New digital platform allows banks to share info on suspicious clients

Move will help global fight against money laundering, terrorism financing, says MAS

- Samuel Devaraj and Andrew Wong

A centralised digital platform that enables banks to voluntarily share information with one another about suspicious customers was launched on April 1.

The Monetary Authority of Singapore (MAS) said in a press release that the intent of Cosmic, which stands for Collaborative Sharing of Money Laundering/ Terrorism Financing Information and Cases, is to aid the global fight against money laundering, terrorism financing and proliferation financing, which includes the financing of weapons of mass destruction.

Announced in 2021, Cosmic was co-developed by MAS and six banks DBS Bank, OCBC Bank, UOB, Citibank, HSBC and Standard Chartered Bank. They will be the ones to use the platform initially.

MAS said the sharing of information on Cosmic focuses on three key financial crime risks in commercial banking: abuse of shell companies; misuse of trade finance for illicit purposes; and financing that supports the proliferation of weapons of mass destruction.

It said legislation that set out the legal basis and safeguards for such sharing also came into effect on April 1.

The Financial Services and Markets Act 2022 was amended in Parliament in May 2023 to set out the legislative framework for Cosmic.

MAS said the banks on Cosmic can share customer information with one another only if the customer's profile or behaviour displays red flags.

It added that the amended Act requires the banks to have safeguards to protect the confidentiality of information shared.

MAS said this will allow banks to share information on potential criminal behaviour while protecting the interests of most customers who are legitimate.

It added that customers are encouraged to provide timely responses if requested by the banks to clarify their risk profiles or transactions, so that the banks can make informed risk assessments.