June 9, 2023

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A knowledge platform is being constructed to permit banks working in Singapore to share intelligence on clients who’re doubtlessly concerned in legal actions. 

The transfer is a part of the nation’s efforts to bolster its defenses in opposition to monetary crimes, together with cash laundering, terrorism funding, and financing of weapons of mass destruction, in accordance with the Financial Authority of Singapore (MAS). 

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Dubbed COSMIC, the info platform is presently being collectively developed with six main banks, together with DBS, UOB, Normal Chartered, Citibank, and HSBC. 

It is going to plug present gaps the place, as a result of confidentiality necessities, monetary establishments are unable to alert one another about uncommon actions involving their clients. This hole allows criminals to hold out illicit transactions by totally different monetary establishments to keep away from detection, mentioned Singapore’s Minister of State for Commerce and Trade Alvin Tan, who is also a MAS board member. 

His feedback had been made Tuesday in the course of the second studying of the Monetary Providers and Markets (Modification) Invoice in parliament. The proposed amendments to the Invoice will allow the sharing of data and set up the authorized framework to facilitate data change through the info platform. 

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Tan mentioned the amended Invoice outlines when and the way such sharing of buyer threat knowledge can happen. The Invoice additionally offers the authorized and operational safeguards to make sure the confidentiality of data that’s shared and the pursuits of legit clients. He mentioned the amendments incorporate suggestions from public session on COSMIC, including that the info platform will make it simpler for monetary establishments to detect and deter legal exercise.

The platform can be deployed in phases and is anticipated to be operational from the second half of subsequent 12 months. Within the preliminary section, sharing of data between MAS and the six banks can be voluntary. 

This section will allow the platform to acquire operational stability and for MAS, alongside the taking part monetary establishments, to fine-tune its options and resolve operational considerations, Tan mentioned. 

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Entry to the info platform can be expanded to extra monetary establishments finally, with extra give attention to different threat areas. For the preliminary section, COSMIC will give attention to three areas: trade-based cash laundering; misuse of authorized individuals, such because the abuse of shell firms; and financing and evasion of worldwide sanctions. The sharing of knowledge may even be made necessary in higher-risk conditions, the minister famous.

“COSMIC will enable participant monetary establishments to share with each other data, on a confidential foundation, on clients whose profile or conduct reveals potential monetary crime considerations,” Tan mentioned.

“Such threat data might embrace ‘crimson flag’ behaviors and particulars of the regarding transaction. Sharing on COSMIC would offer a recipient monetary establishment with higher data to enhance its threat understanding of a buyer, thus, enabling the monetary establishment to detect suspicious conduct extra precisely and expediently.”

Monetary establishments may use knowledge on the platform to find out if a monetary transaction is legit. If a transaction is assessed and suspected to contain legal actions, a report on the client should be submitted to the related authorities beneath present legal guidelines.

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MAS can have entry to all data shared on COSMIC, which Tan mentioned is critical to assist the business regulator monitor processes and guarantee taking part monetary establishments are utilizing the platform appropriately. 

“Because the proprietor of the platform, MAS will guarantee COSMIC data is exchanged and saved securely,” the minister mentioned. “The platform can have sturdy controls, together with cybersecurity measures, corresponding to knowledge encryption and firewalls to dam unauthorized exterior entry. It is going to even have strict consumer entry limitations. These controls can be topic to periodic audits to make sure their efficacy.”

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Collaborating monetary establishments can be required to take care of sturdy knowledge cybersecurity measures for COSMIC, together with having programs and processes in place to forestall unauthorized use. They may even be anticipated to implement cybersecurity and encryption measures to guard knowledge obtained from COSMIC. 

Monetary establishments additionally usually are not permitted to reveal data obtained through the info platform to third-party organizations, besides in particular circumstances, corresponding to fulfilment of court docket orders or following police requests to facilitate investigations. 

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