How Apiax sets out to help wealth managers in Singapore

Asia has become the fastest-growing region in terms of private wealth. Singapore, together with Hong Kong and Switzerland, rank as the top 3 wealth hubs in the world and finds itself in a great position to benefit from the vast growth of Asian wealth. 

Singapore’s open access to global markets is attractive to high-net-worth individuals and financial institutions around the world. The country’s fully developed financial services ecosystem is appealing to international investors and wealth managers alike.

According to the Asian Private Banker’s 2018 report on the Role of Singapore as an Offshore Wealth Management Hub, around 82.5% of Singapore’s assets under management (AUM) originate from abroad. The report also found that 85% of industry professionals expect an increase in offshore inflows to Singapore in the next three years. 

Risk factors for wealth managers in Singapore

With a growing international client base, Singapore’s financial services providers are faced with the challenge of needing to quickly and efficiently understand the regulations governing relationships with clients abroad.

“Wealth management firms and private banks in the city-state are set to increase their AuM in the coming years, making access to high-quality advice [ever more] crucial”, as Spear’s, a multi-award-winning wealth management magazine, stated in their article from June 2021. 

Wealth managers who provide their services and products from local booking centers or distribution hubs into other countries or serve international clients in Singapore now see themselves confronted with an increased complexity of country-specific regulations. They are also having to find ways to introduce customised, value-added services and compete with international entities despite that regulatory complexity.

Joining together the external regulatory and business environment with clients’ individual needs creates countless combinations of regulatory criteria and data points to be taken into account. To facilitate this process, wealth managers often use digital tools to optimise client portfolios and investment strategies. That said, even if comprehensive and sensitive to market trends, they still struggle to fully process all compliance requirements—especially in a cross-border context. 

According to the Asian Private Banker’s 2019 report, “the consensus among regulators is that cross-border exposure has become the most significant risk for the private banking sector”. 

Juggling various regulatory requirements will always likely have a drawback on cross-border activities. And in a sector prone to constant regulatory change and increased regulatory scrutiny, best practices may become outdated overnight, making affected proposals poorly suited to investors’ needs or even outright non-compliant.

Turning compliance into a business enabler for wealth managers in Singapore

The tension between serving clients across multiple countries and complying with local regulations is in large part the result of the shortcomings of traditional and manual approaches to cross-border compliance. Too often, respective compliance restrictions are maintained in lengthy and difficult to understand legal opinions or manuals. So, what can firms do to reduce risk and make their processes more efficient?

The answer is to operationalise and modernise compliance, rather than have it as a largely analogue overlay. Wealth managers need to adjust their operating models, as well as standardise and automate whenever possible.

In our view, this means embedding compliance into processes and systems so that regulatory knowledge can be delivered in a context- and role-specific way. 

When regulations are embedded in a specific system or process (e.g. the investment advisory or travel approval process) in the form of digital rules, monitoring and controls can be minimised as the rules are checked on a “pre-activity” basis. Therefore, using such a solution allows an organisation to shift from extensive training and risk-based post-activity controls and gradually move towards a smart and digitally powered low-risk organisation.

A solution like Apiax’s enables wealth managers to retrieve regulatory requirements across jurisdictions at the click of a button and therefore serve more clients; realise more client interactions with easy access to regulatory restrictions; provide tailored services and advise even in the most highly regulated products; and reduce risks by clearly understanding the do’s and don’ts.

We put our solution to the test when we worked on a Proof-of-Concept (PoC) with a global universal bank that has a strong client base in Singapore. Prior to working with us, the client used a traditional cross-border framework to manage country-specific regulations in more than 80 countries.

As part of this PoC, Apiax digitised the client’s existing cross-border country manuals. Digitising their compliance framework allowed the client to provide hundreds of relationship managers with yes-or-no answers on their most frequent regulatory questions right in their existing tools. It strengthened the bank’s compliance framework and simplified the lives of customer-facing staff.

This PoC proved that smart compliance solutions can empower firms to overcome the tension between a global customer base, increasing regulation and increased competition. 

Getting traction in Singapore 

Apiax opened an office in Singapore in September 2020. To help spread the word about how Apiax can help wealth managers in Singapore, we built a local business development team. 

In the past year, Apiax has been recognised by Regulation Asia as “One to Watch”, as well as won the “Most Promising FinTech” Asian Private Banker award and “Best Compliance/RegTech Solution” DigFin award. We also became finalists at the Hong Kong Monetary Authority RegTech Challenge and took part in F10’s first Incubator & Accelerator program in Singapore.

Needless to say, none of the accomplishments previously mentioned would have been possible without our experienced team. We are confident that we will continue to empower financial institutions in Singapore (and beyond) to realise business opportunities with regulatory technology. 

About Apiax

Apiax helps financial institutions to expand their business opportunities with compliance automation. Welcome to our blog!