SINGAPORE - An explosion of new banking regulations is taking a significant toll on banks and other financial services firms based in Singapore.
About half of them plan to boost spending on meeting the tougher regulatory requirements, a new report has found.
Of these firms, about one-fifth will be ramping up expenditure on complying with new regulations by more than 20 per cent this year over last year, said the report by recruitment firm Robert Half.
Almost all the rest expect to spend between 1 per cent and 20 per cent more on this expense.
In recent years, banks and finance firms have been hit by various regulations aimed at curbing money laundering, for instance.
New global rules, known as Basel III, relate to how much capital banks must set aside.
Robert Half surveyed 150 Singapore-based chief financial officers (CFOs) and chief operating officers (COOs) from the financial industry.
Robert Half Singapore director Stella Tang said firms are boosting teams in charge of complying with the regulations and training new staff for the role.
"Banks and financial services companies need to spend money to keep ahead... This means hiring people with the right skills and more training and refresher courses for existing staff. Professionals with regulatory compliance experience are in hot demand right now," she said.
Anti-money laundering was ranked the biggest challenge by 43 per cent of the top financial executives surveyed, followed by Basel III and anti-corruption rules.
About nine in 10 executives said regulations had led to greater workloads and rising costs.
This view was echoed by OCBC chief executive Samuel Tsien, the new chairman of the Association of Banks in Singapore, in a recent speech: "Apart from the cost of putting in place (compliance-related) processes to ensure that they are being implemented, there are significant costs associated with systems enhancements for data extraction and activity monitoring."
Managing external auditors and hiring experienced compliance staff were key challenges.
Robert Half also surveyed CFOs and COOs from six other key financial centres such as France and the US. A total of 1,100 executives were surveyed.