Sunday, September 23, 2012

Financial Institutions in Singapore Are Strange

Here are a few things I don't like about financial institutions in Singapore:

1. They insist on seeing a passport instead of the Singaporean government's own photo ID card (which every resident must have and which is valid for all sorts of official purposes). Do they really think that a passport issued by, for example, the Tanzanian government is more authoritative in Singapore than Singaporean government-issued ID? It's bizarre.

2. They ask for your "overseas address" if you're not a Singaporean. I live in Singapore, 100% of the time. I neither own nor rent any real estate outside Singapore, nor does my wife. Why should we? We live in Singapore. And when I point out that simple fact, they still ask for an overseas address. I gave one bank the address of the civil records office where my birth certificate is kept, and I explained what I was doing. They didn't like that, but what exactly am I supposed to do? Would they prefer the address of a Holiday Inn overseas? Or the address where my second cousin-in-law lives?

3. One bank -- and there may be others -- simply refuses to issue a credit card to anyone who is not a Singaporean citizen or permanent resident. You could show up with impeccable credit (like mine), and it simply wouldn't matter. Those are the rules, and in Singapore we follow the rules. I should point out that this particular bank isn't even headquartered in Singapore, so it can't even issue a credit card to its own country's prime minister. But did I mention the rules?

4. Using a Singaporean credit or debit card outside Singapore is expensive -- 2.5% or higher markup -- with the possible exception of a Diners Club card issued in Singapore. Singapore is tiny, so practically every Singaporean travels outside Singapore. You can take a city bus or taxi to Malaysia or a quick ferry to Indonesia, after all. It's actually cheaper for me to use, say, a U.S. credit card and move funds from Singapore to the U.S. to pay the credit card bill. And, with at least one bank, it's cheaper to withdraw cash at an ATM outside Singapore and spend that instead of using a credit card issued by the same bank. Crazy isn't it?

5. Speaking of foreign transaction fees, shame on the Monetary Authority of Singapore (MAS) for not mandating much more clear disclosures about such fees. I found one bank that simply doesn't disclose such fees even in their fine print unless you specifically ask a bank employee. And then is that information accurate?

6. It's extremely expensive to invest in mutual funds, stocks, bonds, etc. in Singapore. Management fees are both poorly disclosed and ridiculous -- 2% per annum is on the low side. Trading fees are also ridiculous. Again, it's far cheaper to move money to, say, the U.S. and to buy financial investments there. A company like The Vanguard Group could do extremely well in the retail investment market in Singapore.

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