Improving AUSTRAC reporting

Know which transactions need to be reported and have the right data available in the right format, when you need it, to comply with AUSTRAC rules.

AUSTRAC is clamping down on IFTI reporting and Australian banks, whether they are operating on behalf of a foreign bank or just reporting for themselves, need to know they are reporting on all transactions that come under AUSTRAC rules. For banks reporting on behalf of counterparties, how you report on cover payments and the underlying transactions needs to be transparent too. And for banks reporting their own transactions, ensuring you are accurately identifying the right transactions and that you have all of the data required is no easy task as you deal with siloed, legacy systems and increasing data reporting requirements.

Is it time to review your AUSTRAC reporting?

Foreign owned banks transacting into and out of Australia are subject to AUSTRAC IFTI reporting. Currently, the process is highly manual and reporting systems are created and maintained at a global level, making it hard for local teams to ensure these systems are set up correctly, and maintained accurately, for local regulations. Because Australia requires reporting of funds going both into and out of Australia, something unique across the globe, Foreign owned banks are struggling to ensure they can pull the right data out of reporting systems to ensure compliance with AUSTRAC IFTI reporting rules. And updating their reporting systems when AUSTRAC changes the requirements is costly and time consuming as centralised reporting teams require local teams to pay for the whole system to be tested, regardless of how minor the change is. 

Is it time to review your AUSTRAC reporting?

Regulatory reporting requirements are only going to increase, and with AUSTRAC assessing the overall money laundering / terrorist financing risk associated with the mutual banking sector to be medium, mutual funds must be prepared for increased scrutiny, even while AUSTRAC focuses on the non-mutually owned banking sector. AUSTRAC has also publicly stated that it sees an increasing risk coming from mutual funds, as criminals avoid the traditional banking sector, and there has been an increase in Suspicious Matter Reports (SMR). The implication for Mutual Funds is greater pressure around Know Your Customer and Know Your Transaction information being able to be identified, collected, stored and securely shared with regulators as required. And that internal systems are keeping up with changing requirements around Transaction Threshold Reports (TTR) as well as SMR. You must have all data required by AUSTRAC ready before reports are sent, or risk being in breach of regulations.

Is it time to review your AUSTRAC reporting?

Much like banks, money transfer services are required to report International Fund Transfer Instructions (IFTI), Suspicious Matter Reports (SMRs) and Transaction Threshold Reports (TTRs) to AUSTRAC. And whether you are an Australian remitter or based overseas, gathering the data you need to report can be a challenge. If you are reviewing your AUSTRAC reporting, consider how you identify transactions that need to be reported, determine if you have the right data to hand and how you report. If any of these processes is manual, there are technology solutions available today to help reduce the reporting burden and ensure you report accurately and completely to AUSTRAC.

Is it time to review your AUSTRAC reporting?

Accurate reporting can be difficult to do efficiently. High rates of manual processing, including to identify reportable transactions and if the right data is available, increasing data requirements and legacy technology all combine to make it hard for organisations to scale to handle reporting requirements seamlessly. The use of MT202 cover payments by counterparties can also cause challenges, because it can be difficult to identify the underlying MT103 messages they relate to without visibility into the counterparty’s payment system. The result is that AUSTRAC reporting entities, whether they are reporting on behalf of someone else or for themselves, don’t always have the information they need, when they need it. And if they do have it, it’s often kept across siloed and disconnected systems, with no single source of truth. This causes significant time and resources to be allocated on AUSTRAC’s side, as you sift through incoming reports to identify what is relevant and what is missing, in particular as the quality of data is often variable.  Banks and NBFIs may also be failing to report IFTI’s and TTR’s due to challenges in identifying reportable events. As the regulator, how do you help reporting entities and reduce the risk of financial crime, when there are obviously a number of challenges they are facing in getting reporting right.

Can you help reporting entities get it right first time?

How Overlay+ Reporting Works

Capture transaction data once payments have been processed and identify problems with reporting data early, so they can be remediated prior to being sent to AUSTRAC

Enhance existing reporting systems

Easy integration with financial messaging and reporting systems to ensure relevant payment information is available, and can be standardised, when needed

Identify and collect missing information

Configurable rules engine determines if reportable payments and associated data, based on IFTI, SMR and TTR rules, is available and allows for automated enrichment

Validate payment message data contents

Automatically verify payment messages to ensure all fields contain acceptable information and identify any issues with data quality

Further enrich payments with additional infomration

Add additional data points from any internal or third party data source, to reduce last mile payment hold ups and improve data sharing across the payment chain

Switch to manual exceptions management if needed

If exceptions can’t automatically be repaired, friendly user interfaces enable you to switch back to manual exceptions management. Final reports are also flagged to compliance teams to be manually approved

Tokenisation to enrich payments

Unique tokens represent underlying data, storing it in a private distributed ledger database. Tokenisation provides a single source of shared truth for every transaction, improving auditability and removing limits on the amount and type of data that can be stored

Benefits

Simplify AUSTRAC reporting by enhancing existing reporting systems

  • Improved accuracy of reporting
  • Reduced cost of compliance
  • Automation of manual processes
  • Higher quality reporting data
  • Improved transactional visibility
  • Auditable record of activity

To discuss how Identitii can help improve your AUSTRAC reporting, fill in the form below and we’ll be in touch shortly.

Use Case

More accurate IFTI and TTR reporting for AUSTRAC

Banks that conduct business in Australia are required to report transaction data to AUSTRAC under its mandate to reduce financial crime. 

Today, this often requires sourcing data from disparate systems internally to gain a complete picture of a transaction, and with volumes continuing to increase, the burden of reporting will only get higher. 

Reporting, powered by Overlay+ simplifies AUSTRAC reporting for the 14,000 entities required to provide International Fund Transfer Instructions (IFTI) and Threshold Transaction Reports (TTR). It overlays on top of existing technology systems to create a single, srhead source of truth for transaction data, reducing operational costs and simplifying reporting.

Know Your Transaction

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