Singapore's upcoming 'first of its kind' AML data sharing network

A "first of its kind" AML data exchange platform for banks is about to go live in Singapore and will be operating as of next year.

Six major banks have already signed on with the authorities to participate in the exchange, which it claims to be the first of its sort in the entire world: DBS, OCBC, UOB, SCB, Citibank, and HSBC.

The system, which will be known as Cosmic (Collaborative Sharing of ML/TF Information & Cases), will let financial institutions securely exchange data on customers or transactions when those activities exceed certain thresholds of significant risk.

Banks will be permitted to share information on customers and transactions, according to the Monetary Authority of Singapore (MAS), to combat money laundering, terrorism financing, and proliferation finance.

According to the authority, information must be supplied in a structured format that enables easy integration with data analytics tools.

Cosmic's coverage will be expanded to include more financial institutions and focus areas, and some aspects of sharing will be made mandatory. Six institutions have already joined up.

In the beginning, Cosmic will concentrate on three major dangers of financial crime in commercial banking:

1. abuse of shell companies

2. misuse of trade finance for illicit purposes, and

3. proliferation financing.

Cosmic will be managed by the central bank, which also pledges to enact regulations to ensure that information sharing is only permitted to combat money laundering, terrorism financing, and proliferation finance.

"Cosmic will significantly enhance our financial institutions’ ability to detect and curb suspicious activity, while minimising the impact on legitimate actors," said Loo Siew Yee, assistant MD (policy, payments, and financial crime), of the MAS.

"The information sharing framework is designed to target serious criminal behaviours and allow FIs to more quickly detect the bad actors to purge and deter them."

By fLEXI tEAM