How Canada’s Banking Crisis Raises Questions for Asia’s Financial Hub
SINGAPORE – As Canada’s largest seniors’ advocacy group escalates its battle against major banks over alleged predatory sales practices, financial regulators and consumers in Singapore are watching closely. The controversy, which erupted this week, highlights vulnerabilities in banking systems that transcend borders—including those in one of Asia’s most sophisticated financial centers.
The Canadian Crisis: A Wake-Up Call
The Canadian Association of Retired Persons (CARP) has publicly accused the country’s biggest banks of prioritizing profits over client welfare after a damning regulatory review revealed that 25% of bank branch mutual fund advisers admitted clients were sometimes recommended products that weren’t in their best interests. The review, conducted by Ontario Securities Commission and the Canadian Investment Regulatory Organization, surveyed nearly 2,900 advisers and found pervasive sales pressure within five major bank-affiliated dealers.
Anthony Quinn, CARP’s CEO, characterized the situation bluntly: banks are “not interested” in voluntary reform, suggesting regulatory and legislative intervention may be necessary to protect vulnerable customers, particularly seniors who have maintained loyalty to the same institutions for decades.
The Canadian Bankers Association’s measured response—emphasizing that the survey reflected “sentiment” rather than verified behaviors—has done little to quell concerns. CARP made the association’s reply public specifically because it appeared to defend the status quo.
Singapore’s Proactive Framework: Leading But Not Perfect
Unlike Canada, where concerns about predatory sales have reached a boiling point, Singapore has built one of the world’s most comprehensive regulatory frameworks for protecting vulnerable investors—particularly the elderly. The Monetary Authority of Singapore (MAS) has implemented multiple layers of safeguards that go considerably beyond what exists in many Western jurisdictions.
Defining and Protecting Vulnerable Customers
Singapore formally recognizes “Selected Clients” (previously termed “vulnerable customers”) as those meeting at least two of three criteria: aged 62 or older, not proficient in English or the language used in transactions, or lacking GCE ‘O’ or ‘N’ level qualifications. This definition, while not perfect, provides clear parameters that financial institutions must follow.
The protections are substantial. When investment products are sold to vulnerable customers, supervisors must conduct pre-transaction callbacks to verify understanding of products and risks. For complex investment products, vulnerable customers must receive mandatory financial advice regardless of their stated preferences. These requirements were strengthened significantly in December 2025, with enhanced documentation and verification procedures taking effect.
Mystery Shopping and Enforcement Actions
MAS has conducted periodic mystery shopping exercises to test compliance. The third such exercise, completed in 2021, found that 88% of product recommendations were suitable—an improvement from 70% in the previous 2011 exercise. However, the results also revealed concerning gaps: most financial adviser representatives failed to properly identify vulnerable customers, even though identifying these clients is mandatory for triggering additional protections.
The regulatory response to violations has been decisive. In 2018, MAS issued prohibition orders against six individuals for mis-selling investment products, with bans ranging from two to seven years. More recently, in September 2025, MAS prohibited a former AIA representative for three years after she sold complex investment-linked products to a client with intellectual disabilities without proper consideration of his financial circumstances.
The Investment-Linked Policy Challenge
Singapore’s experience with investment-linked policies (ILPs) mirrors some of the concerns raised in Canada. These products, which combine insurance and investment elements, have been particularly problematic for vulnerable customers. In September 2025, MAS proposed classifying ILPs as complex products, requiring red-colored warning bands on product sheets and mandatory financial advice for vulnerable customers purchasing them.
Parliamentary questions have focused attention on this issue, with lawmakers pressing MAS on why stronger safeguards weren’t implemented sooner. The regulator’s response emphasized the evolving nature of product complexity and the need to balance investor protection with market access.
Where Singapore Could Learn from Canada’s Crisis
Despite Singapore’s advanced framework, the Canadian situation offers several cautionary lessons:
1. The Conflict of Interest Problem
Canadian advocacy groups have called for branch-level employees to be allowed to offer non-bank-affiliated investment products—a structural reform that addresses inherent conflicts of interest. Singapore’s banking sector faces similar dynamics, where advisers working for bank-owned dealers may face pressure to recommend proprietary products even when better alternatives exist elsewhere.
While MAS requires financial institutions to put clients’ interests first and identify conflicts of interest, the structural incentive to cross-sell bank products remains. The question is whether regulatory requirements can truly overcome these institutional pressures, or whether more fundamental structural reforms are needed.
2. The Sales Culture Challenge
The Canadian review revealed that most advisers agreed performance scorecards and targets “may influence” their job behaviors—regulatory language for what appears to be systematic sales pressure. Singapore addressed this issue in 2020 by implementing a Balanced Scorecard Framework requiring at least 50% of remuneration to be tied to non-sales factors like customer outcomes and compliance.
However, effectiveness depends on implementation. If banks treat the framework as a compliance exercise rather than a culture change, the underlying problems persist. The December 2025 strengthening of these requirements suggests MAS recognizes ongoing challenges.
3. The Trust Gap Between Regulators and Advocates
CARP’s decision to publicly challenge the banking industry’s response reflects a fundamental trust deficit. In Singapore, consumer protection largely flows through regulatory channels rather than independent advocacy organizations with the public platform that CARP enjoys. This has advantages in terms of regulatory coordination but may mean some consumer concerns receive less public attention.
The Financial Industry Disputes Resolution Centre (FIDReC) handles consumer complaints, but its case volumes and outcomes aren’t as prominently discussed in public discourse as they might be. Greater transparency around dispute trends could help identify systemic issues before they reach crisis proportions.
The Scams Crisis: A Different but Related Challenge
While Canada grapples with institutional sales practices, Singapore faces a parallel challenge with financial scams that disproportionately affect the elderly. In 2024, Singaporeans lost S$1.1 billion to scams across 51,501 reported cases—equivalent to one scam every ten minutes. Cryptocurrency scams nearly quadrupled as a share of total losses.
This epidemic has prompted aggressive responses, including the phasing out of SMS one-time passwords for bank logins and consideration of FIDO-compliant hardware tokens for authentication. Yet the scams crisis underscores a broader vulnerability: as traditional banking protections strengthen, criminals exploit new channels and technologies.
The intersection between sales practices and scam prevention is significant. Elderly customers who trust their banks implicitly may be more vulnerable to products they don’t fully understand, whether sold by legitimate advisers under sales pressure or by criminals impersonating bank representatives.
Recent Enforcement: The Money Laundering Wake-Up
Singapore’s financial sector faced a different credibility test with the 2023 money laundering scandal involving S$3 billion in illicit assets. In July 2025, MAS imposed S$27.45 million in penalties on nine financial institutions—including UBS, Citibank, UOB, and Julius Baer—for poor implementation of anti-money laundering controls.
While not directly related to retail sales practices, this enforcement action highlighted that even Singapore’s sophisticated regulatory framework has implementation gaps. If major international banks failed to properly screen high-net-worth clients involved in organized crime, questions naturally arise about whether smaller-scale retail compliance receives sufficient institutional attention.
Looking Forward: Prevention Over Crisis Management
Singapore’s advantage over Canada is that it has built preventive infrastructure before facing a full-blown crisis. The December 2025 enhancements to vulnerable client protections, the ongoing refinement of the complex products framework, and MAS’s willingness to prohibit errant advisers demonstrate regulatory attentiveness.
However, the Canadian situation illustrates that regulatory frameworks alone may not be sufficient if the underlying business model incentivizes behavior that conflicts with customer welfare. Three areas deserve particular attention:
Structural Independence: Should Singapore consider requiring greater separation between retail banking services and investment advice, potentially through organizational boundaries that reduce cross-selling pressure?
Cultural Accountability: Are Singapore’s banks genuinely embedding customer-first cultures, or are they optimizing compliance while maintaining sales-driven environments? Regular mystery shopping should continue, with results prominently published.
Consumer Awareness: The closure of the CPF Special Account for those aged 55 and above has already triggered aggressive marketing of retirement products promising 6-12% yields. Regulators and consumer groups must ensure vulnerable customers aren’t pressured into unsuitable products during this transition.
The Verdict for Singapore Consumers
Singapore consumers, particularly elderly residents and those with limited financial literacy, should take comfort that they have substantially more regulatory protection than their Canadian counterparts. The combination of mandatory suitability assessments, supervisor callbacks for vulnerable customers, complex product classifications, and active enforcement creates meaningful safeguards.
However, protection is not prevention. Consumers should remain vigilant, verify that advisers properly identify them as vulnerable customers (if applicable), insist on written information about all products, ask about alternatives to recommended products, and use FIDReC if problems arise.
Financial institutions should recognize that Canada’s crisis represents a warning. CARP’s public campaign demonstrates that regulatory compliance alone won’t maintain public trust if customers feel systematically disadvantaged. The banks that will thrive long-term are those that view vulnerable customer protections not as compliance burdens but as opportunities to build genuine loyalty.
For MAS, the Canadian situation validates its proactive approach while highlighting that vigilance must be constant. As products evolve, distribution channels change, and new vulnerabilities emerge, the regulatory framework must adapt. The goal isn’t just protecting consumers from the most egregious abuses—it’s building a financial system where the default is genuinely suitable advice, and where deviations are exceptions rather than systematic patterns.
Singapore has built impressive infrastructure. The test is whether that infrastructure translates into genuine protection in every branch, in every conversation between adviser and customer, especially when that customer is elderly, less educated, or simply trusting their bank to act in their best interest.
That’s the standard CARP is demanding in Canada. It’s the standard Singapore’s customers deserve here.
For consumers experiencing problems with financial advisers, complaints can be filed with the financial institution directly, with copies sent to MAS. If unresolved after four weeks, FIDReC provides free mediation services. The MAS Register of Representatives allows verification of adviser credentials.