Is your firm adapting to the changing landscape of Anti Money Laundering?

Australia has historically been reluctant to expand AML/CTF legislation, which has subsequently made it a very desirable location for organised crime to operate. According to data from the Australian Crime Commission, money laundering costs the Australian economy about AUD$60.1 billion annually.

In the ever-evolving landscape of financial crime, staying ahead of the curve (globally) is not just a best practice – it’s an absolute necessity. For financial crime and compliance teams in Australia, it’s crucial to keep a finger on the pulse of the latest updates and developments in the field.

This insight highlights why compliance efforts need to be heightened to effectively combat financial crime in this dynamic environment, as well as focussing on the importance of high-quality talent driving your fight against new risk and updated regulations.

Don’t avoid more strenuous AML expectations in the coming months.

There are strong indications that the Australian Government will finally move forward with the long-anticipated and significant expansion of the anti-money laundering/counter-terrorist financing regime over the next 12 to 18 months as AUSTRAC continues to take enforcement action against non-compliance with Australia’s existing AML/CTF laws. AML Tranche 2 is coming to Australia, albeit many years behind the rest of the developed world.

The Attorney-General’s Office has recently published a thorough consultation document which covered both the updating of the current AML/CTF framework as well as introducing legislation to effect Tranche 2 reforms, extending the AML/CTF regime to include previously excluded gatekeeper professions like solicitors, accountants, trust and company service providers, and real estate agents.

Global experience shows that it is essential to include gatekeeper professions like solicitors, accountants and real estate brokers within AML/CTF legislation. The Financial Action Task Force (FATF), which has previously chastised the Australian government’s lack of action in this area, also vocalises this opinion.

The failure to ensure that a risk-based approach was appropriately and proportionately implemented has been a major cause of the non-compliance of financial institutions in Australia. Firms will need to expand their knowledge of the nature and scope of the risks they encounter so that as regulated organisations, they can better comprehend the activities that must be taken to minimise hazards. In the existing regime, there is no express duty to assess risk; nonetheless, multiple rules already imply this necessity.

Regulated firms will need to take the necessary procedures of recognising, evaluating, and comprehending the risks associated with money laundering and terrorism financing.

Rise of modern technology calls for more risk profiling.

Anti-money laundering measures are essential to keep up with emerging techniques that criminals frequently use to conceal illicit income, which is often related to sanctions compliance. Blockchain-based transactions and other emerging technologies, including digital currencies, are ripe for illicit activity  undetected  as financial institutions struggle to put in place the necessary controls.

Although increasing financial inclusion and ease, the rise of fintechs and digital banks has created new difficulties. These organisations frequently struggle with developing effective AML processes while also innovating in a quick-paced environment. The COVID-19 pandemic has actually made the problem significantly worse  as an increase in digital transactions has been accompanied by an equivalent increase in cybercrimes and fraudulent activities.

Additionally, the sophistication of criminal networks’ strategies  continues to rise. Cutting-edge technology, including artificial intelligence and machine learning, are leveraged to carry out extensive activities that are challenging to identify using conventional AML systems.

Implementing monitoring transactions in real-time and according to risk is one area that firms should consider. Real-time transaction monitoring speeds up response times by enabling quick identification of questionable activity. Furthermore, risk-based monitoring makes sure that resources are deployed effectively, with high-risk entities receiving more attention.

Another area of focus should be on ensuring strong Know Your Customer (KYC) and Customer Due Diligence (CDD) Procedures. Effective AML compliance is built on solid CDD and KYC procedures. The use of technology to improve these procedures can lead to a deeper comprehension of client risk profiles, effective customer activity monitoring and better compliance outcomes

The fight against financial crime needs the right talent.

In Australia, the need for exceptional talent in the fight against financial crime has never been more critical. As the global financial landscape becomes increasingly complex and interconnected, the potential for illicit activities such as money laundering, fraud, and corruption has grown exponentially.

To effectively combat these threats and maintain the integrity of Australia’s financial system, a pool of highly skilled individuals is essential. These individuals possess the expertise to navigate intricate financial transactions, analyse vast amounts of data, and employ advanced technological tools to detect and prevent financial crimes.. In this era of rapid technological advancement and evolving criminal tactics, nurturing, empowering and utilising such talent is paramount to Australia’s continued resilience against financial crime.

Momenta’s Resourcing Solutions

Momenta Group are tackling the actual issues flagged above backed by our more than 30 years of expertise working with organisations of all sizes. Momenta’s ISO certified process provides  a high-quality solution of qualified and experienced industry experts with in-depth experience and knowledge of the regulatory landscape

Using the expertise of Momenta’s specialist resourcing  offers Financial Institutions the breathing space to resolve any additional issues their controls and financial crime teams may have. Setting up the right teams ensures any gaps are found before regulators further pressure on Financial Institutions to strengthen current compliance systems and controls, and ahead of significant penalties being issued.

If you are facing added regulatory and compliance, and need additional and experienced resourcing support, speak to us to see how Momenta can enable and support your existing team – with the right Contingent, Permanent and Fixed Term resources, when and where you need them, for as long as you need them. 


Reference list:
Ozkan , Baran . “The Changing Landscape of Anti-Money Laundering: Adapt and Thrive.”, 2 Aug. 2023, Accessed 4 Oct. 2023.