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ARTICLE · 02 SEPTEMBER 2023

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AUSTRAC's guidance to businesses experiencing de-banking

Sophie Grace Pty Ltd
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AUSTRAC guidelines encourage affected businesses to establish transparent communication with financial institutions.

AustraliaFinance and Banking
Leah Li
Leah Li
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AUSTRAC issued its latest guidelines on de-banking in June 2023, aiming to encourage affected businesses to establish transparent communication with financial institutions and showcase the measures they implement to mitigate the risks inherent in their operations.

What is De-Banking?

De-banking is the practice by financial institutions of refusing, or limiting their banking services across whole industries where the industry is assessed as having a higher money laundering (ML) or terrorism financing (TF) risk. Industries commonly affected include the remittance, digital currency exchange and financial technology industries.

AUSTRAC's guidance encourages businesses seeking banking services to engage in open communication to ensure that the financial institutions understand correctly the risks presented. This approach can assist financial institutions to better grasp the business-associated risks and more effectively address them.

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