During a recent debate in the Singapore Parliament on ways to enhance the country’s standing as a financial hub, Member of Parliament for West Coast GRC, Ho Geok Choo, voiced concerns about the way banks target customers with deposits of a certain size for structured products.

"In the case of structured deposits or investment products, customers are not made aware of the many and often substantial hidden costs in these products,” she said according to various reports in the Asian financial press. “While they're promised protection of their principal sums, many of the management controls of these products are often deducted upfront so in cases where the returns on these products are minimal, depositors may actually lose part of their principal.”

Banks must have greater transparency by advising their customers of the hidden costs of these products, the MP went on to say. “A related area of concern is the way banks target specific customers with deposits of a certain size; this clearly violates the privacy of the customer. Banks have obviously made use of privileged customer information to target their customers for cross-selling. Do customers have any safeguards to protect their information?"

It’s a valid point and one that the Monetary Authority of Singapore (MAS) responded to. According to the financial regulator strict rules on cross-selling by banks under the Financial Advisor Act are already in place.

That may be the case, but isn’t it worrying for the country’s structured products professionals that their industry is being debated at such a high level?

As I’ve said in previous editorials - regulatory, or indeed parliamentary, probes show one thing: the industry should come together take proactive, rather than reactive, steps to explain itself, and protect itself.