MAS proposes digital platform to help banks easily detect financial crime

It will detect customers who exhibit multiple “red flags” linked to financial crime. 

Singapore’s central bank said it proposes to launch a secure digital platform that will act as a guide for banks and financial institutions about information on customers who may potentially indicate financial crime concerns, if stipulated thresholds are met.

During the second reading speech for the Financial Services and Markets Bill, Alvin Tan, a board member of Monetary Authority of Singapore (MAS), said the platform will be named Collaborative Sharing of ML/TF Information & Cases or COSMIC. He was speaking on behalf of Tharman Shanmugaratnam, senior minister and minister-in-charge of the MAS.

The bill amends the Financial Services and Markets Act 2022 to allow sharing of information and provides the legal framework for it. 

Tan, moreover, said it will “set out when and how such sharing of risk information relating to the customer may take place.“

“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,” said Tan.

The first phase of its launch will make COSMIC accessible to six major Singapore banks, namely, DBS, OCBC, UOB, SCB, Citibank, and HSBC, which are already co-developing the platform with MAS. During this phase, the sharing of information between MAS and these six banks will be voluntary.  

“This allows the COSMIC platform to achieve operational stability, and enables MAS to closely engage participant financial institutions to calibrate COSMIC’s features and address operational concern,” said Tan.

Overview 

Sharing information on the platform will help financial institutions to understand their customers’ risk profile and detect suspicious behavior, said Tan.

It will focus on three risk areas: i.) the misuse of legal persons (such as shell companies), ii.) trade-based money laundering, and iii.) proliferation financing and evasion of international sanctions. 

These are areas where information-sharing between FIs is the most beneficial and are the top list of risks in the Lion City. 

FIs are required to file a suspicious transaction report with the Singapore Police Force's Suspicious Transactions Reporting Office if they find that the customer is handling proceeds of a crime.