SINGAPORE (Reuters) -Singapore’s central bank said on Friday it would create a digital platform enabling banks to share information on customers and transactions, part of efforts to prevent money laundering and financing of criminal activity.
The Monetary Authority of Singapore (MAS) said in a statement that it plans to launch the platform in the first half of 2023 and make it available to the city-state’s six biggest commercial banks in the initial phase.
Financial and trade hubs like Singapore are particularly vulnerable to money laundering due to large cross-border flows.
“The information-sharing framework is designed to target serious criminal behaviours and allow financial institutions to more quickly detect the bad actors to purge and deter them,” Loo Siew Yee, MAS’s assistant managing director for policy payments and financial crime, said in a statement.
Described by the MAS as the first centralised platform of its kind, the initiative was the result of cooperation between the MAS and DBS, OCBC, United Overseas Bank, Standard Chartered Bank, Citibank and HSBC.
The MAS said a common challenge faced by financial institutions was not being able to warn each other about unusual activity in customers’ accounts.
In 2015, Singapore discovered that funds linked to the scandal-ridden Malaysian state fund 1MDB were laundered through its banking system. The MAS shut down the local units of two Swiss private banks in 2016, froze millions of dollars in bank accounts, charged private bankers and imposed fines on banks.
“Bad actors in financial crimes typically use bank accounts from different banks over a period of time to hide and spend the illicit funds,” said Loretta Yuen, head of group legal and regulatory compliance at OCBC Bank.
“By sharing data and information of suspicious accounts at the first instance on a common platform, it will send red flags quickly across the network to stop other banks from being used for financial crimes,” she said.
(Reporting by Anshuman Daga; editing by Mark Heinrich)