Launching in H2 2024: Digital platform for banks to share data on fishy transactions

A DIGITAL platform for financial institutions to upload and share information on suspicious activities and entities is expected to launch in the second half of 2024.

Sharing of information between banks on the platform, known as Cosmic, will be voluntary in the initial phase of the launch, expected to last two years. Cosmic is short for Collaborative Sharing of ML/TF Information & Cases. 

After that, the Monetary Authority of Singapore (MAS) plans to make the sharing of information in higher-risk situations mandatory, said the central bank in a statement on Tuesday (May 9). 

This comes after the Bill to amend the Financial Services and Markets Act 2022 was read for a second time in Parliament by Minister of State for Trade and Industry Alvin Tan on Tuesday. The Bill seeks to amend the Act to permit the sharing of information between financial institutions, and to provide the legal framework for such sharing, said the minister.

Following the legislative amendments passed in Parliament on Tuesday, financial institutions will then be able to upload information onto the platform whenever they detect a “red flag” which may indicate criminal activity. 

This will enable Singapore to combat illicit financial activities, specifically to prevent and detect money laundering, terrorism financing and funding that enables the proliferation of weapons of mass destruction, MAS said.

Financial institutions will also be able to request, provide and alert other banks on such unusual activity through the platform, and be granted protection from civil suits arising out of such sharing. 

The minister added: “Specifically, they will be granted immunity from liability for any loss arising out of the disclosure on Cosmic or any act or omission in consequence of the disclosure, if the disclosure was done in accordance with the legal framework, with reasonable care and in good faith.” 

Cosmic will first be open to six major banks in Singapore: DBS, UOB, OCBC, Standard Chartered, Citibank and HSBC. These lenders have co-developed key features together with MAS.

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The central bank added that it would consider opening up the platform to more financial institutions and other related firms after the initial phase. 

MAS, the owner and operator of the Cosmic platform, will monitor how participant financial institutions use Cosmic information and ensure that proper safeguards are in place to keep the data secure. These include cybersecurity measures such encrypting data and internal and external audits by MAS, among other measures.

Participating financial institutions will also be required to adopt strong safeguards, such as allowing only a small group of financial institutions’ authorised officers to access Cosmic, said the minister in response to questions on data security fielded by members of parliament.

Banks which have been working with MAS on Cosmic have welcomed the initiative.

Dylan Lee, Citi Singapore’s country chief compliance officer, said: “Cosmic enables banks to collaborate within the regulatory framework. This engagement and collaboration will enable Citi to further its efforts to protect clients and the franchise from the risk of money laundering, as well as strengthen the industry as a whole.”

Lam Chee Kin, group head of legal and compliance at DBS, said the platform is an additional tool for bridging the information asymmetry among banks by facilitating information sharing in a “very controlled and targeted manner”.