S'pore private banks gear up for higher demand as rate cuts loom

More wealthy clients set to look for higher returns, putting focus on sector’s services

- Prisca Ang

Private banks are gearing up to meet an expected surge in demand from well-heeled clients amid increased scrutiny of the sector.

Looming interest rate cuts in the United States will likely prompt wealthy customers here and elsewhere to look for other ways to boost investment yields, which in turn will put heightened focus on the private banks that cater to them.

Meanwhile, Singapore's financial regulator has reiterated the need for the private banking industry to uphold high standards of market conduct and transparency in its dealings with clients.

This involves providing more transparency on fees, appropriate disclosures to clients and ensuring that pricing arrangements agreed with customers are adhered to, said a Monetary Authority of Singapore (MAS) spokesperson.

The MAS was responding to The Straits Times' queries about a broader review of private banking pricing and disclosure practices that it carried out from 2019 to 2023 after earlier inspections.

Its review led to a $3.9 million civil penalty being imposed on Credit Suisse in December over its failure to prevent or detect misconduct by relationship managers in its Singapore branch.

The regulator said the review showed instances where clients were charged more than what was represented by relationship managers and agreed to in fee schedules or pricing arrangements.

"Following the review, banks have taken actions to address gaps identified in their controls, and to review the conduct and practices of relationship managers," its spokesperson told ST.

PwC Singapore partner Quek Kian Leong said he has found that deliberate attempts to overcharge clients are uncommon.