• Banking

    Some services provided by banks are attractive to criminals wanting to launder the proceeds of crime and to finance terrorism.

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What are the ML/TF Risks?

Banks offer a wide range of financial products and services, which are associated with different ML/TF risks. These include, but are not limited to:

  • Retail banking, where banks offer products and services directly to personal and business customers (including legal arrangements), such as current accounts, loans (including mortgages) and savings products;
  • Corporate and investment banking, where banks provide corporate finance and corporate banking products and investment services to corporations, governments and institutions;
  • Investment services (or wealth management), where banks provide products and services to manage their customers’ wealth;
  • Correspondent services, where banking services are provided by one bank (the “correspondent bank”) to another bank (the “respondent bank)”; and
  • Private banking, where banks provide a range of customised banking services to high net worth individuals (HNWI).

Examples of ML/TF risk associated with different banking activities include:

  • Retail banking: provision of services to cash-intensive businesses, high-volume of transactions, high-value transactions, diversity of services;
  • Wealth management: culture of confidentiality, difficulty to identify beneficial owners, concealment (use of offshore trusts), banking secrecy, complexity of financial services and products, PEPs, high value transactions, multiple jurisdictions;
  • Investment banking: layering and integration, transfer of assets between parties in exchange for cash or other assets, global nature of markets;
  • Correspondent banking: high value transactions, limited information about the remitter and source of funds especially when executing transactions with a bank located in a higher risk jurisdiction that does not comply or complies insufficiently with FATF Recommendations, the possibility that PEPs are involved regarding the ownership of a bank; and
  • Private banking: customised banking and financial services offered to private individuals that earn high levels of income and/or own sizeable investment assets.

Banks must ensure the organisation conducts a comprehensive ML/TF risk assessment to identify, assess, mitigate and manage ML/TF risk exposures as a critical first step in complying with AML/CFT laws.

What are the AML/CFT obligations?

In developing responses to obligations under AML/CFT laws and regulations the following steps must be undertaken:

  • Conduct a Money Laundering and Terrorism Financing Risk Assessment;
  • Develop an AML Program that is proportionate to ML/TF Risks;
  • Establish effective Board and Senior Management oversight of the AML/CFT Program;
  • Appoint an AML Compliance Officer;
  • Establish a Customer Due Diligence (CDD) Program including collection and verification of know your customer (KYC) information including Enhanced and Ongoing CDD controls;
  • Implement a ML/TF Risk Awareness Training Program for staff;
  • Implement a monitoring program to identify unusual and possibly suspicious customer activity, transactions and behaviour;
  • Establish a process to report suspicions and other activity specified by AML/CFT law and regulation;
  • Establish Record-keeping controls; and
  • Maintain the ML/TF Risk Assessment and the AML Program as the business and risks change.

How can AML Accelerate help?

AML Accelerate, drawing on unparalleled expertise and real-world experience, has developed an AML/CFT Program Manual for foreign exchange businesses.

Our solutions deliver all the foundational AML/CFT materials including a ML/TF Risk Assessment, an AML/CFT Program, CDD Standards, and an AML Operating Manual, which you can tailor to your specific needs, ensuring your AML/CFT controls are commensurate with your business.

Who has used AML Accelerate in this sector?

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Client success stories…

AML Accelerate is a fantastic tool – for Xinja, who is striving to be Australia’s first truly independent 100% digital neobank, this helped establish our AML Program.

David Nichols, Chief Risk Officer – Xinja

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