Singapore Launches P2P Platform for Banks to Share Money Laundering Suspicions

Singapore has unveiled its ground breaking Private to Private (P2P) platform designed for banks to collaborate on sharing suspicions of money laundering. The platform, dubbed COSMIC (Collaborative Sharing of Money Laundering /TF Information & Cases), stands as the first centralized digital AML/CFT platform aiming to facilitate the exchange of customer information among financial institutions (FIs).

COSMIC allows banks to share customer information with other participating FIs only if certain predefined indicators of suspicion, or red flags, are observed in the customer's profile or behavior. This initiative, co-developed by the Monetary Authority of Singapore (MAS) and six major commercial banks in Singapore including DBS, OCBC, UOB, Citibank, HSBC, and Standard Chartered Bank, marks a significant step forward in combating financial crime.

Information sharing on COSMIC is currently voluntary and targets three key financial crime risks prevalent in commercial banking: the misuse of legal persons, the misuse of trade finance for illicit purposes, and proliferation financing. However, strict policies and operational safeguards must be in place within each bank to ensure the confidentiality of shared information, thereby protecting the interests of legitimate customers.

The enactment of the Financial Services and Markets (Amendment) Act 2023, along with accompanying subsidiary legislation, on April 1 provides the legal foundation and safeguards for information sharing through platforms like COSMIC. Loo Siew Yee, Assistant Managing Director (Policy, Payments & Financial Crime) at MAS, expressed optimism about COSMIC's potential impact, stating, "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."

Yee further emphasized that COSMIC's implementation strengthens Singapore's capabilities as a well-regulated and trusted financial center. The legislative framework for COSMIC was established following amendments to the Financial Services and Markets Act 2022 (FSMA) in May 2023, following public consultation.

Customers are encouraged to promptly respond to requests from FIs for clarifications on their risk profiles or transactions. This proactive engagement enables FIs to conduct informed risk assessments and contributes to the overall effectiveness of measures aimed at combating financial crime.

The launch of COSMIC underscores Singapore's commitment to staying ahead in the fight against financial crime while maintaining its reputation as a global financial hub. With robust legal frameworks and collaborative initiatives like COSMIC, Singapore aims to enhance transparency, integrity, and trust within its financial sector, thereby safeguarding the interests of both customers and stakeholders alike.

By fLEXI tEAM