Building Sustainable CSP Practices in a High-Expectation Environment

The CSP sector has always been commercially competitive.

But in recent years, many firms have felt stronger pressure to compete through lower fees, bundled packages, and faster turnaround promises.

Pricing pressure itself isn’t unusual. What is worth reflecting on is the second-order effect it creates. When fees drop too far, it changes not just profitability, but how the work gets done, what gets prioritised, and whether the firm can still stand behind its decisions when questions arise later.

This is where the case of Public Prosecutor v Zheng Jia is worth paying attention to.

Not because CSPs and directors are the same thing, but because the underlying risk pattern is familiar: a model where responsibility exists on paper, while diligence becomes increasingly thin in practice.

In this case, the High Court described an arrangement that enabled a “high volume, low effort enterprise”, supported by what it called a “concerted dereliction” of reasonable diligence.

That phrasing is not just legal language. It is a business model warning.

The real issue is not low profit. It is weak defensibility.

Price competition usually starts from a simple idea:

“If we reduce the price, we can win the client.”

But the long-term cost does not show up as lower profits only. It shows up as:

• less time available per onboarding

• less patience to resolve inconsistencies

• less willingness to push back on clients who resist disclosure

• weaker internal documentation because everything is rushed

• more reliance on assumptions rather than recorded justification

Over time, this creates a fragile operating environment.

Not because people want to cut corners, but because the business model leaves them with limited choices.

This is why the language in PP v Zheng Jia is so striking. It wasn’t framed as a single lapse. It was framed as a systemic mode of operating.

The market signal matters more than the discount

Pricing goes beyond just a number. It can communicate what type of firm you are.

A low-fee package can unintentionally communicate:

• “We prioritise speed”

• “We don’t ask too much”

• “We won’t be difficult”

That may attract price-sensitive legitimate clients.

But it also shapes expectations across the market that scrutiny is optional, and that professional gatekeeping is negotiable.

This is why a price-led strategy can become dangerous.

Not because a lower price is wrong, but because low price without a defensible process turns the service into a soft entry point for misuse by illicit actors.

Accountability expectations are tightening

This is where an upcoming change becomes highly relevant.

Under the Corporate and Accounting Laws (Amendment) Bill, the maximum fine for breach of directors’ duties under section 157 of the Companies Act will increase from S$5,000 to S$20,000, with the option of imprisonment up to 12 months, and the Bill notes an implementation target from April 2026 onwards.

This shift matters beyond directors themselves.

Because it signals what the system is moving toward:

• Personal responsibility is being emphasised

• "Reasonable diligence” is no longer treated as a minor issue

• The cost of weak governance is increasing

As the enforcement baseline rises, professional service providers operating around companies (including CSPs) will feel the knock-on effect.

When problems happen, the questions tend to be sharper:

• Who enabled this structure?

• What did you rely on?

• What did you document?

• What did you choose not to challenge?

Low fees create expensive work (even when nothing goes wrong)

Even without enforcement outcomes, the lowest-fee model creates costs that rarely appear in a quotation.

It shows up as:

• escalation fatigue (everything becomes urgent, everything becomes a negotiation)

• operational burnout

• inconsistent service quality

• downstream friction when banks or counterparties ask for clarification

• client disputes over why documents were requested in the first place

A competitively priced firm may win more clients.

But it can lose consistency. And consistency is what makes a practice scalable.

What CSPs can do to stay sustainable

Here are practical moves CSPs can implement while remaining firmly a corporate services business.

1) Set a defensibility floor (your non-negotiables)

Not “extra work”, but the minimum steps your firm needs to confidently stand behind an onboarding decision.

If your pricing cannot sustain this floor, the issue is not staff performance. It is the business model.

2) Price by complexity, not by service label

Instead of one flat price for incorporation, adopt internal bands such as:

• straightforward

• complex ownership

• high scrutiny cases

This ensures the work is funded properly without needing to sell “compliance” as a product. Efforts are accounted for at the onset instead of having to negotiate for higher fees when problems arise.

3) Build a walk-away rule that protects your team

Price pressure creates commercial pressure. Commercial pressure weakens judgement.

A simple internal policy like: “If we cannot justify it cleanly, we do not proceed” prevents one weak onboarding from turning into years of exposure.

4) Compete on certainty, not cheapness

The strongest CSP value proposition is not low fees.

It is:

• clean execution

• predictable processes

• fewer disruptions later

That is how you build a book that is sustainable and saleable.

Closing thought

The lesson from PP v Zheng Jia is not “don’t take clients”.

It is that once the market normalises high-volume, low-effort models, the ecosystem becomes easier to exploit and harder to defend.

And with s157 penalties being strengthened, the environment is clearly moving toward tougher expectations on diligence and accountability.

In that context, the strongest CSPs won’t win by being the cheapest.

They’ll win by being the most consistent, explainable, and defensible.