Reported by DYLAN LOH

Foreign and local banks in Singapore will be required to share information with one another on a digital platform that will make it easier to raise red flags on potential money laundering acts, as the city-state tightens oversight on illicit capital flows.

The tiny nation’s lawmakers on Tuesday passed a bill paving the way for the platform, called COSMIC, which is expected to come online in the second half of 2024.

“The bill seeks to strike a balance between protecting the privacy of legitimate customers and also preventing criminal abuse of this protection to conceal serious financial crime,” said Alvin Tan, Singapore’s minister of state for trade and industry. “The bill will permit sharing of information between financial institutions for financial crime prevention and detection purposes within tightly circumscribed parameters.”

Amid increased interest from wealthy families in the region to manage assets out of the Asian financial hub, the largest financial institutions with operations in the city will use the new system. Collectively, these institutions account for more than 90% of Singapore’s commercial banking market.

Local lenders DBS Group Holdings, Oversea-Chinese Banking Corp. and United Overseas Bank as well as foreign players HSBC, Citibank and Standard Chartered form the initial batch of companies that will kick off the digital initiative, with more players potentially joining later.

The Monetary Authority of Singapore, the city-state’s financial regulator and central bank, expects that in COSMIC’s first two years participants will use the platform to voluntarily share information on acts of suspected money laundering and transfers that might finance terrorism.

After that, the MAS intends to make such practices mandatory.

Read full report: https://asia.nikkei.com/Business/Finance/Singapore-taps-HSBC-Citi-for-rigid-money-laundering-controls