The second tranche of Australia's AML/CTF regime is now in force. Since 1 July, real estate agents, accountants, lawyers, conveyancers, and several other professional services have come under AUSTRAC's supervision for the first time. The obligations are not light. Captured businesses have to verify the identity of every customer, screen against sanctions and politically-exposed-persons lists, monitor transactions for suspicious activity, train staff, document everything, and file the right reports to AUSTRAC when the rules say to.
For a mid-sized agency or practice, that is a substantial new workload, and it is now live. With the regime in effect, the cost of getting it wrong has shifted from hypothetical to real: captured businesses that are not yet compliant are already exposed to AUSTRAC scrutiny. The question almost every captured business is asking is whether to build that capability in-house, buy software that promises to handle it, or hand it to someone else.
Build, buy, or outsource
Building in-house is the most expensive option and the most difficult to staff. AML specialists who have worked inside Australian financial institutions are not numerous, and they are not cheap. For a 20-person real estate agency, the economics rarely work.
Buying software solves part of the problem and creates another. A platform can store identity documents and route them through a screening engine, but it cannot decide what a high-risk customer is for a particular business, write the program documents AUSTRAC expects to see, train the staff, or call customers asking for alternative ID if something fails. The business still has to do the compliance work; the software just gives it somewhere to do it.
Outsourcing is what most tranche 2 businesses end up choosing once they see the full scope of the obligation. The compliance work is done by people who do it for a living, the business itself pays a service fee instead of a salary, and the obligation to execute the AML program sits with experts rather than a part-time staffer who is also doing three other jobs, and many times not an AML expert.
What an outsourced model looks like in practice
A typical AML Partners engagement starts with a risk assessment of the business: what kind of customers it has, what kind of transactions move through it, and where the realistic money-laundering risks sit. From that, the firm writes the AML/CTF program document that AUSTRAC requires.
Customer onboarding then flows through AML Partners' workflow. When a new client signs up at the agency, their contact details are uploaded into AML Partner’s software, and they do the rest. Identification is requested from clients, verified, and screened against the relevant watchlists. A risk rating is applied, and if the rating triggers enhanced due diligence, if anything fails, AML Partners will handle it all with an experienced compliance team rather than the agency's admin staff.
Staff training, policy reviews, and AUSTRAC correspondence are included. The agency keeps the customer relationship. AML Partners handles the regulator-facing work.
Who is using it
The firm now serves more than 300 Australian businesses, with a strong concentration in real estate. Named clients include Henderson Advocacy, House Finder, Christie's International, groups within Belle Property, Ray White offices, and PRD agencies. The business has exploded and grown 50% year-on-year growth.
"We do all the AUSTRAC AML requirements from documents, training, customer screening, everything required to comply with Tranche 2 AUSTRAC requirements," says founder John Nguyen, who previously held AML roles at CBA, Suncorp, ANZ, and Ernst & Young. "We outsource and do it all for the client."
For a business that does not have a compliance team and does not want to build one now that the rules are in force, outsourcing is the route with the shortest distance between today and a working, compliant AUSTRAC program.