On 25 May 2026, the Monetary Authority of Singapore issued Circular AMLD 05/2026, setting out how financial institutions should establish a customer’s Source of Wealth (SOW) in a risk-proportionate way. The same morning, MAS Managing Director Chia Der Jiun used his opening remarks at the UBS Asian Investment Conference to place the circular within a wider theme: a financial centre that maintains high standards while avoiding undue regulatory burden.
SOW establishment remains a core part of Singapore’s AML/CFT regime, and that is not changing. What the MAS is addressing is how the work is done, and in particular the tendency for some firms to apply more process than the risk in front of them warrants.
What the circular says
The circular supplements existing guidance, including the July 2024 circular on establishing customers’ sources of wealth and the October 2024 information paper on the MAS’ supervisory expectations. Its annex sets out three principles.
The first is to focus on what is material or higher risk. Firms are not expected to corroborate every piece of SOW information. Where existing information is already sufficient, or can be supported by reliable alternative sources or reasonable benchmarks, further corroboration may add little.
The second is to obtain information that is relevant and pertinent. The MAS cautions against unnecessary requests, such as long-dated financial or employment records, and against repeated rounds of questions that delay onboarding without a clear, risk-based reason.
The third is to take measures appropriate to the customer’s risk profile. Applying a single standard to every client, regardless of circumstances, is the approach the circular asks firms to move away from. Where red flags point to higher risk, those cases should be escalated to senior management for a decision on whether to proceed and what additional measures may be needed.
Why now
The guidance did not appear in isolation. It builds on the work of the Private Banking Industry Group’s Account Opening Workgroup, co-led by the MAS and industry, which examined where onboarding practices had drifted beyond what regulation or international standards actually require. On the same day, the PBIG issued a set of Process Enhancement Tips addressing common account opening challenges, namely for training, tiered processing, and the use of artificial intelligence (AI).
The practical aim is stated plainly. The MAS expects these measures to bring the median time to open a private banking account to within a month, compared with around six weeks at present and longer for more complex cases.
What it means for financial institutions
For larger private banks, the direction is clear enough. The harder question sits with boutique and mid-sized institutions, where compliance resources are limited and they struggle with the interpretation of relevance, materiality, and prudence. Over-collection can feel safer. It rarely is. Excessive documentation requests slow onboarding, frustrate legitimate clients, and bury genuinely material information under volume.
Proportionality is easy to misread as an invitation to do less. It is better understood as a requirement to direct effort to where the risk actually sits, and to be able to explain why. That depends on having a framework behind the judgement: a clear risk methodology, a documented rationale for the information sought, and consistent escalation when red flags appear. Without that, “proportionate” becomes a judgement call that is difficult to defend in a supervisory review.
This is where many smaller firms will need to do some work. Applying relevance, materiality, and prudence well depends on having the policies, risk assessments and decision records to support each judgement. The circular gives firms room to be more efficient. Using that room safely means having the governance to back it up.
A prompt to review the framework
Alpadis works with boutique and mid-sized financial institutions in Singapore on AML/CFT frameworks, customer onboarding and the policies that sit beneath them. For firms reviewing their SOW approach against the new guidance, the starting point is usually the same question: does the current process reflect the risk, or does it reflect caution? The circular is a good reason to ask it properly.
