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Sanctions Screening in Singapore: How Does Tookitaki Help?

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Tookitaki
10 Jul 2023
7 min
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In today's rapidly evolving financial landscape, the importance of sanctions screening cannot be overstated. As the gatekeepers of the global financial system, banks and other financial institutions have a critical role to play in ensuring the integrity of financial transactions. Sanctions screening serves as an essential function in this mission, enabling institutions to identify and manage potential risks associated with illegal or unethical activities. 

Sanctions screening refers to the process of cross-referencing customer data with lists of sanctioned entities provided by international and national regulatory bodies. These lists include individuals, corporations, and countries that face restrictions due to their involvement in activities such as terrorism, money laundering, human rights violations, or other forms of criminal conduct. A comprehensive and accurate sanctions screening process is, therefore, a crucial component of a robust compliance program. 

In the vibrant financial hub of Singapore, the need for effective sanctions screening tools is particularly acute. The city-state's financial sector, which is marked by its openness, connectivity, and innovation, is also exposed to the risk of being misused for illicit activities. Singapore's commitment to maintaining a clean and trusted financial centre necessitates that financial institutions operating here are equipped with the best tools to manage their compliance responsibilities, including sanctions screening. 

Sanctions Screening in Singapore

Singapore, one of the world's leading financial hubs, operates under a robust regulatory framework that heavily emphasises adhering to international standards in sanctions screening. The financial institutions here need to ensure their compliance with various sanctions programs initiated by the United Nations (UN), the European Union (EU), and the United States (US), among others. Failure to comply with these regulations can lead to substantial financial penalties, reputational damage, and even loss of banking licenses.

The Monetary Authority of Singapore (MAS), the country's central bank and integrated financial regulator, plays a pivotal role in setting and enforcing standards related to sanctions screening. MAS issues guidelines and risk management principles to financial institutions to aid their compliance with global sanctions, and it expects these institutions to maintain effective systems and controls to detect and prevent illicit financial activities.

MAS has issued various notices on the Prevention of Money Laundering and Countering the Financing of Terrorism, which financial institutions in Singapore are obliged to follow. These notices explicitly mandate financial institutions to conduct sanctions screening and comprehensively understand the sanctions landscape. 

However, the complex and dynamic nature of global sanctions, coupled with the sheer volume of screening alerts generated in highly active markets like Singapore, often poses significant challenges to the conventional methods of sanctions screening. The subsequent sections of this blog will delve into these challenges and the transformative potential of Regtech solutions like Tookitaki's Smart Screening Software.

Transaction Screening (1)

Challenges in Traditional Sanctions Screening

Sanctions screening is a key component of an effective risk management system. However, traditional methods of sanctions screening have faced numerous challenges, especially in an era of rapidly evolving regulatory landscapes and increasingly sophisticated financial crimes.

Complexity and Dynamism of Sanctions Lists

Sanctions lists are dynamic and multifaceted, changing constantly as geopolitical climates shift and authorities worldwide respond to emerging threats. These lists can include not only countries and organizations but also individuals and specific sectors or industries. Keeping up with these changes and ensuring that screening systems are always up-to-date can be a herculean task for many financial institutions.

High Volume of Alerts and False Positives

Traditional screening tools often rely on deterministic matching algorithms that generate an enormous number of alerts. While these tools are designed to cast a wide net, the downside is a high volume of false positives, which require significant manual effort and resources to review and clear. This high false-positive rate can lead to "alert fatigue," reducing the effectiveness of the screening process and increasing the risk of missing genuine threats.

Data Quality Issues

Sanctions screening relies heavily on the quality of the underlying data. Inaccurate, incomplete, or outdated customer data can lead to ineffective screening and increase the risk of regulatory non-compliance. Data quality issues can also contribute to a high number of false positives and false negatives, both of which carry substantial risks.

Resource Intensive and Costly

Traditional sanctions screening can be resource-intensive, requiring significant time and effort to manage and maintain. It can also be costly, particularly when factoring in staff training costs, systems maintenance, and the potential fines and reputational damage associated with regulatory breaches.

These challenges underscore the need for smarter, more efficient sanctions screening solutions that can adapt to the evolving regulatory landscape and help financial institutions in Singapore maintain robust compliance programs.

The Role of Regtech in Sanctions Screening

As financial institutions grapple with the challenges of traditional sanctions screening, Regulatory Technology, or Regtech, emerges as a beacon of transformation and progress. Leveraging advanced technologies such as Artificial Intelligence (AI) and Machine Learning (ML), Regtech presents the potential to revolutionize the sanctions screening landscape.

Regtech: A Game Changer

Regtech is a branch of the FinTech industry that leverages technology to streamline and enhance regulatory processes. It offers innovative solutions designed to reduce compliance-related risks, minimize costs, and increase operational efficiency. 

In the context of sanctions screening, Regtech can automate and enhance many of the processes that have traditionally been time-consuming and prone to error. This includes ingesting and interpreting sanctions lists automatically, tracking changes, and updating screening systems in real-time.

AI and Machine Learning: The Path to Efficiency

AI and Machine Learning form the core of advanced Regtech solutions. These technologies can learn from historical data, identify patterns, and make predictions, thereby enhancing the screening process's accuracy and efficiency.

AI-driven solutions can intelligently screen transactions against sanctions lists, reducing the number of false positives and ensuring more precise matching. They can also help improve data quality, another crucial aspect of effective sanctions screening.

Machine Learning, in particular, plays a critical role in dynamic learning and model improvement. It can continuously learn from new data, adapt to evolving threats, and improve its predictive accuracy over time. This is particularly valuable in the ever-changing financial crime and sanctions landscape, where new patterns and techniques emerge regularly.

In essence, Regtech, powered by AI and Machine Learning, offers the potential to transform sanctions screening from a reactive, manual process to a proactive, automated, and intelligent one. It promises significant benefits for financial institutions regarding reduced costs, improved efficiency, and enhanced regulatory compliance.

A Detailed Look at Tookitaki's AMLS and Its Smart Screening Module

Tookitaki's Anti-Money Laundering Suite (AMLS) is a groundbreaking system that modernizes compliance processes for financial institutions. This award-winning solution helps these institutions build comprehensive, risk-based anti-money laundering programs. The AMLS offers key modules: Smart Screening, Dynamic Risk Scoring, Transaction Monitoring, and Case Manager. 

Tookitaki's Smart Screening Solutions

Tookitaki's AMLS platform features a modular design, with its Smart Screening Solution comprising of three core components: Prospect Screening, Name Screening, and Transaction Screening.

Prospect Screening

Tookitaki's Prospect Screening employs AI-powered fuzzy identity matching for real-time screening during prospect onboarding. This reduces regulatory compliance costs and risk exposure. It can screen against any number of watchlists, including third-party and internal blacklists and whitelists, using a hybrid two-pass matching approach for high precision and fewer false positives.

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Name Screening

Tookitaki's Name Screening solution uses machine learning and Natural Language Processing (NLP) techniques to accurately score and distinguish a true match from a false match across names and transactions in real-time and batch mode. It offers exhaustive coverage across 22+ languages and 10 different scripts, utilising over 50 name-matching techniques and integrating with any watchlist/sanction screening database like Worldcheck, Factiva Dow Jones, and LexisNexis.

Name Screening Smart Alert Management (SAM)

Tookitaki provides secondary scoring for the screening process. The approach uses proprietary multilayered supervised techniques which combine approaches in improved matching techniques (handles typos, spelling errors, titles, prefix/suffix, etc.) and detailed analysis of secondary information obtained from internal and externally available sources. The output triages alerts at the ‘hit’ level across individual and corporate names into L1, L2 and L3 buckets. The prioritised alerts are available for investigators to view and act on via the AMLS User Interface.

Transaction Screening

Tookitaki's Transaction Screening is similar to Name Screening but extends its capabilities to the transaction level. It screens transactions against sanctions lists, PEP databases, adverse media, and local/internal blacklists using the same cutting-edge technology as in Name Screening.

Case Study: Successful Implementation of Tookitaki’s Smart Screening Software

Financial institutions using Tookitaki's Smart Screening solution have seen significant improvements in their ability to manage their compliance workload. A case study with a global bank revealed that, after deploying SAM, every one in six alerts became a suspicious report, a 600% improvement in operational effectiveness, and a 53% increase in productivity.

In another case study with a tier 1 bank in Singapore, Smart Screening-SAM achieved a 70% reduction in false positives for individual names and 60% reduction in false positives for corporate names through our Name Screening module.

The Future of Sanctions Screening in Singapore with Tookitaki

As we've explored in this blog post, Tookitaki’s Smart Screening Software is revolutionising the way sanctions screening is conducted in Singapore. By utilizing advanced machine learning and AI, it's not just automating processes but making them more efficient, accurate, and risk-focused.

The potential positive impacts of continuing to use Tookitaki’s Regtech solutions in Singapore are manifold. For financial institutions, the immediate benefits are the promise of reducing operational costs, enhancing compliance, and minimizing regulatory penalties. For regulators and the nation as a whole, more efficient and effective sanctions screening processes could significantly enhance Singapore's reputation as a safe, transparent and compliant business environment.

Looking to the future, sanctions screening will likely continue to be a top priority for regulators worldwide. The growing complexities of financial crimes demand advanced, smart solutions like Tookitaki's. The technology is here, and its adoption is not only a smart move but is becoming an industry standard. 

If you are as excited about these possibilities as we are, we invite you to learn more about our solution. Please don’t hesitate to reach out to us for more information to see Tookitaki’s Smart Screening Software in action. Take a step into the future of sanctions screening with us. Embrace a more compliant, cost-effective, and secure tomorrow for your institution.

 

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Blogs
19 Jun 2025
5 min
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Australia on Alert: Why Financial Crime Prevention Needs a Smarter Playbook

From traditional banks to rising fintechs, Australia's financial sector is under siege—not from market volatility, but from the surging tide of financial crime. In recent years, the country has become a hotspot for tech-enabled fraud and cross-border money laundering.

A surge in scams, evolving typologies, and increasingly sophisticated actors are pressuring institutions to confront a hard truth: the current playbook is outdated. With fraudsters exploiting digital platforms and faster payments, financial institutions must now pivot from reactive defences to real-time, intelligence-led prevention strategies.

The Australian government has stepped up through initiatives like the National Anti-Scam Centre and legislative reforms—but the real battleground lies inside financial institutions. Their ability to adapt fast, collaborate widely, and think smarter will define who stays ahead.

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The Evolving Threat Landscape

Australia’s shift to instant payments via the New Payments Platform (NPP) has revolutionised financial convenience. However, it's also reduced the window for detecting fraud to mere seconds—exposing institutions to high-velocity, low-footprint crime.

In 2024, Australians lost over AUD 2 billion to scams, according to the ACCC’s Scamwatch report:

  • Investment scams accounted for the largest losses at AUD 945 million
  • Remote access scams followed with AUD 106 million
  • Other high-loss categories included payment redirection and phishing scams

Behind many of these frauds are organised crime groups that exploit vulnerabilities in onboarding systems, mule account networks, and compliance delays. These syndicates operate internationally, often laundering funds through unsuspecting victims or digital assets.

Recent alerts from AUSTRAC and ASIC also highlighted the misuse of cryptocurrency exchanges, online gaming wallets, and e-commerce platforms in money laundering schemes. The message is clear: financial crime is mutating faster than most defences can adapt.

Australia FC

Why Traditional Defences Are Falling Short

Despite growing threats, many financial institutions still rely on legacy systems that were designed for a static risk environment. These tools:

  • Depend on manual rule updates, which can take weeks or months to deploy
  • Trigger false positives at scale, overwhelming compliance teams
  • Operate in silos, with no shared visibility across institutions

For instance, a suspicious pattern flagged at one bank may go entirely undetected at another—simply because they don’t share learnings. This fragmented model gives criminals a huge advantage, allowing them to exploit gaps in coverage and coordination.

The consequences aren’t just operational—they’re strategic. As financial criminals embrace automation, phishing kits, and AI-generated deepfakes, institutions using static tools are increasingly being outpaced.

The Cost of Inaction

The financial and reputational fallout from poor detection systems can be severe.

1. Consumer Trust Erosion

Australians are increasingly vocal about scam experiences. Victims often turn to social media or regulators after being defrauded—especially if they feel the bank was slow to react or dismissive of their case.

2. Regulatory Enforcement

AUSTRAC has made headlines with its tough stance on non-compliance. High-profile penalties against Crown Resorts, Star Entertainment, and non-bank remittance services show that even giants are not immune to scrutiny.

3. Market Reputation Risk

Investors and partners view AML and fraud management as core risk factors. A single failure can trigger media attention, customer churn, and long-term brand damage.

The bottom line? Institutions can no longer afford to treat compliance as a cost centre. It’s a driver of brand trust and operational resilience.

Rethinking AML and Fraud Prevention in Australia

As criminal innovation continues to escalate, the defence strategy must be proactive, intelligent, and collaborative. The foundations of this smarter approach include:

✅ AI-Powered Detection Systems

These systems move beyond rule-based alerts to analyse behavioural patterns in real-time. By learning from past frauds and adapting dynamically, AI models can flag suspicious activity before it becomes systemic.

For example:

  • Unusual login behaviour combined with high-value NPP transfers
  • Layered payments through multiple prepaid cards and wallets
  • Transactions just under the reporting threshold from new accounts

These patterns may look innocuous in isolation, but form high-risk signals when viewed in context.

✅ Federated Intelligence Sharing

Australia’s siloed infrastructure has long limited inter-institutional learning. A federated model enables institutions to share insights without exposing sensitive data—helping detect emerging scams faster.

Shared typologies, red flags, and network patterns allow compliance teams to benefit from collective intelligence rather than fighting crime alone.

✅ Human-in-the-Loop Collaboration

Technology is only part of the answer. AI tools must be designed to empower investigators, not replace them. When AI surfaces the right alerts, compliance professionals can:

  • Reduce time-to-investigation
  • Make informed, contextual decisions
  • Focus on complex cases with real impact

This fusion of human judgement and machine precision is key to staying agile and accurate.

A Smarter Playbook in Action: How Tookitaki Helps

At Tookitaki, we’ve built an ecosystem that reflects this smarter, modern approach.

FinCense is an AI-native platform designed for real-time detection across fraud and AML. It automates threshold tuning, uses network analytics to detect mule activity, and continuously evolves with new typologies.

The AFC Ecosystem is our collaborative network of compliance professionals and institutions who contribute real-world risk scenarios and emerging fraud patterns. These scenarios are curated, validated, and available out-of-the-box for immediate deployment in FinCense.

Some examples already relevant to Australian institutions include:

  • QR code-enabled scams using fake invoice payments
  • Micro-laundering via e-wallet top-ups and fast NPP withdrawals
  • Cross-border layering involving crypto exchanges and shell businesses

Together, FinCense and the AFC Ecosystem enable institutions to:

Building a Future-Ready Framework

The question is no longer if financial crime will strike—it’s how well prepared your institution is when it does.

To be future-ready, institutions must:

  • Break silos through collaborative platforms
  • Invest in continuous learning systems that evolve with threats
  • Equip teams with intelligent tools, not more manual work

Those who act now will not only improve operational resilience, but also lead in restoring public trust.

As the financial landscape transforms, so too must the compliance infrastructure. Tomorrow’s threats demand a shared response, built on intelligence, speed, and community-led innovation.

Strengthening AML Compliance Through Technology and Collaboration

Conclusion: Trust Is the New Currency

Australia is at a turning point. The cost of reactive, siloed compliance is too high—and criminals are already exploiting the lag.

It’s time to adopt a smarter playbook. One where technology, collaboration, and shared intelligence replace outdated controls.

At Tookitaki, we’re proud to build the Trust Layer for Financial Services—empowering banks and fintechs to:

  • Stop fraud before it escalates
  • Reduce false positives and compliance fatigue
  • Strengthen transparency and accountability

Through FinCense and the AFC Ecosystem, our mission is simple: enable smarter decisions, faster actions, and safer financial systems.

Australia on Alert: Why Financial Crime Prevention Needs a Smarter Playbook
Blogs
23 Jun 2025
5 min
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Behind the Compliance Curtain: The Future of AML in Australia

Australia’s sunny financial reputation has come under scrutiny—and this time, the spotlight is global.

From casino scandals to multi-billion-dollar remittance breaches, the country’s anti-money laundering (AML) framework is facing a pivotal moment. What was once seen as a gold standard in regional governance is now under pressure to catch up—and compliance officers across banks, fintechs, and regulatory bodies are watching closely.

So what lies behind the curtain of AML in Australia today—and what must the financial community do next?

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The AML Landscape in Australia: Where Things Stand

Australia’s AML/CFT regime has long been led by AUSTRAC, the nation’s financial intelligence unit and regulator. Over the past few years, AUSTRAC has made headlines with major enforcement actions:

  • Westpac (2020): A $1.3 billion penalty over 23 million breaches of AML laws.
  • Crown Resorts (2022): Systemic failure to monitor high-risk transactions, especially tied to junket operators and casinos.
  • Star Entertainment Group (2022): Similar failings in AML controls and customer due diligence.

These cases revealed a troubling pattern: AML risks were known, red flags existed, but institutions lacked either the technology, urgency, or capability to respond in real time.

More worryingly, Australia’s AML legal framework—particularly its coverage of non-financial sectors like lawyers, accountants, real estate agents, and high-value dealers—remains incomplete. This gap in regulatory coverage continues to raise red flags with global watchdogs, especially the Financial Action Task Force (FATF).

The Tranche 2 Reforms: Closing the Gaps or Buying Time?

For nearly two decades, Australia has delayed implementing the so-called Tranche 2 reforms, which would bring designated non-financial businesses and professions (DNFBPs) into the AML regulatory net.

What Tranche 2 Proposes:

  • AML obligations for real estate professionals, lawyers, accountants, and company service providers.
  • Stronger beneficial ownership transparency.
  • Enhanced customer due diligence and reporting mechanisms across non-financial channels.

Yet, while successive governments have pledged action, progress has been sluggish. Industry bodies have raised concerns about cost, feasibility, and regulatory overreach. But international momentum is building, and patience is wearing thin.

In its 2023 follow-up review, FATF explicitly called out Australia’s delayed reforms. Without Tranche 2, the country faces increased scrutiny—and potential reputational damage that could affect correspondent banking relationships and investor trust.

AUS blog

The Tech Factor: How Modern AML Looks in 2025

Even where regulations exist, legacy compliance systems are struggling to keep up with today’s threats. Financial crime has evolved. So must the tools to fight it.

What’s Changed:

  • Speed: Real-time payments and digital wallets mean funds can be layered, split, and moved across jurisdictions in seconds.
  • Complexity: Fraudsters are using mules, shell companies, and social engineering to blend illicit flows with legitimate ones.
  • Volume: Transaction volumes are rising, making manual reviews and static rules increasingly unviable.

Modern AML compliance now demands real-time monitoring, behavioural analysis, and AI-driven detection engines that adapt to new patterns as they emerge. This is where advanced platforms like Tookitaki’s FinCense come in—offering scenario-driven intelligence and federated learning capabilities tailored for high-risk markets like Australia.

Case Insight: Where Detection Failed—and Where Tech Could Have Helped

Consider the AUSTRAC case against Crown Resorts. Red flags—such as large, unexplained cash deposits, transactions linked to politically exposed persons (PEPs), and high-risk jurisdictions—were not acted upon for months, sometimes years.

The problem wasn’t a lack of data. It was a failure to connect the dots in real time.

With an adaptive AML system like FinCense in place, the scenario might have looked different:

  • Suspicious transaction patterns would have triggered real-time alerts.
  • Beneficiary risk scoring could have flagged high-risk links earlier.
  • AI-based learning could have surfaced anomalous activity invisible to static rule sets.

The outcome? Faster intervention, reduced institutional risk, and regulatory confidence.

Building the Future: Tookitaki’s Role in Strengthening Australia’s AML Defences

Tookitaki’s FinCense platform is designed for the complexity of modern financial ecosystems—especially those navigating regulatory reform and reputational pressure, like Australia.

Key Features That Matter:

  • Federated Learning Engine: Enables institutions to learn from emerging typologies across the region—without sharing sensitive data.
  • Real-Time Transaction Monitoring: Uses AI to surface anomalous patterns and risk indicators at the speed of today’s financial crime.
  • Scenario-Based Approach: Combines regulatory intelligence with real-world cases to keep detection capabilities relevant and context-rich.
  • Audit-Ready Investigations: Helps compliance teams manage alerts, document findings, and demonstrate control effectiveness.

As Tranche 2 looms and regulatory expectations rise, FinCense can help banks and fintechs in Australia stay ahead of both criminal innovation and regulatory demand.

What Compliance Teams Must Do Now

✅ Prepare for Tranche 2 (Even If It’s Not Here Yet)

  • Map exposure to DNFBPs.
  • Engage with vendors and consultants to scope out necessary controls.

✅ Build for Agility and Resilience

  • Invest in dynamic risk-scoring engines and AI-powered analytics.
  • Integrate systems that can adapt, not just flag transactions.

✅ Collaborate and Learn

  • Participate in intelligence-sharing platforms like the AFC Ecosystem.
  • Use scenario libraries to anticipate typologies before they strike.

✅ Rethink ROI from an AML Lens

  • With regulators now tracking the effectiveness (not just existence) of AML systems, demonstrate real-time capability, reduced false positives, and improved investigation turnaround.
Strengthening AML Compliance Through Technology and Collaboration

Conclusion: The Curtain’s Up—What Will Australia Do Next?

Australia stands at a crossroads. Behind the curtain of its legacy AML system lies both risk and opportunity.

The risk is clear: continued global scrutiny, regulatory gaps, and potential grey listing if reforms stall.
But the opportunity is greater: to lead the region with tech-driven, intelligence-led compliance that’s faster, smarter, and more collaborative than ever.

As the regulatory environment evolves, so must the institutions within it. With the right partners, like Tookitaki, and a commitment to real-time defences, Australia can transform its AML posture from reactive to revolutionary.

Because in the fight against financial crime, detection is no longer enough. It’s time to defend.

Behind the Compliance Curtain: The Future of AML in Australia
Blogs
02 Jul 2025
4 min
read

Inside AUSTRAC: Navigating Australia’s AML/CTF Regulations in a High-Risk Era

As money laundering methods grow more sophisticated, the pressure on financial institutions to detect, report, and prevent financial crime is intensifying — and AUSTRAC is at the centre of it all.
In an era where financial ecosystems are rapidly digitising, AUSTRAC’s role in overseeing Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) compliance has become mission-critical. For banks, fintechs, and other reporting entities, staying ahead of regulatory expectations is no longer just a compliance issue — it’s a matter of reputation, trust, and long-term viability.

In this blog, we explore:

  • AUSTRAC’s mandate and structure
  • Key AML/CTF obligations under Australian law
  • Landmark enforcement cases
  • Upcoming reforms, including Tranche 2
  • FATF scrutiny and global compliance pressures
  • How tech-forward compliance strategies are reshaping the future
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What is AUSTRAC and Why Does It Matter?

AUSTRAC — the Australian Transaction Reports and Analysis Centre — is the government body responsible for detecting and disrupting criminal abuse of Australia’s financial system.

AUSTRAC has a dual mandate:

  • Regulator: Supervises compliance with AML/CTF obligations.
  • Financial Intelligence Unit (FIU): Collects and analyses data to support law enforcement, national security, and international counterparts.

It works with over 17,000 reporting entities, ranging from traditional banks to digital wallets, remittance providers, gaming platforms, and more. As both a data collector and enforcer, AUSTRAC is uniquely positioned to uncover illicit financial activity at scale.

A Brief History of AML/CTF Regulation in Australia

Australia’s journey in strengthening its anti-money laundering and counter-terrorism financing framework began in earnest with the passage of the AML/CTF Act in 2006. This legislation introduced foundational obligations such as KYC procedures, transaction monitoring, and reporting requirements for a wide range of financial institutions and service providers.

Over time, the regime has evolved significantly. In 2014, AUSTRAC formalised the risk-based approach, requiring entities to tailor their AML programs based on their specific exposure to financial crime risks.

The period between 2018 and 2020 marked a turning point in enforcement, with AUSTRAC taking decisive action against some of Australia’s largest institutions — including Tabcorp, the Commonwealth Bank, and Westpac — for major compliance failures.

In the years that followed, Tranche 2 reforms were proposed to expand AML/CTF obligations to include professions such as lawyers, accountants, and real estate agents, which are known to be exploited for laundering illicit funds.

As of 2024, these reforms remain under active discussion, with the Australian government under growing pressure from international bodies such as the FATF to close regulatory gaps. The expected passage of Tranche 2 in 2025 would significantly broaden AUSTRAC’s regulatory reach and bring Australia closer in line with global AML standards.

AUSTRAC


Understanding Your AML/CTF Obligations

If your institution provides “designated services” under the AML/CTF Act, here’s what you’re required to do:

🔹 AML/CTF Program (Part A and Part B)

  • Part A: Institutional risk assessments, governance, reporting, and training
  • Part B: Customer identification and verification procedures (KYC)

🔹 Reporting Requirements

  • Suspicious Matter Reports (SMRs)
    Must be submitted when the activity raises suspicion, regardless of the amount.
  • Threshold Transaction Reports (TTRs)
    For cash transactions of AUD 10,000 or more.
  • International Funds Transfer Instructions (IFTIs)
    Mandatory for cross-border fund movements.

🔹 Customer Due Diligence (CDD)

  • Verify customer identity at onboarding
  • Apply Enhanced Due Diligence (EDD) for high-risk customers or transactions
  • Conduct ongoing monitoring

🔹 Record Keeping

  • Maintain transaction and identity verification records for at least 7 years.

AUSTRAC’s Enforcement Power: Learning from Past Failures

AUSTRAC is not just a passive regulator. When institutions fall short, the consequences are severe and public.

The Crown Resorts Case

In 2022, Crown Melbourne and Crown Perth were found guilty of systemic AML/CTF program failures. AUSTRAC investigations revealed:

  • Inadequate risk assessments of high-risk customers and junket operators
  • Poor transaction monitoring
  • Weak governance and oversight

Penalty: AUD 450 million settlement
Impact: Major reputational damage and licence scrutiny

The Westpac Case

Arguably, the most consequential case in Australia’s AML history. In 2020, Westpac was fined AUD 1.3 billion — the largest civil penalty in Australian corporate history — for:

  • Failing to report over 23 million IFTIs
  • Inadequate transaction monitoring
  • Enabling transactions linked to child exploitation networks

These cases underscore the high expectations placed on financial institutions — not just to comply, but to detect, investigate, and prevent abuse of their services.

Australia’s AML Pain Points and What Tranche 2 Means

Unregulated Professions: The Tranche 2 Gap

Australia’s AML/CTF regime currently does not cover “gatekeeper” professions — lawyers, accountants, real estate agents, and company service providers. This gap has drawn criticism from both the FATF and domestic watchdogs.

Tranche 2, expected to be legislated in 2025, will:

  • Extend AML obligations to these sectors
  • Close critical vulnerabilities exploited for shell companies, illicit property purchases, and tax evasion
  • Align Australia with global AML standards

For fintechs and financial institutions, this will mean greater scrutiny of third-party relationships and new customer categories.

FATF Evaluation: Australia Under the Global Lens

The Financial Action Task Force (FATF) — the global AML watchdog — is expected to conduct its next mutual evaluation of Australia soon. In its last review, Australia was flagged for:

  • Delays in enacting Tranche 2 reforms
  • Over-reliance on self-regulation in some sectors
  • Inconsistent enforcement levels

AUSTRAC and the government are now under pressure to demonstrate tangible improvements, including:

  • Broader coverage of at-risk sectors
  • Better risk-based supervision
  • More tech-led compliance outcomes

How Fintechs Can Stay Ahead

For fintechs, the AML/CTF journey can seem overwhelming, especially when scaling across regions. Here are five key steps to staying ahead:

  1. Invest Early in AML Infrastructure
    Don’t wait until licensing or audits to build compliance controls.
  2. Use Technology to Monitor in Real-Time
    Especially for high-velocity, small-value transactions common in wallets or P2P services.
  3. Customise Risk Scoring
    A high-risk customer in lending may not be the same as one in gaming or cross-border remittances.
  4. Build for Scalability
    Choose AML platforms that can grow with you, not patchwork solutions.
  5. Stay Informed on Regional Variations
    AUSTRAC’s expectations differ from MAS (Singapore) or BSP (Philippines); know your market.

Why AML Tech Is No Longer Optional

In today’s landscape, manual reviews and static rules don’t cut it. Criminals move faster — and so must compliance teams.

Key advantages of modern AML platforms:

  • Machine learning-based transaction monitoring
  • Dynamic threshold calibration to reduce false positives
  • Real-time alerting and case triage
  • Behavioural profiling and pattern recognition
  • Audit-ready investigation trails

How Tookitaki Helps You Stay Ahead

Tookitaki’s FinCense platform is purpose-built to tackle the real challenges banks and fintechs face in Australia and across APAC.

Key Modules:

🔹 Customer Onboarding Suite
Seamlessly integrates KYC, risk profiling, and watchlist screening

🔹 Transaction Monitoring
Scenario-based detection using patterns from the AFC Ecosystem

🔹 Smart Screening
Covers national ID, aliases, and local nuances — built to minimise false positives

🔹 FinMate (AI Copilot)
Assists investigators with summarised case narratives, red flags, and recommendations

Collaborative Advantage:

FinCense is powered by the AFC Ecosystem — a global community where financial institutions share typologies and red flags anonymously. This collective intelligence improves detection and reduces blind spots for all members.

For institutions facing rising risks from cross-border scams, shell company abuse, and real-time laundering, Tookitaki offers a smarter, community-driven alternative to traditional rule engines.

Strengthening AML Compliance Through Technology and Collaboration


Final Thoughts: A Smarter Future Starts Now

AUSTRAC’s expanding role and the upcoming Tranche 2 reforms signal a future where compliance will be more inclusive, tech-powered, and intelligence-driven.

For banks and fintechs, the opportunity lies not just in complying, but in leading. With the right tools, collaborative frameworks, and forward-thinking partners like Tookitaki, staying ahead of both regulation and risk is no longer an aspiration — it’s an expectation.

Inside AUSTRAC: Navigating Australia’s AML/CTF Regulations in a High-Risk Era