The COSMIC platform (“COllaborative Sharing of Money Laundering /TF Information & Cases”) was developed as a centralised digital tool that is expected to facilitate sharing of customer information among financial institutions. The aim of this process is to detect and combat money laundering (ML), terrorism financing (TF), and proliferation financing (PF) for clients and enterprises across the globe.
The Financial Services and Markets (Amendment) Act 2023 and the accompanying subsidiary legislation were designed to set out the legal basis and safeguard the process of sharing data between FI. The two initiatives also commenced on the same day of the product launch. The Financial Services and Markets Act 2022 (FSMA) was amended in 2023 in order to set out the legislative framework of COSMIC.
Throughout this launch, a COSMIC participant FI will be enabled to share customer data with another participant only if the client’s profile or behavior displays a certain objectively defined set of indicators of suspicions. The FSMA will require participant financial institutions to have policies in place, while also operational safeguarding in order to protect the confidentiality of the shared data.
The process will allow financial institutions to share information on potential criminal behavior while also safeguarding the interest of the vast majority of clients that are legitimate. At the same time, customers are encouraged to continue to offer timely responses if requested by banks and FIs, in order to provide clarification on their risk profiles or payments, so that the enterprises can make informed risk assessments.
The COSMIC platform is expected to give financial institutions the possibility to warn each other of any suspicious activities, while also meeting the needs, preferences, and demands of customers in an ever-evolving market. The launch is set to also strengthen Singapore’s capabilities to remain a well-guarded and trusted financial center.
COSMIC was developed by the Monetary Authority of Singapore and six other major commercial banks in the region, including DBS, OCBC, UOB, Citibank, HSBC, and Standard Chartered Bank. The financial institutions are expected to be the participant banks on COSMIC during its initial phase. As information sharing is currently voluntary, the process will also focus on three key financial crime risks in the commercial banking sector. This includes misuse of legal persons, proliferation financing, and misuse of trade finance for illicit purposes.
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