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MAS launches digital platform COSMIC to facilitate customer information sharing and combat financial crime
The COSMIC platform will enable participating financial institutions to share information when 'red flags' are noticed.
SINGAPORE — The Monetary Authority of Singapore (MAS) announced the launch of COSMIC, a centralised digital platform that facilitates the sharing of customer information among financial institutions to combat money laundering, terrorism financing and proliferation financing globally.
In a statement released Monday (1 April), MAS said that legislation that set out the legal basis and safeguards for such sharing, including the Financial Services and Markets Act 2023 and accompanying subsidiary legislation, commenced on the same day.
COSMIC, an acronym for 'COllaborative Sharing of Money Laundering/TF Information & Cases', was co-developed by MAS and six major commercial banks in Singapore: DBS, OCBC, UOB, Citibank, HSBC, and Standard Chartered Bank.
These banks will be the participating financial institutions using the COSMIC platform during its initial phase, according to MAS.
"COSMIC will enable financial institutions 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," said Loo Siew Yee, Assistant Managing Director (Policy, Payments & Financial Crime) at MAS.
Loo added that the system will strengthen Singapore’s capabilities to uphold its reputation as a well-regulated and trusted financial centre.
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How does COSMIC work?
Following amendments to the Financial Services and Markets Act 2022 (FSMA) in May 2023, which set out the legislative framework for the COSMIC platform, a participating financial institution may share customer information with another participating financial institution only if the customer's profile or behaviour displays "certain objectively-defined indicators of suspicion" or "red flags".
MAS said that the FSMA requires participant financial institutions to have policies and operational safeguards in place to protect the confidentiality of information shared, thus allowing financial institutions to share information on potentially criminal behaviour while safeguarding the interests of the vast majority of customers who are legitimate.
The regulators also encouraged customers to provide timely responses if requested by a participant financial institution to provide clarifications on their risk profiles or transactions to allow institutions to make informed risk assessments.
Information sharing among the participating financial institutions is currently voluntary and focused on three key financial crime risks in commercial banking, namely the misuse of legal persons, the misuse of trade finance for illicit purposes, as well as proliferation financing.
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