possible on account opening forms and documents. The electronic signing of forms and documents should be enabled as well. Further, indemnities should be embedded as appropriate.
   • Technology such as artificial intelligence (“AI“) should be used for screening (e.g. name list screening or adverse media searches), with the tool having the capability to read non-English characters.
   • Technology such as AI, agentic AI or Robotic Process Automation, should be used to replace manual processes and to document a client’s SOW.

Click on the following links for more information:

Available on the MAS website at www.mas.gov.sg:

• Opening Remarks by Mr Chia Der Jiun, Managing Director, Monetary Authority of Singapore at the UBS Asian Investment Conference, Singapore Wealth Edition, on 25 May 2026
• Circular No. AMLD 05/2026 titled “Risk-Proportionate Source of Wealth Establishment” 

Available on The Association of Banks in Singapore’s (“ABS“) website at www.abs.org.sg:

• • ABS Media Release titled “Singapore Private Banking Industry Group to Enhance Customer Onboarding Processes to Achieve Faster Account Opening Times”
  • PBIG “Process Enhancement Tips”