The Monetary Authority of Singapore (MAS) has launched COSMIC, a centralised digital platform to allow sharing of customer information to combat several types of fraud.
MAS has introduced COSMIC to globally combat money laundering (ML), terrorism financing (TF) and proliferation financing (PF) through the sharing of customer information among financial institutions (FIs).
Loo Siew Yee, Assistant Managing Director of Policy, Payments & Financial Crime at MAS, said: “COSMIC will enable FIs to warn each other of suspicious activities and make more informed risk assessments on a timely basis.”
The platform was developed by MAS alongside six prominent commercial banks in Singapore, including DBS, OCBC, UOB, Citibank, HSBC and Standard Chartered Bank. These banks will serve as the first participant FIs on COSMIC during its initial phase.
Currently, information sharing is voluntary and centres around three primary financial crime risks within commercial banking, the abuse of legal entities, the exploitation of trade finance for unlawful activities and the facilitation of proliferation financing.
The Financial Services and Markets (Amendment) Act (FSMA) 2023, along with its related subsidiary legislation, providing the legal framework and necessary safeguards for such information sharing, came into effect on the same day as the platform launched
The amendments to the Act came after a period of public consultation in October 2021, and were enacted in May 2023 to establish the legislative framework governing COSMIC.
The rules state that a COSMIC participant FI can only share customer information with another participant FI if the customer’s profile or behaviour shows specific objectively-defined indicators of suspicion, commonly referred to as “red flags.”
Additionally, the FSMA requires that participant FIs must have in place policies and operational safeguards to protect the confidentiality of shared information, allowing FIs to exchange data on potential criminal behaviour while safeguarding the interests of the majority of legitimate customers.
In terms of customers, they are encouraged to respond as fast as possible if requested by FIs to provide clarifications regarding their risk profiles or transactions, ensuring institutions can conduct informed risk assessments.
Yee added: “It (COSMIC) complements the industry’s existing close collaboration with MAS and law enforcement authorities to combat financial crime. This will strengthen Singapore’s capabilities to uphold our reputation as a well-regulated and trusted financial centre.”
Fraud prevention has been a focus for many payment giants so far this year. Visa, for example, added three new AI-powered risk and fraud prevention solutions to its services business as part of its end-to-end Visa Protect suite.
