MAS to Introduce Digital Platform to Prevent Frauds in Banking Sector
The Monetary Authority of Singapore (MAS) announced plans to launch, in the first half of 2023, the COSMIC platform to facilitate prevention of money laundering, terrorism financing (ML/TF), and proliferation financing. The platform will enable financial institutions to securely share with each other the relevant information on customers and transactions, where they cross material risk thresholds. The COSMIC platform will initially focus on three key financial crime risks in commercial banking: abuse of shell companies, misuse of trade finance for illicit purposes, and proliferation financing. MAS seeks feedback on the proposed legislative framework and the features for COSMIC by November 01, 2021.
While some other countries have introduced arrangements for information-sharing among financial institutions, the COSMIC platform will be the first centralized platform where information is shared in a structured format that allows for seamless integration with data analytics tools. This will help financial institutions collaborate productively and at scale. The COSMIC platform is the co-creation of MAS and six major commercial banks in Singapore—namely, DBS, OCBC, UOB, SCB, Citibank, and HSBC. The platform will have strong security features to prevent unauthorized access to information and will be operated by MAS. The six banks will participate and be permitted to share information in COSMIC during this initial phase. MAS plans to progressively extend coverage to more financial institutions and focus areas and to make some aspects of sharing mandatory.
The regulatory framework for COSMIC will specify the types of information to be shared and the circumstances under which information-sharing will be permitted or mandated. MAS will provide in legislation that this information-sharing by financial institutions is permitted only for the purpose of combating money laundering, terrorist financing, and proliferation financing. MAS will also require all COSMIC participants to implement robust measures to safeguard against unauthorized use and disclosure of COSMIC information. MAS will supervise financial institutions for compliance with these requirements and take action against errant financial institutions. MAS will use the information from COSMIC in its risk surveillance to detect illicit networks operating in the financial system and to target these activities for timely supervisory intervention.
Keywords: Asia Pacific, Singapore, Banking, ML/TF, Proliferation Financing, Fintech, COSMIC, AML/CFT, Regtech, Digital Platform, MAS
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