AUSTRAC releases mutual banking sector money laundering and terrorism financing risk assessment
Australia’s mutual banking sector is urged to take note of Australia’s latest money laundering and terrorism financing risk assessment report specific to the sector.
Released by AUSTRAC today the report finds that while the mutual banking sector had a high level of vulnerability to financial crime, the overall money laundering and terrorism financing risk was assessed as medium.
The report, developed by AUSTRAC, in partnership with the mutual banking sector, shows the main threat to the sector is money laundering. Mutual banks are also a target for fraudulent activity such as identity theft and scams, tax evasion, and welfare fraud, particularly through their elderly customers.
The risk assessment is the latest in a series of money laundering and terrorism financing risk assessments developed to assist Australia’s financial services industry to identify, understand and disrupt serious criminal activity targeting Australia’s financial system.
AUSTRAC CEO, Nicole Rose PSM said AUSTRAC expects the mutual banking sector will use these findings to protect their businesses and the Australian community from criminal threats.
“Money laundering and financial crime enables serious criminal activity such as drug trafficking, human trafficking and fraud which causes real life harm to our communities. The financial sector must do their part to protect the Australian community from these threats,” Ms Rose said.
“Australians are increasingly using the mutual banking sector as a trusted, community-focussed alternative to the major banks. As the sector continues to grow and consolidate, so too will its exposure to criminal exploitation.
“Mutuals are working closely with AUSTRAC on their compliance, and provide us with a wealth of intelligence from the sector, giving us a full picture with which to build the resilience of Australia’s financial system against criminal exploitation.”
Customer Owned Banking Association (COBA) CEO Michael Lawrence said the customer owned banking sector is vigilant about meeting its AML/CTF obligations and COBA welcomes this assessment as a useful input for our members.
The Money Laundering and Terrorism Financing Risk Assessment of Australia’s Mutual Banking Sector is available on the AUSTRAC website.
In July 2018, the Australian Government provided $5.1 million to AUSTRAC to undertake an expanded three-year program of work to deliver risk assessments that focus on Australia’s largest sectors: banking, gambling and remittance service.
Mutual banks are owned by their customers, with profits returning to customers rather than being distributed to shareholders. Four million Australians and businesses bank with mutuals holding some $101 billion in deposits and $119 billion in assets.
AUSTRAC uses financial intelligence and regulation to disrupt money laundering, terrorism financing and other serious crime.
AUSTRAC’s dual regulatory and intelligence functions work hand in hand to protect Australia’s financial system.
Serious crime is motivated by profit, and no matter the size, almost all criminal acts leave a financial trail and AUSTRAC has the right tools and expertise to follow these trails.
Our regulatory function ensures we get high quality data and entities comply with their obligations. It requires the financial sector to put in place systems and controls that protect them from criminal abuse, while also reporting on financial transactions and suspicious activity.
This provides AUSTRAC’s intelligence analysts with the information they need to identify risks and develop intelligence products that support law enforcement and national security operations and investigations.
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