Singapore digital platform to fight money laundering, terrorism financing

Anti-money laundering platform Singapore

Singapore will launch a new digital platform to increase financial information sharing and act as an early warning system to help fight money laundering and financing of terrorism and weapons of mass destruction.

The Monetary Authority of Singapore (MAS) said the platform and accompanying regulations will allow financial institutions to securely share relevant information on customers and transactions to prevent and disrupt illicit financing.

The COSMIC digital platform, which stands for “Collaborative Sharing of ML/TF Information & Cases”, is co-created by MAS and six major commercial banks in Singapore – DBS, OCBC, UOB, SCB, Citibank and HSBC. It will be launched in the first half of 2023.

The MAS said a key challenge for financial institutions in most jurisdictions is the inability to warn one another about unusual activity in customer accounts. That gap is then exploited by financial criminals because they can carry out a range of transactions through different institutions, and each one does not have enough information alone to detect illicit banking activity.

Information sharing through the secure COSMIC platform, to be operated by the MAS, will enable institutions to share specific information on transactions that cross material risk thresholds.

MAS said COSMIC will be the first centralised platform where information is shared in a structured format that allows for seamless integration with data analytics tools. It will enable more productive collaboration between financial institutions at scale, but only specific information pertaining to possible illicit transactions will be shared.

COSMIC participants will have to implement robust safeguards against unauthorised disclosure of information. The initial phase will involve the six major commercial banks in Singapore, but will expand to other financial institutions at a later stage.

The initial focus of the platform will be on three key financial crime risks in commercial banking – abuse of shell companies, misuse of trade finance for illicit purposes, and proliferation financing – funding that supports the proliferation of weapons of mass destruction.

Loo Siew Yee, MAS Assistant Managing Director (Policy, Payments & Financial Crime), said COSMIC will significantly boost institutional ability to detect and curb suspicious transactions, while minimising any impact on legitimate banking activity.

“The information-sharing framework is designed to target serious criminal behaviours and allow financial institutions to more quickly detect the bad actors to purge and deter them,” she said in a statement.

“It will strengthen Singapore’s position as a trusted financial centre and place to do business, where financial institutions can better serve the vast majority of legitimate customers.”