Fintech Australia blames budget restraints for Austrac Online's limited capability

According to the fintech industry body, Austrac Online struggles on Apple Mac computers and Google Chrome.

gettyimages-520536934.jpg

Image: Getty Images

Fintech Australia has labelled the burden placed upon Australian regulators fighting against anti-money laundering and counter-terrorism financing (AML/CTF) as "not justifiable" due to the limited resourcing and technology budgets provided by government.

The remarks were made as part of Fintech Australia's submission for a Senate inquiry into the adequacy and efficacy of Australia's AML/CTF regime.

The fintech industry body said the Australian Transaction Reports and Analysis Centre (Austrac), Australia's AML/CTF regulator, has struggled to respond to and rely upon the various regulatory reports it receives due to resourcing and technology budgeting reasons.

According to Fintech Australia, these "data rich" reports could result in "actionable insights and intelligence" that both inform Austrac and give the regulator more information to help it provide feedback to institutions.

"Austrac's inability to respond to and rely upon these reports is simply a result of their resourcing and technology budget being incommensurate with the task of synthesising this number of complex reports into actionable insights and intelligence," Fintech Australia wrote in its submission.

It pointed to the limited investment in Austrac Online -- the regulator's front-end system through which reporting entities must submit reports, and Austrac's back-end systems.

"While Austrac are presently investing in uplifting these systems, the fact remains that this comes after reporting entities have invested hundreds of millions of dollars at their end to attempt to streamline the reporting process, while Austrac Online still cannot cater adequately to Apple Mac computers or the Google Chrome internet browser," it wrote.

Fintech Australia also claimed Australia was lagging behind other countries, such as New Zealand and the United Kingdom, in its AML/CTF capabilities due to the limited resourcing and tech budgets. Due to this, Fintech Australia said there has been a distinct theme of foreign nationals purchasing real estate in Australia for the purpose of investment or tax evasion, rather than genuine interest in utilising the property.

"While so much emphasis is put on the requirement of reporting entities to identify ultimate beneficial owners and verify the source of funds and wealth of customers, it seems that the fact foreign nationals are transferring large amounts of money into Australia and integrating into our financial system without being subjected to the same rigorous checks and balances as other persons is not commensurate and seemingly selective of a specific high-net worth cohort," it wrote.

Fintech Australia noted, however, that this claim was based more on observation rather than empirical evidence.

Last week, Fintech Australia CEO Rebecca Schot-Guppy told a separate Senate committee that 150 of her organisation's members have been debanked by banks and financial institutions in Australia, with no reason provided or ability to appeal the decision.

"I've got at least 40 anecdotal issues, but I'd say that there's least 150 of them that have been debanked over time," Rebecca Schot-Guppy told the Select Committee on Australia as a Technology and Financial Centre.

Schot-Guppy attributed the debanking to AML/CTF concerns and anti-competitive behaviour from the banks.

RELATED COVERAGE