According to the law passed in parliament on Tuesday, the central bank of Singapore plans to introduce a safe digital platform that would serve as a manual for banks and other financial institutions about data on clients who might potentially suggest financial crime issues. The platform would be called Collaborative Sharing of Money Laundering/Terrorism Financing Information & Cases or COSMIC, according to Alvin Tan, a board member of the Monetary Authority of Singapore (MAS), who spoke during the second reading address for the Financial Services and Markets Bill.
Six major Singaporean banks, DBS, OCBC, UOB, SCB, Citibank, and HSBC, which are already co-developing the platform with MAS, will have access to COSMIC in the first phase of its introduction. Information exchange between MAS and these six banks will be optional all through this period.
Reflecting on the bill made, Tan stated, “The bill also sets out robust legal and operational safeguards to protect the confidentiality of the information being shared, and the interests of legitimate customers.” By adding the necessary legislative provisions, the bill modifies the Financial Services and Markets Act 2022 to permit information exchange. Additionally, Tan stated that it will “set out when and how such sharing of risk information relating to the Customer may take place.”
Banks and other institutions are already obliged to send suspicious transaction reports to police authorities in numerous financial hubs across the world, similar to how reports are reported to the Suspicious Transactions Reporting Office of the Singapore Police Force. However, such information, which is often regarded as extremely sensitive and confidential, is still off-limits to third parties in the majority of nations.
Financial institutions will be able to communicate information about consumers who exhibit several warning signs that might possibly point to financial criminal activities thanks to COSMIC, which could be live as early as the second half of 2024. The MAS claimed that the platform would also make it simpler for financial institutions to identify and discourage illicit activities.
The platform will concentrate on three primary risk areas which includes the employment of legitimate individuals for illegal purposes, trade-based money laundering, and proliferation financing and international sanctions evasion. These particular domains have been identified for reaping the greatest benefits from an information-sharing platform by the MAS and the Commercial Affairs Departments (CAD). The MAS claims that they “are also high on Singapore’s priority list of risks, as identified through our continued risk surveillance.”
Legal measures that allow financial institutions to share information for the purpose of identifying suspected financial crimes already exist in certain nations, including the United States and the United Kingdom. It was reported in the beginning of April that Singapore is actively working to set regulations in the crypto sector as a reaction to the collapses that took place in the US. Such regulations shall give stability to the economy as well as invite new investments into the country, therefore paving a prosperous future for the region.