To strengthen fortification against money laundering and terrorism financing, the Monetary Authority of Singapore (MAS) has launched its first centralized digital platform to facilitate the sharing of customer information among financial institutions (FIs).

An accompanying legislation, The Financial Services and Markets (Amendment) Act 2023 (FSMA), had earlier been released, setting out the legal basis and safeguards for such information sharing.

Named “Cosmic” (COllaborative Sharing of Money Laundering/TF Information & Cases), the platform was co-developed by MAS and six major commercial banks in Singapore – DBS, OCBC, UOB, Citibank, HSBC, and Standard Chartered Bank. These banks will also be Cosmic’s participant FIs during its initial phase of implementation.

Information sharing is currently voluntary and focused on three key financial crime risks in commercial banking, namely: misuse of legal persons; misuse of trade finance for illicit purposes; and proliferation financing, of funding to support the proliferation of weapons of mass destruction.

Following a public consultation from October 2021, the FSMA Act 2022 was amended in May 2023 to establish the legislative framework for the centralized digital platform.

A Cosmic participant FI may share customer information with another participant FI only if the customer’s profile or behaviour displays certain objectively defined indicators of suspicion, or “red flags”.

Safeguard customer interests

The FSMA requires participant FIs to have in place policies and operational safeguards to protect the confidentiality of information shared. This will allow participant FIs to share information on potential criminal behaviour while safeguarding the interests of the vast majority of customers who are legitimate.

Customers are encouraged to continue to provide timely responses if requested by FIs to provide clarifications on their risk profiles or transactions so that FIs can make informed risk assessments.

“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,” says Loo Siew Yee, assistant managing director (policy, payments and financial crime) at MAS.

“This will strengthen Singapore’s capabilities to uphold our reputation as a well-regulated and trusted financial centre,” Loo adds.

In August 2023 Singapore police arrested 10 foreigners in a pre-dawn anti-money laundering sweep that authorities described as unprecedented in size and scope.

Initial reports stated that up to S$1 billion (US$740 million) worth of assets had been seized from the suspects, including prestige car marques, properties, rare and luxury watches, cryptocurrencies, luxury handbags, gold ingots, and cash.

The latest estimate of the value of the seized assets has been raised to more than S$3 billion (US$2.22 billion), as of February 2024.