‘Advanced Digital Platform ‘COSMIC’ Implemented to Strengthen Finance System Against Fraud and Terror Financing’

The Monetary Authority of Singapore (MAS) has recently introduced COSMIC, an innovative centralized digital platform designed to enhance the exchange of customer data among financial institutions (FIs) globally to combat money laundering (ML), terrorism financing (TF), and proliferation financing (PF). This move coincides with the implementation of the Financial Services and Markets (Amendment) Act 2023 and its accompanying subsidiary legislation, which provide the necessary legal framework and safeguards for data sharing within the financial sector.

Following a public consultation in October 2021, the Financial Services and Markets Act 2022 (FSMA) underwent revisions in May 2023 to lay the groundwork for COSMIC. The FSMA stipulates that a participating FI can only share customer information with another participant FI if specific suspicious indicators, or “red flags,” are triggered by the customer’s profile or behavior. Participant FIs are required to establish policies and operational measures to maintain the confidentiality of shared information, ensuring that information on potential criminal activities can be shared while safeguarding the interests of law-abiding customers. Customers are encouraged to promptly respond to FI inquiries regarding their risk profiles or transactions to facilitate informed risk assessments by FIs.

COSMIC was jointly developed by MAS and six major commercial banks in Singapore – DBS, OCBC, UOB, Citibank, HSBC, and Standard Chartered Bank, who will participate as FIs in the initial phase of the platform. Currently, information sharing on COSMIC is voluntary and focuses on three primary financial crime risks in commercial banking: the misuse of legal entities, trade finance for illicit purposes, and proliferation financing.

Ms. Loo Siew Yee, Assistant Managing Director (Policy, Payments & Financial Crime) at MAS, emphasized the significance of COSMIC in empowering FIs to promptly alert each other about suspicious activities and conduct more informed risk assessments. She highlighted that COSMIC complements the industry’s collaboration with MAS and law enforcement agencies in combating financial crime, ultimately enhancing Singapore’s ability to maintain its reputation as a well-regulated and trustworthy financial hub.