Singapore’s financial regulator has directed private banks to reduce account opening wait times to within one month by year-end, as the city-state moves to reassert itself as a global wealth management hub after a series of money-laundering scandals damaged its reputation and drove wealthy clients to rival centers.

The Monetary Authority of Singapore (MAS) issued the directive on Monday in an attempt to reduce an average account onboarding time that currently runs to six weeks or more, the Financial Times reported. The regulator’s guidance, delivered in a letter to chief executives of financial institutions, calls on lenders to make source-of-wealth checks more risk-proportionate and concentrate their scrutiny on higher-risk areas rather than applying blanket checks across all customer assets.

“More efficient account opening will improve the competitiveness of the wealth management industry while maintaining high standards,” MAS managing director Chia Der Jiun said at a UBS event Monday, the FT reported.

The directive follows a period of reputational and operational strain for Singapore’s financial sector. 

Three years ago, authorities uncovered a S$3 billion ($2 billion) money-laundering case implicating more than ten individuals connected to a southern Chinese crime syndicate, the FT reported. Last year, police seized assets allegedly tied to a Cambodian scam operation. In the aftermath, MAS fined several banks and wealth managers for what it characterized as poor and inconsistent implementation of customer onboarding controls.

The subsequent tightening produced significant unintended consequences. Lenders sharply escalated source-of-wealth scrutiny, producing delays that stretched to an 18-month backlog for family office authorizations, according to the newspaper. The friction has cost Singapore clients, with the city-state losing ground to competing wealth centers including Hong Kong, Dubai, and Abu Dhabi.

On Monday, MAS told banks to recalibrate that balance by focusing due diligence resources on the highest-risk customers and avoiding requests for unnecessary additional documentation. “MAS would like to emphasize the importance of effective and efficient source of wealth establishment processes, which are risk-proportionate, so that Singapore’s [anti-money-laundering] regime does not create undue burden on legitimate businesses and investors,” the regulator wrote, as quoted by the FT.

Bank executives signaled support for the direction. “Delivering faster and more seamless client onboarding is a key objective across the private banking industry,” said Lee Lung Nien, Citigroup’s Singapore head, in comments reported by the news outlet. “However, this must be achieved without compromising robust risk management and regulatory compliance.”

Earlier this year, the Financial Action Task Force removed Singapore from its enhanced follow-up list, crediting the city-state with substantial effectiveness in risk assessment, international cooperation, financial-sector supervision, and asset recovery. 

But FATF also found Singapore’s beneficial-ownership safeguards, money-laundering prosecutions, and proliferation-financing controls remain short of what its risks as a major financial center demand, noting in particular that most of the city-state’s money-laundering convictions fall on low-level money mules rather than the professional enablers and syndicate operators who pose the greater threat.