Face Verification
Address Verification
Document Verification
Age Verification
VideoIdent
Fast ID
eIDV
NFC Verification
Consent Verification
Business Verification
Due Diligence
Investor Verification
E-Signature
Behavioural Biometrics
Device Fingerprinting
MFA
AML Screening
Business AML Screening
User Risk Assessment
Transaction Screening
Adverse Media Screening
Identity Verification
KYC
KYB
KYI
Fraud Prevention
Bonus Abuse
Deepfakes
Multi-Accounting
Banking
Crypto
Fintech
Forex
Gaming
Gig Economy
Marketplace
Social Networks
Product Managers
Compliance Officers
Fraud Analyst
Global Trust Platform
Journey Builder
Vendor Comparison
Content library
Blogs
News
Reports
Insights
Knowledgebase
ROI calculator
Blind Spot Audit
Deepfake Detector
Liveness Detection
Document Originality
Document Deepfake
Events & Webinar
Podcast Studio
Spotlight Studio
API Documentation
Mobile SDKs
Service Status
Help Center
Contact Us
Technical Support
Compliance
Supported Documents
About
Career
Press Release
Certifications
Partnership
Awards
AUSTRAC Denounces De-banking Practices To Prevent Financial Crimes
AUSTRAC stated that de-banking is a complex global problem as it multiplies the risks faced by financial institutions and businesses.
According to the Australian Transaction Reports and Analysis Centre (AUSTRAC), the past decade has seen a growth in the extent of businesses being adversely affected as a result of the loss or limited access to financial services.
De-banking is being seen in FinTech companies, cryptocurrency exchanges, and not-for-profit organizations (NPOs) with bank account closures negatively affecting the customers as well as the businesses.
“The effect of de-banking of legitimate and lawful financial services businesses can increase the risks of money laundering and terrorism financing and negatively impacts Australia’s economy,” says AUSTRAC.
The Australian authority also highlighted that bank account closures resulted in decreased collaborations between businesses and banks, thereby making it tougher to differentiate between lawful and unlawful activities.
De-banking activities lead criminal activity underground and compound the risks criminals pose to Australia’s financial system and the community.@AUSTRAC https://t.co/qOCsbERSft
— Regulation Asia (@RegulationAsia) November 1, 2021
Due to bank account closures and changing financial institutions, banks find it difficult to keep track of transaction types and volumes.“For this reason, AUSTRAC continues to discourage the indiscriminate and widespread closure of accounts across entire financial services sectors.”
Although the new and emerging businesses face risks of vulnerability to financial crime, they contribute positively to Australia’s community and economy. AUSTRAC says that the businesses looking to avoid risk management should not have their accounts closed.
“AUSTRAC expects businesses operating in these susceptible sectors to understand and meet their anti-money laundering and counter-terrorism financing and other regulatory obligations,” says AUSTRAC.
“These sectors must improve risk management and ensure they have appropriate systems in place to help them identify, track and disrupt criminal exploitation of the financial sector.”
Along with other recommendations, the committee has also approached the government to demand a “clear process” for de-banked businesses in order to ensure transparency and certainty on de-banking.
“Debanking is debilitating. It destroys the ability of Australia’s small business to disrupt and deliver new ideas,” said the committee chair Senator Andrew Bragg.
“The committee has delivered a market solution to debanking through consumer protection laws and the insertion of the Australian Financial Complaints Authority.”
Suggested read: AUSTRAC’s ML/TF Risk Assessment Report on Major Banks [Part 1]
