Following the Austrac’s Inaugural RegTech Showcase earlier this year, Director Tony Prior used the RegTech Liaison Meeting to provide an update on the financial intelligence unit's engagement with the RegTechs.
The Anti-Money Laundering and Counter Terrorism Funding (AML/CTF) ACT was updated this year to capture digital currencies, and since New Zealand announced their own regulatory timetable implementation process, there has been considerable discussion about tranche 2 regulation.
The RegTech Showcase, together with Austrac’s own engagement with tech solutions, formed part of the wider conversation surrounding the dual model of partnership and regulation relationships—the Fintel Alliance which was announced early last year.
“We see a great opportunity for RegTechs to provide real assistance to Fintechs,” said Prior. “What we see more and more is traditional reporting entities holding discussions around understanding and mitigating their money-laundering and terrorist-financing risk.”
Prior explained that Austrac’s focus on RegTech is very much in-line with that of the Financial Action Task Force’s (FATF).
“The longer-term objectives for Austrac around RegTech are threefold: firstly, it’s about that capacity-building—that is, harnessing innovation technology and linking it to reporting entities. Secondly, and from our own point of view, is that ‘uplift’ in regulatory intelligence—the RegTechs offer the opportunity for Austrac to capture regulatory intelligence not previously available…that anonymised intelligence that can be shared back to us around risk management activities or the reporting failings of reporting entities that we can then use to prioritise and triage what compliance activities we do examine.”
The final the goal for Austrac, according to Prior, is the importance for the regulator to demonstrate regulatory leadership.
Prior said there are number of barriers for the adoption of RegTech for many of their reporting entities, and suggested that Austrac’s support for RegTech might help compliance in these entities make the decision to adopt new technology that is relevant to their compliance needs.