SINGAPORE: On April 1, the Monetary Authority of Singapore, MAS, launched a new digital platform, COSMIC, marking a significant stride in the ongoing battle against financial crimes such as money laundering, terrorism financing, and proliferation financing.
Named COSMIC, short for Collaborative Sharing of Money Laundering/Terrorism Financing Information and Cases, the platform serves as a centralised financial platform where banks can voluntarily exchange crucial information about suspicious customers.
Developed as a joint effort between the Monetary Authority of Singapore (MAS) and six leading banks—DBS Bank, OCBC Bank, UOB, Citibank, HSBC, and Standard Chartered Bank—COSMIC is set to revolutionise information sharing in the banking sector. Initially, these six banks will be the primary users of the platform.
COSMIC’s primary focus revolves around three key financial crime risks prevalent in commercial banking: the misuse of legal persons, illicit use of trade finance, and proliferation financing.
According to Ms Loo Siew Yee, MAS assistant managing director:
“COSMIC will enable FIs to warn each other of suspicious activities and make more informed risk assessments on a timely basis.
It complements the industry’s existing close collaboration with MAS and law enforcement authorities to combat financial crime. This will strengthen Singapore’s capabilities to uphold our reputation as a well-regulated and trusted financial centre.”
The Straits Times reports that to support this initiative, legislative frameworks were put into effect on the same day, providing a legal basis and necessary safeguards for the sharing of sensitive customer information.
Under the amended Financial Services and Markets Act 2022, banks are empowered to share customer data on COSMIC if any red flags indicating potential criminal behaviour are detected.
However, stringent measures are in place to uphold customer confidentiality and protect the interests of legitimate clients.
MAS emphasised the importance of timely responses from customers when banks request clarification regarding their transactions or risk profiles.
Such cooperation enables banks to conduct informed risk assessments and enhances the platform’s effectiveness in identifying and combating financial crimes.
Despite the voluntary nature of information sharing on COSMIC, MAS hinted at plans to make certain aspects of sharing mandatory in the future.
However, for now, the voluntary phase allows stakeholders to address operational concerns and make necessary adjustments for smoother integration.
The announcement received positive feedback from industry players, with banks expressing support for the initiative.
Mr Jeffrey Lee, DBS’ Group Head of Financial Crime and Security Services, likened the collaboration to neighbours warning each other about potential threats, stressing financial institutions’ collective responsibility to safeguard the financial system’s integrity.
He said, “If your neighbour’s house was burgled, in addition to telling the police, wouldn’t you want them to warn you as well?”
Ms Loretta Yuen, Head of Group Legal and Compliance at OCBC, reiterated the importance of data protection while assuring that information would only be shared if red flags were identified.
Similarly, Mr Daniel Ng, head of group compliance at UOB, highlighted that COSMIC will make “information-sharing to take place on a larger scale” compared to existing frameworks like the Anti-Money Laundering(AML)/Countering the Financing of Terrorism(CFT) Industry Partnership(ACIP).
The launching of COSMIC follows Singapore’s largest money laundering case in 2023, where S$3 billion in assets were seized.
Although unrelated to the case, the development of COSMIC underscores Singapore’s proactive stance against financial crimes.
Legal experts and industry insiders believe that if COSMIC had been in place earlier, investigations could have been expedited and potentially deter criminal activities.
“This innovative initiative is testament to the country’s leadership and commitment to protecting the integrity of the financial system and will strengthen Singapore’s position as a trusted international financial centre,” Mr Shane Godwin, head of financial crime at HSBC Singapore, said. /TISG