Compliance Hub

Anti-Money Laundering (AML) in 2024: A Guide for Banks and Fintechs

Site Logo
Tookitaki
11 min
read

Anti-money laundering (AML) are regulative measures and procedures to detect and prevent money laundering and making it difficult for financial criminals to hide their illegal origin. Money laundering has potentially devastating socioeconomic effects as laundered money can be used to gain control of large sectors of the economy through investment. It can also transfer economic power to criminals.

By hiding the source of their funds, criminals evade government tax. As a result, we have to pay more taxes because of those who evade taxes. It also increases government expenditure on increased law enforcement and health care (for example, for treatment of drug addicts). Therefore, AML has become a key area of action for governments across the globe.

As the lifeblood of a country’s financial system, financial institutions such as banks and fintechs have a major role to play in preventing money laundering. Governments prepare AML norms policies for them, periodically check the institutions’ compliance with the norms and punish them in case of lapses or shortcomings.

In this article, we will discuss the key concepts and terms in AML compliance and explore how banks and fintechs ensure AML compliance at a time when regulators change regulations and criminals use sophisticated financial crime strategies to evade detection.

What is money laundering?

Most of the illegal or criminal activities such as illegal arms sales, smuggling, and the activities of organised crime, including, for example, drug trafficking and prostitution rings, generate millions of dollars in cash. The individuals or groups involved create ways of “laundering” the money to obscure the illegal nature of how it is obtained.

Money laundering has been addressed in the UN Vienna 1988 Convention Article 3.1 describing Money Laundering as:

“The conversion or transfer of property, knowing that such property is derived from any offense(s), for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in such offense(s) to evade the legal consequences of his actions”.

According to the United Nations Office on Drugs and Crime (UNODC), the estimated amount of money laundered globally in one year is 2 – 5% of global GDP, or $800 billion – $2 trillion in current US dollars.

Read more about money laundering

What are some largely used money laundering techniques?

Layering in Money Laundering

50 shocking statistics about money laundering

 

What is Anti-Money Laundering (AML)?

The social consequences of money laundering are far-reaching and potentially highly destabilizing for a state. To prevent, detect and combat money laundering from criminal enterprises, drug dealers, corrupt public officials, and terrorists both financial institutions and governments adopted a counter-move – defensive regulatory Anti-Money Laundering (AML) policy.

Anti-money laundering (AML) is a combination of laws, regulations and procedures used by a financial institution to prevent money laundering. Effective anti-money laundering regulations and procedures are of great importance to protect the integrity of markets and the global financial framework. AML policies help banks and other financial institutions combat a mutitude of financial crimes.

Read more about Anti-Money Laundering

What is an AML Compliance Programme?

The AML compliance programme is everything an organization does in relation to compliance: be it built-in internal operations, user-processing policies, accounts monitoring and detection, or reporting of money laundering incidents. The main agenda of an AML compliance programme is to expose and react accordingly to inherent and residual money laundering, terrorist financing, and fraud-related risks.

An AML compliance programme involves a set of measures and regulations an organization must follow when it comes to preventing financial crimes. Each financial institution has its own unique landscape and challenges when it comes to the prevention of money laundering. Geographical peculiarities, international, national and state regulations, and the nature of clients are some of the factors that an institution should take into consideration while drawing up an AML compliance programme.

Read more about AML Compliance Programme

Assessing AML Compliance at Neobanks: Issues and Solutions

Getting Ready for Future: An AML Compliance Guide for Fintechs

Is your AML compliance software making your bank lose money?

Key processes within an AML compliance programme

In general, AML regulations mandate financial institutions to collect customer information, verify their identities to avoid risk, monitor and screen their transactions and report suspicious activity to regulators. We will look into each of these processes in detail in the below section.

Know Your Customer (KYC)

Know Your Customer or KYC is defined as the process that institutions use to verify the identities of their customers and come to a conclusion on the financial crime risk they may pose. In some countries, KYC is expanded as Know Your Client.

KYC is a fundamental process in any financial institution’s anti-money laundering programme. This greatly helps financial institutions to adequately assess the risk associated with each client. For example, all customers of a bank must be verified before they can use services such as checking accounts and credit cards. Fintech companies are mandated to gather ample, verifiable information on their client and their identity in order to determine their legitimacy before beginning any business activities.

Read more about KYC

KYC-AML: Meaning and difference

What is KYC Remediation?

 

Customer Due Diligence (CDD)

Customer Due Diligence is the process of evaluating customers’ backgrounds in order to identify their identification and risk level. This is accomplished by analysing a customer’s name, official document photograph, and home address. CDD authenticates a client’s identification and the business in which they are involved to have enough trustworthiness.

Read more about Customer Due Diligence

Customer Due Diligence (CDD) for Banks and Financial Services

A Guide To Enhanced Due Diligence (EDD)

Name Screening

Name screening is the process of determining if a financial institution’s existing or future customers (both individuals and entities) are named in any blacklists or regulatory lists such as sanction lists. Customers need to be screened against a number of watchlists at the time of onboarding and at specific intervals to identify the risk they pose and stop doing business with them.

Financial institutions are required to have enhanced due diligence procedures for certain customer categories who may pose a higher risk from a money laundering perspective. They include Politically Exposed Persons (PEPs) and customers located in high-risk jurisdictions. Further, adverse media checks or negative news checks allow the financial institution to screen their customers, party, or entity with other published news articles or prosecutions.

Read more

What is a Sanctions List?

How to Maintain Effective Sanctions Screening?

The Importance of Adverse Media in an AML Environment

What Are Politically Exposed Persons (PEPs)

Transaction Screening

The transactions enabled by banks and other financial institutions are not limited to their own customers. For example, one customer of Bank A can transfer money or make payments to Bank B’s customer. A large sized bank mediates millions of such transactions on a daily basis.

If a financial institution mediates a transaction to or from a sanctioned person or entity that will lead to regulatory action and severe damage to reputation. In order to avoid this, they have transaction screening systems in place. These systems monitor all customer deposits and other transactions to ensure they are not part of a money laundering scheme. Regulators normally set thresholds for different types of transactions (For example, cash transactions exceeding $10,000 in the US). Financial institutions need to verify the origin of large amounts dealt in and report to regulators if they prove to be abnormal.

Transaction Monitoring

The transaction monitoring process involves scanning transactions manually or electronically based on numerous characteristics such as customer and beneficiary identities, volume, amount, country of origin, and destination. This assesses if the information matches the bank’s current understanding of the customer. The goal of AML transaction monitoring is to notify the bank of any odd business contacts or activity so that it may report money laundering and suspicious transactions.

Read more about Transaction Monitoring

Transaction Monitoring in Fintech: Challenges and Solutions

Suspicious Activity Reporting

To combat money laundering and the financing of terrorism, it is the duty of financial institutions to report any suspicious transactions or activities to authorities following a thorough investigation. For most countries, this takes the form of a document submitted by a financial institution to the appropriate authority, according to compliance regulations for that country.

Documents filed are known as suspicious activity reports (SAR), or sometimes suspicious transaction reports (STR). These documents help law enforcement agencies to trace a financial crime and bring the perpetrators in front of the law. In order to investigate and report suspicious activities effectively, it is important for financial institutions to have a clear audit trail, which would also help regulators for their scrutiny.

Read more about Suspicious Activity Reporting

Record Keeping

Every stage of the AML process should be recorded and stored for future use as part of due diligence. Financial institutions should periodically reassess customer risks based on these records. They should include essential information from the time of onboarding to screening, monitoring and SAR submissions.

AML Training

AML training forms a key component of an AML compliance programme. Periodic training programmes should be conducted for the compliance staff to identify emerging suspicious activity that leads to money laundering. These programmes should also help employees to be familiar with the latest compliance regulations.

 

Who is an AML Compliance Officer?

It is imperative that financial institutions and banks hire an AML Compliance Officer to oversee internal anti-money laundering policies and ensure compliance with important criteria. Anti-money laundering (AML) compliance officers operate as guardians of regulatory compliance within financial institutions and are frequently viewed as the last line of defence against financial crime. An AML Compliance Officer supervises the development and implementation of their institution’s anti-money laundering policy in order to achieve compliance.

The officer also provides oversight for the AML compliance program and acts as a liaison for the financial authorities. The AML compliance officer should be a senior employee with the expertise and authority to carry out their role effectively.

Read more about AML Compliance Officer

Money Laundering Reporting Officer (MLRO): Importance of the job and key duties

Adverse impacts of AML non-compliance

While financial institutions are legally bound to adhere to the AML regulations within their country, not all of them seem to be keen in following these norms. Some institutions think that implementing AML compliance programmes is costly, time consuming and cumbersome.

However, financial regulators are strictly scrutinising the compliance programmes of financial institutions for any irregularities especially after the 2001 financial crisis. They are also handing out hefty fines to those institutions who are found to have lacklustre compliance and have violated AML regulations intentionally or unintentionally.

In addition to the adverse impacts to profitability, regulatory fines lead to severe damage to reputation and loss of customers. It is important to note that financial institutions take several years to build their reputation and a single lapse would damage it entirely.

Read more

AML Fines 2021: Regulators Continue to Be Strict with Enforcement amid COVID-19

Latest AML Fine Figures

Best AML Compliance Solutions for 2022

An award-winning regulatory technology (RegTech) company, Tookitaki is revolutionising financial crime detection and prevention for banks and fintechs with its leading-edge solutions. A game changer in the space, we improve risk coverage by democratising AML insights via a privacy protected federated learning framework, powered by a network of AML experts.

We provide an end-to-end, AI-powered AML compliance platform, named the Anti-Money Laundering Suite (AMLS), with modular solutions that help financial institutions deal with the ever-changing financial crime landscape. The below graphic shows the four modules that make up the end-to-end operating system and how they support the AML onboarding and ongoing diligence process.

Tookitaki AML Compliance Solutions

The key features of our compliance solutions are given below:

Tookitaki Smart Screening

Our Smart Screening solution provides accurate screening of names and transactions across 18+ languages and a continuous monitoring framework for comprehensive risk management. Its key features include:

    • Ongoing and on-demand screening for names and payments
    • Detects alerts based on complex combinations of rules
    • Watchlist integration

Tookitaki Customer Risk Scoring

The solution features a dynamic customer risk scoring engine which adapts to changing customer behaviour to build a 360-degree risk profile thereby providing a risk based approach to client management. Its major features include:

    • 360-degree customer risk profile
    • Continuous, on-demand and accurate Customer risk scoring
    • Perpetual KYC for ongoing due diligence
    • Actionable insights based on Customer risk score

Tookitaki Transaction Monitoring

Our Transaction Monitoring solution provides comprehensive risk coverage and suspicious activity detection via a one-of-a-kind typology repository and automated threshold management. Its key features include:

    • Scalable community-driven typology library
    • No code, drag-and-drop developer studio for creating new typologies
    • Auto-generated risk indicators and thresholds
    • Identify high-quality alerts using machine learning and risk scoring

Case Manager

The Case Manager provides a centralized investigation workflow for alerts from all AML modules - Smart Screening, Customer Risk Scoring and Transaction Monitoring. Its features include:

    • End-to-end case management solution from investigation to reporting
    • Single integrated platform for alerts from all AML stages
    • Supports the needs of everyone involved in four-eyes checks
    • Supports operations to meet compliance requirements

Apart from necessary human resources, banks and financial services should have technological resources to carry out their AML compliance activities and duties effectively. Tookitaki’s modern software solutions based on artificial intelligence and machine learning can manage the end-to-end of AML compliance programmes. Our solution can improve the efficiency of the AML compliance team and better mitigate compliance risk.

Speak to one of our experts today to understand how our solutions help your compliance teams to effectively detect financial crime and ensure future-ready compliance programmes. 

 

By submitting the form, you agree that your personal data will be processed to provide the requested content (and for the purposes you agreed to above) in accordance with the Privacy Notice

success icon

We’ve received your details and our team will be in touch shortly.

In the meantime, explore how Tookitaki is transforming financial crime prevention.
Learn More About Us
Oops! Something went wrong while submitting the form.

Ready to Streamline Your Anti-Financial Crime Compliance?

Our Thought Leadership Guides

Blogs
29 Aug 2025
5 min
read

AML Vendors in Australia: How to Choose the Right Partner in 2025

With AUSTRAC raising the bar on compliance, choosing the right AML vendor is no longer just a tech decision — it’s a strategic one.

The financial crime landscape in Australia is evolving at lightning speed. Fraudsters are exploiting the New Payments Platform (NPP), crypto exchanges, and cross-border corridors to launder billions. At the same time, AUSTRAC is demanding more from financial institutions, issuing record fines for compliance failures.

In this environment, financial institutions, fintechs, and remittance providers need more than just software. They need reliable AML vendors who can deliver cutting-edge technology, regulatory alignment, and ongoing support. But with so many options on the market, how do you choose the right one?

This blog explores the role of AML vendors, what to look for in a partner, common pitfalls to avoid, and how leading solutions like Tookitaki’s FinCense are changing the compliance game in Australia.

Talk to an Expert

Why AML Vendors Matter More Than Ever

1. Regulatory Scrutiny

AUSTRAC expects institutions to demonstrate not just compliance frameworks, but effective systems. Vendors that can’t prove effectiveness expose institutions to both regulatory and reputational risk.

2. Real-Time Payment Risks

NPP enables instant fund transfers, which fraudsters use to layer funds rapidly. AML vendors must provide real-time monitoring, not overnight batch processing.

3. Expanding Typologies

From mule networks and shell companies to crypto layering and trade-based laundering, criminal methods are growing more complex. AML vendors must constantly update detection capabilities.

4. Rising Costs of Compliance

AML compliance is among the largest operational expenses for Australian institutions. Vendors who reduce false positives and automate reporting can save millions.

What Do AML Vendors Provide?

At their core, AML vendors deliver technology and expertise to help institutions detect, prevent, and report financial crime. Their solutions typically cover:

  • Transaction monitoring (real-time and batch)
  • Customer onboarding and CDD/KYC
  • Sanctions and PEP screening
  • Case management workflows
  • Regulatory reporting (SMRs, TTRs, IFTIs)
  • AI and machine learning for anomaly detection
  • Audit trails and explainability

The best AML vendors also provide local compliance expertise, ongoing updates, and typology intelligence to ensure institutions stay ahead of both regulators and criminals.

ChatGPT Image Aug 26, 2025, 10_00_20 AM

Key Qualities of Top AML Vendors

1. AUSTRAC Compliance Alignment

The vendor must fully align with the AML/CTF Act requirements, including suspicious matter reporting and record-keeping.

2. Real-Time Monitoring

Essential for detecting suspicious activity across instant payments, remittance corridors, and cross-border transactions.

3. AI-Powered Detection

Advanced vendors offer machine learning and anomaly detection to reduce false positives and catch unknown patterns.

4. End-to-End Coverage

From onboarding to investigation, vendors should provide a unified platform covering all AML needs.

5. Explainability & Transparency

Glass-box AI and detailed audit trails ensure compliance teams can explain decisions to regulators.

6. Scalability & Flexibility

The solution must work for Tier-1 banks and fast-scaling fintechs alike. Cloud-native platforms are a plus.

7. Ongoing Support

Vendors should offer training, scenario updates, and local compliance support — not just software deployment.

Pitfalls to Avoid When Choosing AML Vendors

  • Choosing on Price Alone: Low-cost solutions may lack the intelligence and scalability to meet AUSTRAC standards.
  • Overlooking Integration: Systems that don’t integrate smoothly with existing banking cores and case management tools create operational bottlenecks.
  • Ignoring Update Frequency: Vendors who don’t regularly update typologies leave institutions exposed to new threats.
  • Black-Box AI: Lack of explainability increases regulatory risk.

Questions to Ask Potential AML Vendors

  1. How do you align with AUSTRAC compliance requirements?
  2. Do you provide real-time monitoring for NPP transactions?
  3. How do you reduce false positives compared to traditional systems?
  4. Can investigators access explainable alerts and audit trails?
  5. Do you provide ongoing typology updates and training?
  6. What is your track record in the Australian market?

Top Trends Among AML Vendors in 2025

  • Federated Intelligence Sharing: Vendors offering anonymised data sharing across institutions to detect emerging threats.
  • Agentic AI Assistants: Vendors embedding AI copilots to guide investigators in real time.
  • Simulation Engines: Ability to test new detection rules before live deployment.
  • Cross-Channel Risk Visibility: Unified monitoring across banking, payments, trade finance, and crypto.

Spotlight: Tookitaki as a Leading AML Vendor

Tookitaki’s FinCense is positioning itself among the top AML vendors in Australia by offering more than just compliance software:

  • Real-Time Monitoring: Detects fraud and laundering across NPP and cross-border corridors.
  • Agentic AI: Learns from evolving typologies while keeping false positives low.
  • Federated Learning: Insights from the AFC Ecosystem — a global community sharing real-world typologies.
  • FinMate AI Copilot: Generates case summaries, recommends actions, and supports faster investigations.
  • Audit-Ready Compliance: SMRs, TTRs, and detailed audit trails aligned with AUSTRAC standards.
  • End-to-End Platform: Covers onboarding, screening, monitoring, investigations, and reporting.

FinCense isn’t just a tool — it’s a trust layer that helps institutions build resilience, reduce compliance costs, and stay one step ahead of criminals.

Case Study Example: A Regional Australian Bank

A community-owned bank in Australia faced mounting compliance costs and a backlog of false positives. After deploying Tookitaki’s FinCense:

  • False positives dropped by 65%
  • Investigation speed doubled with FinMate’s summaries
  • AUSTRAC audit preparation time reduced from weeks to hours

The result? Lower costs, faster compliance, and stronger customer trust.

Future Outlook for AML Vendors in Australia

  • Closer Regulator Collaboration: Vendors working directly with AUSTRAC to ensure local alignment.
  • AI-First Compliance: Tools moving beyond rules to AI-powered, predictive monitoring.
  • Industry Collaboration: Shared platforms to combat mule networks and cross-border scams.
  • Sustainability: Vendors focusing on cost reduction and efficiency as compliance costs rise.

Conclusion: Choose Vendors That Build Trust, Not Just Tools

For Australian financial institutions, choosing the right AML vendor is a decision that goes beyond software. It’s about securing compliance, building trust, and preparing for an increasingly fast and complex financial crime landscape.

Pro tip: Evaluate vendors not just on features, but on their ability to evolve with both AUSTRAC’s expectations and criminal innovation. The right partner will save money, reduce risk, and future-proof your compliance programme.

AML Vendors in Australia: How to Choose the Right Partner in 2025
Blogs
27 Aug 2025
6 min
read

Fraud Prevention in the Banking Industry: The Australian Perspective

As fraud evolves in speed and sophistication, Australian banks must adopt smarter prevention strategies to protect customers and maintain trust.

Fraud has always been a challenge for banks, but in Australia today, it has become one of the most pressing risks facing the financial sector. With the rise of digital banking, real-time payments through the New Payments Platform (NPP), and cross-border transactions, fraudsters have more opportunities than ever to exploit vulnerabilities.

For banks, preventing fraud is no longer a compliance exercise. It is a business-critical function that directly affects profitability, reputation, and customer trust. This blog takes a closer look at fraud prevention in the banking industry, exploring the risks, regulatory expectations, and the most effective solutions being deployed in Australia.

Talk to an Expert

The Rising Tide of Banking Fraud in Australia

1. The Cost of Fraud to Australians

In 2024, Australians lost more than AUD 3 billion to scams and fraud, according to Scamwatch. A significant portion of these losses flowed through bank accounts, often enabled by authorised push payment (APP) scams and mule networks.

2. Real-Time Payments, Real-Time Risks

The NPP has made everyday banking faster and more convenient, but it has also given fraudsters a new tool. With funds moving instantly, banks have less time to detect suspicious activity, making proactive prevention critical.

3. Sophisticated Criminal Typologies

Fraudsters are no longer lone operators. They work in syndicates, often crossing borders and using advanced tactics such as deepfake impersonations, synthetic identities, and account takeover fraud.

4. Regulatory Scrutiny

AUSTRAC and ASIC have made it clear that banks are expected to have strong fraud prevention frameworks in place. Failing to act not only exposes banks to financial losses but also to regulatory penalties and reputational damage.

Common Types of Banking Fraud in Australia

1. Account Takeover (ATO)

Fraudsters gain control of a customer’s account through phishing, malware, or stolen credentials, then move funds instantly.

2. Authorised Push Payment (APP) Scams

Victims are tricked into authorising payments, often to mule accounts controlled by fraud syndicates.

3. Card Fraud

Both card-present and card-not-present fraud remain prevalent, especially in e-commerce channels.

4. Mule Accounts

Fraudsters use networks of mule accounts to layer and obscure illicit funds. These may be controlled by syndicates or unwitting participants.

5. Insider Fraud

Employees with access to sensitive systems may abuse their position to commit fraud, often in collusion with external actors.

6. Trade and Cross-Border Fraud

International corridors expose Australian banks to risks of trade-based money laundering and fraudulent remittance activity.

Red Flags Banks Must Monitor

  • Sudden changes in transaction behaviour, such as rapid high-value transfers.
  • Accounts that act as pass-throughs, with funds entering and exiting immediately.
  • Multiple accounts linked to the same device or IP address.
  • Customers reluctant to provide source-of-funds documentation.
  • Transfers to newly created or suspicious beneficiary accounts.
  • Unusual login behaviour, such as logins from overseas followed by transactions.

Regulatory Expectations on Fraud Prevention

Australian regulators expect banks to take a proactive, technology-led approach to fraud prevention.

  • AUSTRAC: Requires banks to have robust monitoring systems capable of detecting suspicious activity in real time, especially under the AML/CTF Act.
  • ASIC: Focuses on consumer protection, particularly in cases of APP scams where customers are tricked into transferring funds.
  • Australian Banking Association (ABA): Works with industry participants to develop shared frameworks for fraud detection and scam reimbursement models.
ChatGPT Image Aug 26, 2025, 01_52_51 PM

Best Practices for Fraud Prevention in the Banking Industry

1. Real-Time Transaction Monitoring

Banks must monitor every transaction in real time, scoring risk within milliseconds. This is essential for instant payments under the NPP.

2. AI and Machine Learning

AI-driven systems can adapt to new typologies, reduce false positives, and detect anomalies beyond static rules.

3. Behavioural Analytics

Studying how customers interact with banking platforms helps detect account takeover attempts or bot-driven fraud.

4. Strong Customer Authentication (SCA)

Multi-factor authentication, biometrics, and device fingerprinting reduce the likelihood of unauthorised access.

5. Network and Entity Analysis

By linking accounts, devices, and transactions, banks can uncover hidden mule networks.

6. Integrated Case Management

Centralised investigation platforms streamline workflows, enabling faster decisions and regulator-ready reports.

7. Collaboration and Intelligence Sharing

Banks must work together, sharing fraud data and typologies. Collaborative intelligence strengthens the sector’s resilience against syndicates.

Challenges Facing Banks in Fraud Prevention

  • Balancing Security and Customer Experience: Overly strict controls may frustrate customers, while lax controls create vulnerabilities.
  • Cost of Compliance: Implementing advanced fraud systems is expensive, but far cheaper than paying fines or losing trust.
  • Talent Shortages: Skilled fraud investigators and compliance professionals are in short supply in Australia.
  • Evolving Criminal Tactics: Fraudsters innovate constantly, forcing banks to remain agile and adaptive.

The Role of Technology in Modern Fraud Prevention

Technology is at the heart of modern fraud prevention strategies. Banks are increasingly turning to advanced solutions that combine AI, machine learning, and federated intelligence.

AI-Powered Detection

Machine learning models reduce false positives and detect new fraud patterns without manual intervention.

Federated Learning

Through networks like the AFC Ecosystem, banks can share anonymised typology data, improving detection across the industry without exposing sensitive customer data.

Agentic AI Assistants

AI copilots can summarise cases, recommend next steps, and assist investigators, saving valuable time.

Simulation Engines

Banks can test fraud scenarios against historical data before deploying detection rules live.

Case Example: Community-Owned Banks Leading the Way

Community-owned banks like Regional Australia Bank and Beyond Bank are adopting advanced fraud and AML solutions to strengthen their defences. By leveraging technology platforms such as Tookitaki’s FinCense, these banks are:

  • Detecting mule networks in real time.
  • Reducing false positives and investigation workload.
  • Staying AUSTRAC-ready with explainable alerts and automated reporting.
  • Demonstrating that even mid-sized banks can lead in compliance innovation.

These examples highlight that fraud prevention is not just for Tier-1 banks. Institutions of all sizes can leverage advanced tools to protect their customers and build trust.

Spotlight: Tookitaki’s FinCense for Fraud Prevention

FinCense, Tookitaki’s end-to-end compliance platform, is designed to address the challenges of modern fraud prevention in the banking industry.

  • Real-Time Monitoring: Detects fraud instantly across NPP and cross-border transactions.
  • Agentic AI: Continuously adapts to new fraud typologies with minimal false positives.
  • Federated Intelligence: Accesses real-world scenarios from a global community of compliance experts.
  • FinMate AI Copilot: Summarises cases and recommends actions for investigators.
  • Regulator-Ready Reporting: AUSTRAC compliance built in, with detailed audit trails.
  • Cross-Channel Coverage: Banking transfers, cards, wallets, and crypto monitored from a single platform.

By unifying fraud prevention and AML functions, FinCense reduces operational costs while strengthening resilience against financial crime.

The Future of Fraud Prevention in Australian Banking

Looking ahead, several trends will shape how banks approach fraud prevention:

  • Expansion of PayTo: As this NPP feature grows, new fraud typologies will emerge.
  • Rise of Deepfake Scams: Voice and video impersonation will challenge traditional controls.
  • Shared Fraud Databases: Banks will increasingly collaborate to stop scams mid-flight.
  • Cross-Border Intelligence: With Australia connected to Southeast Asia, cross-border monitoring will be vital.
  • Sustainability of Compliance: AI and automation will help reduce the cost of compliance while improving outcomes.

Conclusion

Fraud prevention in the banking industry is no longer optional or secondary. In Australia’s real-time, always-on financial environment, it is a strategic imperative. Banks that fail to act face not only financial losses but also reputational damage and regulatory penalties.

The path forward lies in adopting real-time, AI-powered fraud prevention platforms that combine detection, investigation, and compliance in a single ecosystem. Community-owned banks like Regional Australia Bank and Beyond Bank are already proving that with the right technology, any institution can meet the challenges of modern fraud.

Pro tip: Don’t just invest in fraud detection. Invest in fraud prevention solutions that adapt, scale, and build trust with your customers.

Fraud Prevention in the Banking Industry: The Australian Perspective
Blogs
26 Aug 2025
6 min
read

Fraud Screening Tools in Australia: Smarter Defences for a Real-Time World

With fraud losses crossing billions, Australian institutions need smarter fraud screening tools to protect both compliance and customer trust.

Fraud is now one of the biggest threats facing Australia’s financial system. Scamwatch data shows Australians lost over AUD 3 billion in 2024 to scams — a figure that continues to rise with digital banking adoption and real-time payment rails like the New Payments Platform (NPP).

Traditional fraud systems, built on static rules, simply can’t keep pace. That’s why financial institutions are turning to fraud screening tools powered by AI and behavioural intelligence to screen transactions, customers, and devices in real time.

But what exactly are fraud screening tools, and how should Australian businesses evaluate them?

Talk to an Expert

What Are Fraud Screening Tools?

Fraud screening tools are systems that automatically review transactions, user activity, and onboarding data to identify and block potentially fraudulent activity. They act as gatekeepers — scoring risk in milliseconds and deciding whether to approve, block, or escalate.

They’re used across industries:

  • Banks & Credit Unions: Screening wire transfers, cards, and online banking logins.
  • Fintechs: Vetting high volumes of digital onboarding and payment activity.
  • Remittance Providers: Screening cross-border corridors for fraud and laundering.
  • E-commerce Platforms: Stopping card-not-present fraud and refund abuse.
  • Crypto Exchanges: Detecting suspicious wallets and transaction flows.

Why Fraud Screening Tools Are Critical in Australia

1. Instant Payments Raise the Stakes

The NPP enables near-instant transactions. Fraudsters exploit this speed to move funds through mule accounts before detection. Tools must screen transactions in real time, not in batch.

2. Scam Surge in Social Engineering

Romance scams, impersonation fraud, and deepfake-driven attacks are spiking. Many involve “authorised push payments” where victims willingly transfer money. Screening tools must flag unusual transfer behaviour even when the customer approves it.

3. Regulatory Expectations

ASIC and AUSTRAC expect robust fraud and AML screening. Institutions must prove that they have effective, adaptive screening tools — not just compliance checklists.

4. Rising Cost of Compliance

Investigating false positives consumes massive resources. The right screening tools should cut operational costs by reducing unnecessary alerts.

Key Features of Effective Fraud Screening Tools

1. Real-Time Transaction Analysis

  • Millisecond-level scoring of payments, logins, and device sessions.
  • Monitors velocity (multiple payments in quick succession), device fingerprints, and geo-location mismatches.

2. AI & Machine Learning Models

  • Detect anomalies beyond static rule sets.
  • Learn continuously from confirmed fraud cases.
  • Reduce false positives by distinguishing genuine unusual behaviour from fraud.

3. Behavioural Biometrics

  • Analyse how users type, swipe, or navigate apps.
  • Identify “bots” and fraudsters impersonating legitimate customers.

4. Multi-Channel Coverage

  • Banking transfers, cards, digital wallets, remittances, and crypto — all screened in one platform.

5. Customer & Merchant Screening

  • KYC/KYB integration to verify identity documents.
  • Sanctions, PEP, and adverse media screening.

6. Explainability & Audit Trails

  • “Glass-box” AI ensures every flagged transaction comes with a clear reason code for investigators and regulators.

7. Case Management Integration

  • Alerts are fed directly into case management systems, enabling investigators to act quickly.
ChatGPT Image Aug 25, 2025, 12_31_37 PM

How Fraud Screening Tools Detect Common Threats

Account Takeover (ATO)

  • Detects logins from unusual devices or IPs.
  • Flags high-value transfers after suspicious logins.

Mule Networks

  • Screens for multiple accounts tied to one device.
  • Detects unusual fund flows in and out with little balance retention.

Synthetic Identity Fraud

  • Flags inconsistencies across ID documents, IP addresses, and behavioural signals.

Romance & Investment Scams

  • Detects repetitive small transfers to new beneficiaries.
  • Flags high-value transfers out of pattern with customer history.

Crypto Laundering

  • Screens wallet addresses against blacklists and blockchain analytics databases.

Red Flags That Tools Should Catch

  • Transactions at unusual hours (e.g., midnight high-value transfers).
  • Beneficiary accounts recently opened and linked to multiple small deposits.
  • Sudden change in login behaviour (new device, new location).
  • Customers reluctant to provide source-of-funds during onboarding.
  • Repeated failed logins followed by success and rapid transfers.

Evaluating Fraud Screening Tools: Questions to Ask

  1. Does the tool support real-time screening across NPP and cross-border payments?
  2. Is it powered by adaptive AI that learns from new scams?
  3. Can it reduce false positives significantly?
  4. Does it integrate with AML systems for holistic compliance?
  5. Is it AUSTRAC-aligned, with SMR-ready reporting?
  6. Does the vendor provide local market expertise in Australia?

The Cost of Weak Screening Tools

Without robust fraud screening, institutions face:

  • Direct losses from fraud payouts.
  • Regulatory fines for inadequate controls.
  • Reputational damage — customer trust is hard to regain once lost.
  • Operational drain from chasing false positives.

Spotlight: Tookitaki’s FinCense Fraud Screening Tools

FinCense, Tookitaki’s end-to-end compliance platform, is recognised for its advanced fraud screening capabilities.

  • Real-Time Monitoring: Screens transactions across banking, payments, and remittances in milliseconds.
  • Agentic AI: Detects known and unknown typologies while minimising false positives.
  • Federated Intelligence: Draws on real-world fraud scenarios contributed by compliance experts in the AFC Ecosystem.
  • FinMate AI Copilot: Provides investigators with instant case summaries and recommended actions.
  • Cross-Channel Coverage: Banking, e-wallets, remittance, crypto, and card transactions all covered in one system.
  • Regulator-Ready: Transparent AI with complete audit trails to satisfy AUSTRAC.

FinCense doesn’t just screen for fraud — it prevents it in real time, helping Australian institutions build both resilience and trust.

Future Trends in Fraud Screening Tools

  • Deepfake & Voice Scam Detection: Identifying manipulated audio and video scams.
  • Collaboration Networks: Shared fraud databases across institutions to stop scams mid-flight.
  • Agentic AI Assistants: Handling end-to-end fraud investigations with minimal human intervention.
  • Cross-Border Intelligence: Coordinated screening across ASEAN corridors, where many scams originate.

Conclusion: Smarter Screening, Stronger Defences

Fraud in Australia is becoming faster, more complex, and more costly. But with the right fraud screening tools, institutions can screen smarter, stop scams in real time, and stay on the right side of AUSTRAC.

Pro tip: Don’t settle for tools that only check boxes. The best fraud screening tools combine real-time detection, adaptive AI, and seamless compliance integration — turning fraud prevention into a competitive advantage.

Fraud Screening Tools in Australia: Smarter Defences for a Real-Time World