MAS to launch digital platform to help FIs fight money laundering

The Monetary Authority of Singapore (MAS) is set to introduce a digital platform that will enable financial institutions to share with one another tips to prevent financial crime.

According to MAS, the organisation will introduce the digital platform and enabling regulatory framework for FIs to share with one another relevant information on customers and transactions to prevent money laundering, terrorism financing and proliferation financing.

The new platform will be named COSMIC (Collborative Sharing of ML/TF Information and Cases) and will provide a safe space for organisations to share knowledge on customers or transactions when they cross risk thresholds. MAS claims that such information sharing will help FIs identify and disrupt illicit networks – subsequently helping to safeguard Singapore’s financial centre.

MAS added that COSMIC will have strong security features to prevent unauthorised access and its users will be required to implement robust measures to safeguard against unauthorised use from their end. The platform was co-created by MAS and six major banks in Singapore, including DBS, UOB, SCB, Citibank, OCBC and HSBC.

The COSMIC platform will also be the first centralised platform among FIs where information is shared in a structured format that enables seamless integration with data analytics tools. The platform’s regulatory framework will also clearly specify the kinds of information which can be shared, and the circumstances under which information sharing will be permitted or mandated.

MAS remarked, “A common challenge that FIs in most jurisdictions face is that they are unable to warn one another about unusual activity in customers’ accounts.  This gap is frequently exploited by financial criminals to make illicit transactions through a web of entities with accounts in different FIs, such that each FI on its own does not have sufficient information to detect these transactions in a timely manner.”

The platform is currently planned to be launched in the first half of 2023 and will initially focus on three key financial risks in commercial banking – abuse of shell companies, proliferation financing and misuse of trade finance for illicit purposed.

MAS assistant managing director for policy, payments and financial crime Loo Siew Yee said, “COSMIC will significantly enhance our financial institutions’ ability to detect and curb suspicious activity, while minimising the impact on legitimate actors. The information sharing framework is designed to target serious criminal behaviours and allow FIs to more quickly detect the bad actors to purge and deter them. It will strengthen Singapore’s position as a trusted financial centre and place to do business, where FIs can better serve the vast majority of legitimate customers.”

The authority is currently seeking feedback on the proposed legislative framework for COSMIC alongside the platform’s features. Interested parties have until the 1 November 2021 to submit their proposals and amendments.

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