As scams surge and payments move faster, Australian banks must modernise fraud prevention to stay compliant, efficient, and trusted.

Introduction

Fraud is reshaping Australia’s banking landscape. In 2024, Australians lost more than AUD 3 billion to scams, according to the ACCC’s Scamwatch, with many losses involving bank transfers and digital payments. From authorised push payment (APP) scams and account takeovers to insider threats, criminals are exploiting every weakness in the system.

Banks now sit at the front line of defence. Customers expect them to protect every dollar, while AUSTRAC expects them to detect, report, and prevent illicit activity in real time. The challenge is clear: how can banks strengthen fraud prevention without slowing down legitimate transactions or frustrating customers?

The State of Banking Fraud in Australia

1. Real-Time Payments, Real-Time Risks

The New Payments Platform (NPP) and PayTo have transformed how Australians move money. Funds can travel between institutions in seconds, but the same speed benefits fraudsters. Once a fraudulent transfer is complete, recovery is difficult.

2. Scam Epidemic

Authorised push payment scams remain the biggest contributor to consumer losses. Investment scams and romance fraud are increasing year-on-year, while small business owners are being targeted through fake invoices and business email compromise (BEC).

3. Regulatory Pressure from AUSTRAC

AUSTRAC continues to raise expectations for fraud and AML controls. Institutions must report suspicious activity promptly and prove that their systems can detect emerging typologies.

4. Technology Gaps

Legacy systems are struggling to manage today’s fraud risks. Batch-based monitoring cannot keep up with real-time transactions, and manual investigations slow down responses.

5. Customer Trust at Stake

When fraud hits, reputation suffers. Restoring trust after a major incident can take years and millions of dollars in remediation.

Common Fraud Typologies in Australian Banking

1. Authorised Push Payment (APP) Scams: Victims are deceived into sending funds to criminals.
2. Account Takeover (ATO): Fraudsters gain control of legitimate accounts using stolen credentials.
3. Money Mule Networks: Recruited individuals move illicit funds through legitimate accounts.
4. Business Email Compromise (BEC): Attackers impersonate company executives or suppliers.
5. Synthetic Identities: Fraudsters blend real and fake data to open new accounts.
6. Insider Threats: Employees or third parties abuse access privileges.

Red Flags for Banking Fraud

• Multiple transactions just below AUSTRAC reporting thresholds.
• New beneficiaries added immediately before high-value transfers.
• Rapid fund movements through newly opened accounts.
• Unusual logins from unfamiliar devices or geographies.
• Repeated transaction reversals or complaints.
• Sudden activity inconsistent with customer history.

Why Fraud Prevention Needs a Rethink

Traditional fraud prevention relied on static rules and manual reviews. While effective a decade ago, this approach cannot handle today’s transaction speed or volume. Criminals now use automation, AI, and cross-channel tactics. Banks must respond with equal sophistication.

Modern fraud prevention depends on:

• Real-time analytics instead of post-event reviews.
• Machine learning models that adapt to new patterns.
• Integrated AML-fraud systems for holistic risk detection.
• Federated intelligence that shares insights across institutions.

Regulatory Expectations from AUSTRAC

Under the AML/CTF Act 2006, banks are required to:

• Conduct customer due diligence (CDD) and ongoing monitoring.
• Report Suspicious Matter Reports (SMRs), Threshold Transaction Reports (TTRs), and International Funds Transfer Instructions (IFTIs).
• Maintain risk-based AML/CTF programs reviewed regularly.
• Keep accurate records of alerts and investigations.
• Ensure systems are fit for purpose and scalable for real-time environments.

AUSTRAC’s focus for 2025 includes data quality, real-time monitoring, and stronger collaboration across the banking ecosystem.

Core Components of an Effective Fraud Prevention Framework

1. Real-Time Transaction Monitoring

Banks must detect suspicious activity at the same speed it occurs. Real-time engines analyse patterns, behavioural changes, and anomaly scores within milliseconds.

2. AI-Driven Risk Models

Machine learning enables systems to recognise emerging typologies without human retraining. It also minimises false positives that overwhelm investigators.

3. Behavioural Biometrics

By tracking keystrokes, device usage, and navigation patterns, banks can distinguish legitimate customers from impostors.

4. Sanctions and PEP Screening

Every transaction must be checked against global and AUSTRAC watchlists to ensure no prohibited entities are involved.

5. Integrated Case Management

Alerts should automatically route to investigators with all contextual data attached. Efficient workflows shorten investigation cycles.

6. Regulatory Reporting Automation

Tools should generate regulator-ready SMRs and TTRs instantly, complete with full audit trails.

Challenges Facing Australian Banks

• Data Silos: Fragmented systems prevent unified risk visibility.
• False Positives: Poorly tuned models waste resources.
• Legacy Infrastructure: On-premise tools lag behind cloud-native innovation.
• Talent Shortages: Skilled AML and fraud professionals are in short supply.
• Rising Costs: Compliance budgets continue to climb as regulations tighten.

Case Example: Community-Owned Banks Leading by Example

Community-owned institutions like Regional Australia Bank and Beyond Bank show that effective fraud prevention is achievable without Tier-1 budgets. By adopting AI-powered compliance platforms, they have reduced false positives, improved fraud detection, and ensured consistent AUSTRAC reporting while maintaining customer satisfaction.

These banks demonstrate that proactive investment in modern fraud prevention tools builds both regulatory confidence and community trust.

Spotlight: Tookitaki’s FinCense

FinCense, Tookitaki’s end-to-end compliance platform, is redefining fraud prevention for Australian banks.

• Real-Time Monitoring: Detects suspicious transactions instantly across NPP, PayTo, cards, and remittances.
• Agentic AI: Learns from new fraud patterns and explains decisions transparently to regulators.
• Federated Intelligence: Shares anonymised typologies contributed by global experts in the AFC Ecosystem.
• FinMate AI Copilot: Assists investigators with summarised cases and regulator-ready reports.
• Cross-Channel Coverage: Connects AML, fraud, and onboarding data for a 360-degree risk view.
• AUSTRAC Alignment: Automates SMRs, TTRs, and IFTIs with full audit trails.

FinCense helps institutions move from reactive monitoring to predictive protection.

Best Practices for Banks Strengthening Fraud Prevention

1. Invest in Explainable AI: Ensure models are transparent and auditable.
2. Integrate AML and Fraud Functions: A unified risk approach reduces duplication.
3. Adopt a Risk-Based Approach: Focus resources on higher-risk customers and transactions.
4. Enhance Data Quality: Clean, standardised data improves model accuracy.
5. Train Teams Continuously: Keep investigators informed of emerging typologies.
6. Engage with Regulators Early: Open dialogue with AUSTRAC ensures compliance confidence.
7. Collaborate Across the Industry: Join federated intelligence networks to identify threats early.

The Future of Fraud Prevention in Australian Banking

1. AI-Native Compliance Systems
   Next-generation platforms will use large-language-model agents and adaptive learning to handle investigations autonomously.
2. Deeper PayTo Integration
   Fraud prevention tools will expand to cover payment agreements and consent-based authorisations.
3. Industry-Wide Data Collaboration
   Banks will share anonymised typologies through federated learning frameworks.
4. Focus on Digital Identity
   Biometric and behavioural identity verification will become mandatory safeguards.
5. Customer-Centric Security
   Future systems will prioritise frictionless protection that enhances user experience.
6. Regulatory Co-Creation
   Regulators and banks will work together to design adaptable compliance frameworks that encourage innovation.

Conclusion

Fraud prevention in the Australian banking industry is entering a new era. As instant payments, digital identities, and cross-border transactions expand, banks must move beyond legacy systems to intelligent, adaptive solutions.

Community-owned banks like Regional Australia Bank and Beyond Bank prove that innovation and compliance can coexist. Platforms such as Tookitaki’s FinCense combine real-time analytics, Agentic AI, and federated intelligence to help institutions outsmart criminals, reduce costs, and build trust.

Pro tip: In modern banking, fraud prevention is not just about stopping scams. It is about preserving the trust that underpins every financial relationship.

The right vendor is not just selling software, they are safeguarding your institution’s future.

In the Philippines, the pressure to fight financial crime is mounting. The exit from the FATF grey list in 2024 signaled progress, but also raised expectations for financial institutions. Banks, fintechs, and remittance companies are now required to show that they can identify suspicious activity quickly and accurately. At the heart of this challenge is transaction monitoring software. And choosing the right vendor is as important as the technology itself.

Why Transaction Monitoring Matters More Than Ever

Transaction monitoring enables financial institutions to detect unusual or suspicious activity in real time or through batch analysis. It flags patterns such as structuring, round-tripping, or high-risk cross-border flows that may signal money laundering or fraud.

In the Philippines, several factors make monitoring critical:

• Large remittance inflows vulnerable to structuring and layering.
• High fintech adoption with e-wallets and digital banks processing instant payments.
• Cross-border risks as syndicates exploit correspondent banking channels.
• Heightened regulatory oversight from the BSP and AMLC.

For institutions, the right transaction monitoring system can be the difference between meeting compliance standards and facing regulatory penalties.

The Role of Transaction Monitoring Software Vendors

Software alone is not enough. Vendors provide the platforms, expertise, and ongoing support that make monitoring effective. A vendor is not just a provider, they are a partner in compliance. Their responsibilities include:

• Developing adaptive monitoring technology.
• Ensuring local regulatory alignment.
• Offering integration with core banking systems.
• Providing training and customer support.
• Continuously updating typologies and detection rules.

The choice of vendor directly impacts both compliance outcomes and operational efficiency.

What to Look For in Transaction Monitoring Software Vendors

When evaluating vendors in the Philippines, institutions should consider several factors:

1. Regulatory Alignment

Vendors must demonstrate familiarity with BSP and AMLC requirements, including STR filing standards, risk-based monitoring, and audit readiness.

2. Technology and Innovation

Modern systems should offer AI-driven monitoring, machine learning for anomaly detection, and explainability to satisfy regulators.

3. Local and Regional Expertise

Vendors should understand the Philippine market as well as regional risks such as cross-border laundering and remittance abuse.

4. Integration Capabilities

Seamless integration with legacy banking infrastructure is essential to ensure a single view of customer activity.

5. Scalability

Solutions should support institutions of different sizes, from rural banks to major commercial players.

6. Customer Support and Training

Strong after-sales support ensures that compliance teams can use the software effectively.

7. Collaborative Intelligence

The ability to share typologies and scenarios across banks without compromising data privacy enhances overall industry defences.

How Vendors Help Address Philippine Money Laundering Typologies

Top vendors ensure their systems detect common schemes in the Philippines:

• Remittance Structuring detected through repeated small-value transfers.
• Shell Companies exposed via unusual business-to-business transactions.
• Casino Laundering flagged through inconsistent deposit and withdrawal patterns.
• Trade-Based Laundering identified through mismatched invoices and payments.
• Terror Financing uncovered through frequent low-value transfers to high-risk geographies.

Challenges in Choosing Transaction Monitoring Vendors

Selecting the right vendor is not straightforward. Institutions face obstacles such as:

• Vendor Lock-In: Some vendors limit flexibility by tying institutions to proprietary technology.
• High Implementation Costs: Advanced solutions can strain budgets of smaller institutions.
• Complex Integration: Connecting to legacy core banking systems can delay deployment.
• Skill Gaps: Compliance teams may lack experience with sophisticated monitoring platforms.
• Evolving Threats: Vendors that fail to update systems regularly leave institutions exposed.

Best Practices for Selecting a Vendor

1. Conduct a Needs Assessment
   Identify specific risks, regulatory requirements, and resource constraints before shortlisting vendors.
2. Evaluate Proof of Concept (POC)
   Run test cases with vendors to see how their systems perform against real scenarios.
3. Prioritise Explainability
   Choose vendors that offer systems with clear reasoning behind flagged alerts.
4. Check Industry References
   Look for testimonials or case studies from other Philippine or ASEAN banks.
5. Focus on Partnership, Not Just Product
   A strong vendor offers training, updates, and support that extend beyond installation.

Global vs Local Vendors: Which Is Better?

Philippine institutions often face a choice between global and local vendors. Each has strengths:

• Global Vendors bring advanced AI, scalability, and a track record across markets. However, they may lack local context or flexibility.
• Local Vendors understand BSP and AMLC regulations and the Philippine market intimately, but may lack the resources or innovation speed of global players.

The best choice often depends on institution size, complexity, and risk appetite. Hybrid approaches, such as global technology with local implementation support, are increasingly popular.

The Tookitaki Advantage: A Vendor with a Difference

Tookitaki’s FinCense is more than just a transaction monitoring solution. It is built as a trust layer for financial institutions in the Philippines.

Why Tookitaki stands out among vendors:

• Agentic AI-Powered Detection that adapts to new laundering and fraud typologies.
• Federated Intelligence from the AFC Ecosystem, offering insights contributed by global compliance experts.
• False Positive Reduction through behavioural analytics and adaptive thresholds.
• Smart Disposition Engine that automates investigation summaries for STR filing.
• Explainable Outputs aligned with BSP and AMLC expectations.
• Proven Regional Experience with banks and fintechs across Asia-Pacific.

As a vendor, Tookitaki does not just deliver software. It partners with institutions to build resilient compliance frameworks that evolve with threats.

Conclusion: Choosing Vendors as Compliance Allies

In the Philippines, the stakes for compliance have never been higher. Choosing the right transaction monitoring software vendor is not just a procurement decision, it is a strategic move that defines an institution’s ability to fight financial crime.

The best vendors combine advanced technology with local expertise, strong support, and a collaborative mindset. They help banks move beyond compliance checklists to build trust, resilience, and growth.

Philippine institutions that partner with the right vendor today will not only meet regulatory requirements but also set the foundation for sustainable, secure, and customer-centric banking in the digital age.

With AUSTRAC raising expectations, Australian banks and fintechs need AML vendors who can deliver real-time, AI-driven compliance solutions.

Introduction

Australia’s financial sector is under mounting pressure to combat money laundering and terrorism financing. In recent years, AUSTRAC has intensified its supervision, issuing multi-million-dollar penalties to banks and casinos for failing to detect suspicious activity. At the same time, fraud typologies are becoming more sophisticated, with scams exploiting instant payments, mule accounts, and cross-border channels.

Against this backdrop, financial institutions must choose AML vendors that can keep pace with evolving risks. But not all vendors are created equal. The right partner should not only ensure compliance with AUSTRAC requirements but also strengthen customer trust and operational efficiency.

This blog explores the AML vendor landscape in Australia, what to look for in a partner, and why next-generation solutions like Tookitaki’s FinCense are setting a new benchmark for compliance.

The AML Landscape in Australia

1. Rising Compliance Expectations

AUSTRAC requires banks, fintechs, and remittance providers to implement robust AML/CTF programs, including transaction monitoring, sanctions screening, and suspicious matter reporting. Failures can result in fines and reputational harm.

2. The Real-Time Payments Challenge

The New Payments Platform (NPP) and PayTo enable instant transfers, forcing institutions to adopt real-time AML monitoring. Traditional batch-based tools are no longer sufficient.

3. Scam Epidemic

Australians lost more than AUD 3 billion in 2024 to scams, much of it facilitated through banking and payment systems. AUSTRAC has made scam detection part of its supervisory priorities.

4. Diverse Financial Ecosystem

Australia’s market includes Tier-1 banks, fintechs, payment providers, and community-owned banks like Regional Australia Bank and Beyond Bank. Each requires AML vendors that can scale to their size and complexity.

What Are AML Vendors?

AML vendors provide the technology, tools, and expertise financial institutions use to meet compliance obligations. Their solutions typically include:

• Transaction Monitoring Systems (TMS): Detect unusual patterns in customer activity.
• Sanctions and PEP Screening: Screen customers and transactions against global lists.
• Case Management Platforms: Help compliance teams investigate alerts.
• Customer Due Diligence (CDD): Verify customer identities and assess risk levels.
• Regulatory Reporting: Automate submission of Suspicious Matter Reports (SMRs), Threshold Transaction Reports (TTRs), and International Funds Transfer Instructions (IFTIs).
• Analytics and AI Models: Strengthen detection and reduce false positives.

Types of AML Vendors in Australia

1. Legacy Vendors
   • Long-established providers offering rule-based monitoring and screening tools.
   • Strength: Regulatory familiarity.
   • Weakness: Limited adaptability to modern real-time risks.
2. Global Vendors
   • International firms offering standardised AML platforms.
   • Strength: Scale and established presence.
   • Weakness: Solutions may not be tailored to AUSTRAC or the Australian market.
3. Specialist RegTech Vendors
   • Innovative firms like Tookitaki, focusing on AI-driven, cloud-ready, and AUSTRAC-aligned compliance.
   • Strength: Agility, advanced technology, and adaptability.
   • Weakness: Less brand recognition compared to legacy players (though closing fast).

Why Vendor Choice Matters

Choosing the wrong vendor can expose banks to major risks:

• Regulatory Penalties: Inadequate tools increase the chance of AUSTRAC fines.
• Customer Loss: Poor AML controls damage trust.
• Operational Inefficiency: Legacy tools flood investigators with false positives.
• Technology Obsolescence: Outdated systems cannot adapt to instant payments.

The right AML vendor provides not just compliance coverage but also operational efficiency and customer confidence.

Key Features to Look for in an AML Vendor

1. Real-Time Monitoring
   Essential for NPP and PayTo transactions that settle instantly.
2. Agentic AI
   Adaptive, explainable AI that reduces false positives while improving detection.
3. Federated Intelligence
   Access to shared typologies and scenarios across institutions without exposing sensitive data.
4. Regulatory Alignment
   Automated SMRs, TTRs, and IFTIs that meet AUSTRAC’s standards.
5. Case Management Integration
   Seamless workflows linking transaction alerts to investigations.
6. Cross-Channel Coverage
   Monitoring across banking, cards, wallets, remittances, and trade finance.
7. Explainability and Transparency
   Tools must produce outputs regulators can understand and audit.
8. Scalability
   Solutions must work for Tier-1 banks as well as smaller community-owned institutions.

Red Flags in AML Vendors

• Reliance on static, rules-based monitoring.
• Limited or outdated sanctions list integrations.
• No support for real-time NPP or PayTo screening.
• High false-positive rates with little model adaptability.
• Weak case management or lack of automation.
• Minimal presence in the Australian market.

Case Example: Community-Owned Banks Leading with Smarter Vendors

Community-owned banks such as Regional Australia Bank are proving that advanced AML tools are not only for Tier-1 players. By adopting next-generation vendor solutions, they have improved suspicious matter detection, reduced operational costs, and strengthened AUSTRAC reporting — all while building customer trust.

Spotlight: Tookitaki’s FinCense

FinCense, Tookitaki’s all-in-one compliance platform, is setting a new standard among AML vendors in Australia.

• Real-Time Detection: Screens NPP, PayTo, and cross-border transactions in milliseconds.
• Agentic AI: Continuously adapts to emerging laundering typologies while reducing false positives.
• Federated Intelligence: Leverages global scenarios from the AFC Ecosystem for stronger protection.
• Automated Regulatory Reporting: Generates AUSTRAC-ready SMRs, TTRs, and IFTIs with full audit trails.
• Integrated Case Management: Streamlines investigations with FinMate AI Copilot assisting compliance officers.
• Cross-Channel Coverage: Consolidates monitoring across banking, remittance, wallets, and cards.

With FinCense, Australian banks and fintechs can modernise compliance while lowering operational costs.

Best Practices for Selecting AML Vendors

1. Assess Local Fit: Ensure the vendor understands AUSTRAC and the Australian regulatory environment.
2. Prioritise AI and Automation: Reduce false positives and investigator workload.
3. Insist on Explainability: Ensure AI outputs can be audited and defended.
4. Look for Federated Intelligence: Gain insights from industry-wide typologies.
5. Evaluate Case Management Tools: Strong integration speeds up investigations.
6. Consider Cloud Readiness: Cloud-native solutions are faster to scale and upgrade.
7. Check References: Review case studies from institutions similar in size and scope.

The Future of AML Vendors in Australia

1. AI Governance Integration
   Vendors will embed explainable AI frameworks to meet regulator expectations.
2. Industry Collaboration
   Federated learning will become the standard for AML intelligence sharing.
3. Deeper Real-Time Capabilities
   Vendors must adapt fully to instant payments like NPP and PayTo.
4. End-to-End Platforms
   Institutions will prefer vendors offering unified AML and fraud prevention.
5. Cost-Efficient Solutions
   Vendors that reduce compliance costs while improving detection will stand out.

Conclusion

AML vendors are the backbone of compliance in Australia’s financial ecosystem. With AUSTRAC pushing for real-time, data-driven monitoring, institutions can no longer rely on outdated, static tools. The best vendors provide real-time detection, adaptive AI, and federated intelligence, all while ensuring regulatory alignment and operational efficiency.

Community-owned banks like Regional Australia Bank and Beyond Bank demonstrate that smart vendor choices can deliver Tier-1 capabilities without Tier-1 budgets. Platforms like Tookitaki’s FinCense represent the next generation of AML vendors, offering explainable AI, federated learning, and regulator-ready automation.

Pro tip: The best AML vendor is not just a technology provider. It is a strategic partner that helps you stay ahead of criminals while earning the trust of regulators and customers.