Austrac builds intelligence future

Graeme Philipson

Austrac, the Australian Government’s anti-money laundering and counter-terrorism financing agency wants to get better engaged with the financial sector and the broader community.

The agency has been undergoing a significant cultural change, says newly-appointed director of strategic initiatives Pia Waugh.

“We are looking at new ways of doing things to help us meet the exponential growth in the financial sector in the 21st century.”

Pia Waugh: Is pushing government tech in ways that are far in advance of the rest

“Our first priority is to identify problems and opportunities we share with the private sector and other government entities. Then we try to take a shared approach to designing and implementing new systems, and to share the risk.

“Rather than say that ‘we are the regulator and you are the regulated’, we start from the premise that we all have shared interests, and shared problems that we want to solve.

“And that if we solve them together we will get a better outcome for everybody, including the community.”

She wants to make Austrac data more “programmatically” available to the financial sector and the community.

“We want to enable an ecosystem that can exponentially scale our efforts, so that other parties, like banks and fintechs and even citizens, can do their part to contribute to a stronger financial system, and better detect and disrupt any abuse of that system.

“Everyone has a part to play. The traditional siloed approach does not scale. We’re not trying to do everything ourselves.”

The third initiative is to adopt a “data first” approach to Austrac’s regulation. “If we are able to better analyse our data then maybe we can make a more targeted approach to regulation.”

“There is a lot of data out there, and a lot of ability in the broader financial sector that we can tap into to solve the big problems. We should try those first, to take a more streamlined targeted and effective approach to regulation.”

It is a big job, and getting bigger. Last year Austrac received more than 78,000 reports on suspicious financial transactions. Other government agencies conducted nearly a million online activities using Austrac’s database – 5,000 each day, or 3.4 searches every minute.

As a regulator Austrac oversees the compliance of more than 14,000 Australian businesses ranging from major banks and casinos to bullion dealers and remittance service providers. With a massive growth in the financial sector it is looking at new ways of gathering information and dealing with the wider financial community.

Austrac information contributed to 3,990 ATO cases last year, resulting in $152 million in revenue from income tax assessments. Austrac information also contributed to 287 Department of Human Services cases, achieving total annualised savings of $8.3 million associated with welfare fraud.

The agency also works with agencies in other countries to counter cross-border financial crimes.

Ms Waugh is well known in the industry as an open systems and open data advocate. She was formerly technology policy advisor to ALP Senator Kate Lundy, and subsequently played a senior role in the Australian Government Information Management Office (AGIMO) Gov 2.0 project.

Austrac’s data sharing efforts are starting to take shape. Earlier this month it enabled a web-based system to allow startups and fintech companies to seek advice on Australia’s AML/CTF regime. CEO Paul Jevtovic said that the agency recognises that the growth of innovative companies meant that many new financial services were now being offered.

“We want to assist new or non-regulated businesses to understand more about the AML/CTF regulatory framework and how it may affect their business,” Mr Jevtovic said.

“We encourage and support innovation in the finance sector, but we also have a responsibility to prevent and manage money laundering and terrorism financing risks and vulnerabilities.

“To achieve these objectives, we ask businesses to engage with us openly so we’re able to understand what they do, how they do it, and the possible benefits and risks of their products. We want to supporting and contributing to innovation and the benefits it can bring to the Australian community.

“The financial industry is our first line of defence. We want to work in partnership with the industry to address the global challenge of countering serious and organised crime.

“Importantly, we want to create an environment that is both conducive to innovation within industry, but also resilient enough to safeguard the integrity of Australia’s financial system and the economy.”

Do you know more? Contact James Riley via Email.

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