The Monetary Authority of Singapore (MAS) plans to introduce a centralized platform and regulatory framework that will enable financial institutions (FIs) to share relevant information to prevent money laundering and terrorism financing.

The new digital platform, named COSMIC, for “Collaborative Sharing of ML/TF Information & Cases”, will enable FIs to securely share information on customers or transactions, where they cross material risk thresholds. 

The COSMIC platform is a co-creation of the Singaporean financial overseer and six major commercial banks in Singapore – DBS, OCBC, UOB, Citibank, HSBC and Standard Chartered Bank. It will feature robust security features to prevent unauthorized access to information, and will be operated by the MAS. 

“COSMIC will significantly enhance our financial institutions’ ability to detect and curb suspicious activity, while minimizing the impact on legitimate actors. 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,” says Loo Siew Yee, MAS’ assistant managing director (policy, payments & financial crime).

A challenge FIs in many jurisdictions face is that they are unable to warn one another about abnormal activity in customers’ accounts. This disparity can be exploited by criminals to make illicit transactions through a network of entities with accounts in different FIs, such that each institution on its own does not have sufficient information to immediately detect these transactions.

The financial regulator plans to launch the new platform in the first half of 2023. Initially it will focus on three key financial crime risks in commercial banking, namely, abuse of shell companies, misuse of trade finance for illicit purposes, and proliferation financing which refers to the raising, moving or making available of financing, funds, assets or other economic resources to individuals or entities to support the proliferation of weapons of mass destruction, including the proliferation of their means of delivery or related materials.

The six banks involved in COSMIC’s development, which are leading players in commercial banking, will participate and be permitted to share information on the platform during the initial phase. MAS plans to progressively extend COSMIC’s coverage to more FIs and focus areas and make some aspects of sharing mandatory.

While some other countries have introduced arrangements for information sharing among FIs, the new platform will be the first centralized platform where information is shared in a structured format that allows for seamless integration with data analytics tools.