Welcome to 'The FinCrime Connection', where we unpack the most significant stories in financial crime.
This month, we examine the alarming rise in child exploitation cases, provide an update on Australia's AML/CTF reforms, and preview the upcoming FIU Conference in New Zealand.
Story 1: Protecting Children: A Critical Priority for Financial Institutions
AUSTRAC has issued a timely reminder to financial services organisations about the importance of identifying child exploitation transactions. Published during National Child Protection Week, the message is clear: detecting and reporting this activity should be front of mind for all reporting entities, all the time.
Child exploitation represents one of the most heinous crimes that financial institutions can help to combat. Beyond the moral imperative, there are significant risks for organisations that fail to identify these transactions. The high-profile case involving Westpac several years ago demonstrated the reputational and financial consequences of inadequate controls in this area.
Where to Find Guidance
Financial institutions looking to strengthen their detection capabilities have several valuable resources available. AUSTRAC's website features numerous articles on child exploitation, providing insight into how these crimes operate and the financial patterns that accompany them.
Law enforcement agencies including the Australian Federal Police and Border Force also publish relevant intelligence that helps build a comprehensive picture of this threat. These sources reveal the devastating impact on victims and the methods perpetrators use to facilitate their crimes.
One particularly useful resource is AUSTRAC's guide, "Combatting the Sexual Exploitation of Children for Financial gain". Whilst published in an Australian context, the information applies equally to New Zealand and other jurisdictions. Child exploitation affects every country, and the financial indicators remain consistent across borders. This guide demonstrates the value of sourcing intelligence from multiple markets to enhance your detection capabilities, even when the original source isn't from your local regulator.
Beyond Money Laundering: Detecting Predicate Offences
Child exploitation highlights a broader principle that all financial institutions should consider: whilst AML/CTF legislation focuses on money laundering, terrorism financing and proliferation financing, organisations should think more carefully about detecting the predicate offences that generate the funds to be laundered.
Most businesses maintain robust fraud detection programmes and understand the importance of identifying fraudulent activity. However, the same vigilance should extend to other predicate offences revealed through financial data.
Certain crimes, including child exploitation and modern slavery, may pose a relatively low money laundering risk in isolation. Yet they represent an extremely high level of harm to victims and create substantial reputational risk for any financial institution unwittingly facilitating them.
Every suspicious matter report, threshold transaction report or international funds transfer instruction you submit to AUSTRAC contributes to a larger intelligence picture. These individual pieces of information combine with reports from your peers across the industry to enable AUSTRAC to provide better intelligence to agencies capable of taking action to stop these crimes.
Story 2: Australia's AML/CTF Reforms: Preparing for Change
The reform programme continues to progress, with regular updates from AUSTRAC and industry advisors. Recent weeks have seen the publication of the new rules, and the next major milestone will be the release of guidance, planned for October.
For those seeking to stay informed, AUSTRAC has hosted several webinars in partnership with organisations including ACAMS and the RegTech Association. These sessions provide valuable insight into how the reforms will operate in practice.
The timeline remains firm:
- Existing reporting entities (Tranche 1) must comply by 31 March 2026
- Tranche 2 entities must comply from 1 July 2026
These dates are approaching rapidly. Rather than waiting until the last minute, organisations should be actively planning their approach to implementation. AUSTRAC's core guidance is available on their website and provides a solid foundation for understanding what will be expected.
Story 3: FIU Conference 2025: The New Financial Battlefield
The New Zealand FIU Conference, co-hosted by the NZ FIU and ACAMS, returns from 3-5 November in Wellington. This year's theme, "The New Financial Battlefield: Crime and the Global Power Shift," promises a thought-provoking programme.
The conference has established itself as one of the premier events in the financial crime calendar, attracting practitioners from across the industry. Jade ThirdEye has been a proud sponsor for many years and will be attending again in 2025.
Registration closes on Friday, 24 October, with both in-person and virtual attendance options available. In-person places may be limited, so early registration is recommended.
If you're planning to attend, make sure you visit the Jade ThirdEye stand. It's an excellent opportunity to discuss the compliance challenges you're navigating and share insights with others facing similar issues.
View the full agenda and register here.
Looking Ahead
These developments collectively reinforce several important themes for financial crime professionals:
Financial institutions must look beyond traditional money laundering detection to identify the predicate offences causing real harm to victims. Child exploitation and similar crimes demand constant vigilance and robust controls.
The Australian reform programme is advancing on schedule, and organisations should be well into their preparation phase by now. Waiting until 2026 to begin planning will leave insufficient time for proper implementation.
Industry events like the FIU Conference provide valuable opportunities to connect with peers, learn from experts, and strengthen your professional network. These connections often prove invaluable when navigating complex compliance challenges.
Stay vigilant and stay ahead. Join us next month for more insights from The FinCrime Connection, brought to you by Jade ThirdEye.
This blog is based on the October episode of The FinCrime Connection ANZ, hosted by Jing Zhang, Business Development Manager, and Colin Dixon, CAMS-certified AML Solutions Specialist at Jade ThirdEye. Colin has been with Jade ThirdEye since its inception in 2012 and brings extensive experience helping clients maximise the effectiveness of their financial crime prevention programmes.