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MAS to introduce new digital platform to fight money laundering

MAS to introduce new digital platform to fight money laundering

The logo of the Monetary Authority of Singapore is pictured at its building in Singapore, Feb 21, 2013. (File photo: Reuters/Edgar Su)

SINGAPORE: The Monetary Authority of Singapore (MAS) said on Friday (Oct 1) it would introduce a digital platform enabling banks to share information on customers and transactions, part of efforts to prevent money laundering and financing of criminal activity.

The platform is co-created by MAS and six major commercial banks - DBS Group, Oversea-Chinese Banking Corporation, United Overseas Bank, Standard Chartered Bank, Citibank and HSBC, MAS said in a statement.

MAS said that financial institutions face a common challenge of not being able to warn each other about unusual activity in customers' accounts.

"This gap is frequently exploited by financial criminals to make illicit transactions through a web of entities with accounts in different financial institutions, such that each financial institution on its own does not have sufficient information to detect these transactions in a timely manner," said MAS.

The new digital platform, named Collaborative Sharing of Money Laundering/Terrorism Financing Information and Cases (COSMIC), will enable financial institutions to securely share information on customers or transactions, where they cross "material risk thresholds".

"The information sharing framework is designed to target serious criminal behaviours and allow financial institutions to more quickly detect the bad actors to purge and deter them," said Ms Loo Siew Yee, MAS's assistant managing director for policy, payments and financial crime.

"It will strengthen Singapore’s position as a trusted financial centre and place to do business, where financial institutions can better serve the vast majority of legitimate customers."

'STRONG' SECURITY FEATURES

MAS said the digital platform, which will be operated by the authority, will have "strong security features" to prevent unauthorised access to information.

The authority will provide in legislation that information sharing by financial institutions is permitted only for the purpose of combating money laundering, terrorism financing and proliferation financing, said MAS.

All participants on the platform are also required to implement "robust measures" to safeguard against unauthorised use and disclosure of COSMIC information, it added.

"MAS will supervise financial institutions for compliance with these requirements and take action against errant institutions," it said.

"While some other countries have introduced arrangements for information sharing among financial institutions, the COSMIC platform will be the first centralised platform where information is shared in a structured format that allows for seamless integration with data analytics tools."

The platform's regulatory framework will specify the types of information to be shared, and the circumstances under which information sharing will be permitted or mandated, MAS added.

It will use the information from the platform in its risk surveillance to detect illicit networks operating in the financial system and target these activities for timely supervisory intervention, it said. 

MAS said it plans to launch the platform in the first half of 2023. The six banks involved in developing the platform will participate and be permitted to share information during the initial phase, MAS said. 

"MAS plans to progressively extend the platform's coverage to more financial institutions and focus areas and make some aspects of sharing mandatory," it added. 

Source: Reuters/CNA/ng

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