The assessments, undertaken in close collaboration with the Australian banking sector, state and Commonwealth regulatory and law enforcement agencies, found that most cases of suspected money laundering, alongside numerous cases of terrorist financing, involved retail banking products and services.
Particularly, transactions that facilitate cash movements or the rapid transfer of funds, domestically or internationally, were noted as being of most concern.
With such risk factors revealed, the level of ML/TF threat was found to be largely proportional to a given bank’s size, the types of customers it services, its products and services, and its global reach, leaving Australia’s major banks most vulnerable.
Major banks additionally served the highest amount of high-risk customers and had the most exposure to cash, putting them at heightened insecurity, AUSTRAC said.
Other domestic banks, despite having lesser vulnerabilities of scale, also engaged in enough risk factors to be at sufficient danger to warrant the ‘high’ risk label.
On the other hand, significantly smaller exposures to risk factors seen among foreign subsidiary banks and foreign bank branches led them to be found as only at a “medium” risk of ML/TF.
AUSTRAC chief executive, Nicole Rose PSM, hopes the risk assessments presented will be used by the banking sector to help businesses, customers and the Australian community from criminal threats.
“Criminals will exploit any gaps and use sophisticated methods for their own personal greed,” said Ms Rose.
“We are navigating a rapidly changing financial system and advances in technologies and platforms.
“That is why government, law enforcement and the finance sector must continue to work together to protect Australia’s financial system and Australians from serious and organised crime.”
The study was undertaken following the provision of $5.175 million to AUSTRAC from the federal government in 2018 to develop an expanded three-year program of work to deliver risk assessments that focus on Australia’s largest sectors – banking, gambling and remittance services.
