Singapore’s financial sector is stepping up its game in the fight against financial crime with the launch of a groundbreaking initiative. The Monetary Authority of Singapore (MAS) and six major banks, including DBS, UOB, Standard Chartered, Citibank, and HSBC, have joined forces to create COSMIC, a common data platform aimed at enhancing the exchange of insights on potential financial crime activities.
COSMIC, which stands for the Collaborative Scheme for Monitoring and Sharing Information on Customers, will enable participating financial institutions to share customer information carrying “red flags” that indicate possible financial crime, such as money laundering and terrorism financing. MAS emphasized that the data sharing will only occur when a customer’s profile or behavior triggers “certain objectively-defined indicators of suspicion.”
The initiative addresses a critical need in the financial industry, where confidentiality requirements often prevent institutions from alerting each other about unusual activities involving their customers. By providing a secure platform for data sharing, COSMIC aims to plug these gaps and strengthen the industry’s ability to detect and prevent financial crime.
The launch of COSMIC follows Singapore’s proposal of amendments to its Financial Services and Markets Bill in May 2023. These amendments, which have now come into effect, facilitate the sharing of data among financial institutions and establish the legal framework for COSMIC. The bill also sets out policies and operational guidelines to ensure the confidentiality of shared data.
MAS highlighted that COSMIC will enable financial institutions to share information on potential criminal behavior while protecting the interests of legitimate customers. Customers are encouraged to cooperate with financial institutions by providing timely responses if requested to clarify their risk profiles or transactions. This cooperation will enable financial institutions to make informed risk assessments and enhance the overall effectiveness of COSMIC in combating financial crime.
(Source: Morning Star | Regulation Asia | The Edge Singapore)
