Rethinking Source of Wealth

The MAS circular on risk-proportionate Source of Wealth (SOW) presents a clear opportunity for financial institutions to move away from one-size-fits-all approaches and reintroduce a truly risk-based lens into onboarding. However, this shift creates a hidden paradox: while flexibility is the goal, it can also increase operational complexity. Added segmentation, governance layers, and corroboration standards can make processes harder to execute consistently at scale.

Over time, increased regulatory scrutiny has pushed institutions to build SOW frameworks focused on defensibility and consistency. This has led to more documentation, additional approval layers, and similar requirements being applied across customers with very different risk profiles. As a result, lower-risk customers may face unnecessary friction, reinforcing the need to better align controls with actual risk exposure.

At the same time, onboarding challenges are driven not just by policy, but by execution. Fragmented workflows, repeated manual reviews, and low-trust customer engagement channels contribute to delays and inefficiencies. Improving outcomes requires rethinking how information is collected and managed - leveraging segmentation, materiality, stronger operating models, and digital or AI-enabled solutions to create more scalable and customer-centric processes.