Alvin Tan on Financial Services and Markets (Amendment) Bill

Banks in Singapore will be able to fight financial crimes more easily under a new framework called Collaborative Sharing of Money Laundering/Terrorism Financing Information and Cases (COSMIC). Minister of State for Trade and Industry and Monetary Authority of Singapore (MAS) Board Member Alvin Tan outlined the key features on behalf of Senior Minister and Chairman of the MAS Tharman Shanmugaratnam in Parliament on Tuesday (May 9). Mr Tan said while financial institutions have made significant strides to strengthen their defences against financial crimes, they are currently unable to warn one another about unusual activity involving their customers, given customer confidentiality obligations. He pointed out that criminals exploit this by making illicit transactions through different financial institutions to avoid detection. To address this problem, MAS will use COSMIC to maintain a secure digital platform for financial institutions to share with one another information on customers who exhibit multiple red flags that may indicate potential financial crime concerns if stipulated thresholds are met. He said there will be robust legal and operational safeguards to protect the confidentiality of the information being shared and the interests of customers. MAS will ensure that COSMIC has robust controls, including cybersecurity measures such as data encryption and firewalls to block unauthorised external access. COSMIC will initially focus on three key risks which MAS and the Commercial Affairs Department have identified. These are the misuse of legal persons, trade-based money laundering, as well as the proliferation, financing and evasion of international sanctions. MAS plans to introduce COSMIC in phases, starting with the six major Singapore banks, such as DBS, OCBC and UOB. It plans to expand the coverage to more focus areas and financial institutions and make sharing mandatory in higher-risk circumstances. Mr Tan said MAS will closely monitor how participant financial institutions use the information from COSMIC. Mr Tan said by addressing the information-sharing gap, financial institutions and MAS will be able to respond quickly to potential financial crime activity. “This will strengthen Singapore's role and reputation as a safe, trusted and innovative global financial centre,” he said.