Post by Sapphire Capital on Aug 5, 2022 23:11:21 GMT 4
MAS to roll out platform requiring information-sharing among banks in 2023 to fight money laundering
TO purge crooks who are moving dirty money through Singapore's financial institutions, the Republic's central bank is introducing a digital platform that will require financial institutions to securely share information on suspicious customers or transactions.
Dubbed Cosmic (Collaborative Sharing of Money Laundering and Terrorism Financing Information and Cases), the new platform - to be rolled out from H1 2023 - will focus on three key financial crime risks in commercial banking, including the abuse of shell companies, trade-based money laundering, as well as proliferation financing, the Monetary Authority of Singapore (MAS) announced on Friday.
Cosmic's proposed legislative framework, as well as the platform's features, will be set out in the new Financial Services and Markets Act. This move will also see regulators make legislative changes to lift banking secrecy.
Jurisdictions like the US and UK have safe-harbour provisions that allow financial institutions to share information. These refer to legal provisions to reduce or eliminate legal liability in certain situations.
Singapore's Banking Act currently mandates that regulated financial institutions and their officers uphold confidentiality when handling customer information.
Currently, financial institutions in Singapore can share information through law enforcement authorities on a case-by-case basis.
With Cosmic, a bank that observes multiple red flags in customers' behaviours may request information from other financial institutions to assess its unusual observations. The bank should then inform its peer institutions - with links to higher-risk activities - about these red flags. The bank should also then alert other financial institutions of suspicious bad actors using a watchlist.
Information sharing via Cosmic will not be mandated in the initial roll out, but will be mandated in subsequent phases, the MAS said in a consultation paper released on Friday. Financial institutions that breach these requirements may be subject to penalties; whereas those that disclose risk information to their counterparts without first satisfying the platform's requirements may also be penalised.
Certain thresholds are built into the platform to prevent frivolous requests or "fishing expeditions".
Where suspicious actors are observed to be operating across financial institutions, the Cosmic platform will automatically escalate such information to the MAS.
In a statement on Friday, MAS 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 analytic tools. This will help financial institutions collaborate productively and at scale."
The platform will be co-created by the MAS and six major commercial banks in Singapore, including DBS, OCBC, UOB, Standard Chartered, Citibank and HSBC. It is expected to be rolled out to these six banks from H1 2023, before other financial institutions are given access in later phases. New risk areas could also be incorporated at a later stage.
TO purge crooks who are moving dirty money through Singapore's financial institutions, the Republic's central bank is introducing a digital platform that will require financial institutions to securely share information on suspicious customers or transactions.
Dubbed Cosmic (Collaborative Sharing of Money Laundering and Terrorism Financing Information and Cases), the new platform - to be rolled out from H1 2023 - will focus on three key financial crime risks in commercial banking, including the abuse of shell companies, trade-based money laundering, as well as proliferation financing, the Monetary Authority of Singapore (MAS) announced on Friday.
Cosmic's proposed legislative framework, as well as the platform's features, will be set out in the new Financial Services and Markets Act. This move will also see regulators make legislative changes to lift banking secrecy.
Jurisdictions like the US and UK have safe-harbour provisions that allow financial institutions to share information. These refer to legal provisions to reduce or eliminate legal liability in certain situations.
Singapore's Banking Act currently mandates that regulated financial institutions and their officers uphold confidentiality when handling customer information.
Currently, financial institutions in Singapore can share information through law enforcement authorities on a case-by-case basis.
With Cosmic, a bank that observes multiple red flags in customers' behaviours may request information from other financial institutions to assess its unusual observations. The bank should then inform its peer institutions - with links to higher-risk activities - about these red flags. The bank should also then alert other financial institutions of suspicious bad actors using a watchlist.
Information sharing via Cosmic will not be mandated in the initial roll out, but will be mandated in subsequent phases, the MAS said in a consultation paper released on Friday. Financial institutions that breach these requirements may be subject to penalties; whereas those that disclose risk information to their counterparts without first satisfying the platform's requirements may also be penalised.
Certain thresholds are built into the platform to prevent frivolous requests or "fishing expeditions".
Where suspicious actors are observed to be operating across financial institutions, the Cosmic platform will automatically escalate such information to the MAS.
In a statement on Friday, MAS 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 analytic tools. This will help financial institutions collaborate productively and at scale."
The platform will be co-created by the MAS and six major commercial banks in Singapore, including DBS, OCBC, UOB, Standard Chartered, Citibank and HSBC. It is expected to be rolled out to these six banks from H1 2023, before other financial institutions are given access in later phases. New risk areas could also be incorporated at a later stage.
