Today AUSTRAC released guidance to banks and superannuation funds to support people from diverse backgrounds and in challenging circumstances access the financial services they need.
Financial institutions require customers to provide identity documents to access their services.
However, some members of the community cannot access traditional forms of documentation to prove their identity, whether due to emergency, personal circumstances, location or structural barriers.
This can include Aboriginal and Torres Strait Islander peoples; those in remote communities; the incarcerated or recently released; intersex, trans and gender diverse people whose documentation may not reflect their identity. For those fleeing domestic violence or evacuated from their home due to a natural disaster, gathering documentation before leaving is often not an option.
Under Australia’s anti-money laundering laws, if a customer cannot produce standard identification documents such as a driver’s licences or birth certificate, banks and other regulated businesses can use alternative ways to verify their customer’s identity.
AUSTRAC CEO Nicole Rose PSM said AUSTRAC is committed to supporting financial inclusion and is working with financial institutions to balance due diligence with a flexible and compassionate approach to customer identification processes.
“The guidance will help financial institutions adopt flexible and compassionate approaches to customer identity processes, while still maintaining due diligence processes where they are concerned that a customer is not who they claim to be,” Ms Rose said.
“Having flexible customer identification procedures in place is essential to ensure that members of the community can access financial services so that temporary or systemic barriers do not prevent people from gaining this access,” Ms Rose said.
The Australian Banking Association (ABA) welcomes AUSTRAC’s release of guidance on alternate ways for identifying customers.
“This is an important step in assisting people who find themselves in difficult situations and are unable to produce traditional forms of identification to allow their financial institution to identify them,” ABA Chief Executive Anna Bligh said.
“Not having access to traditional ID can restrict an individual’s ability to open a bank account and receive payments and wages. This can make many everyday activities like paying bills extremely difficult.
“These new guidance materials will help give banks greater certainty in order to satisfy Australia’s anti-money laundering rules. They will be an important tool to help banks assist more customers in difficult situations,” Ms Bligh said.
Australian Institute of Superannuation Trustees CEO Eva Scheerlinck said: “Some members of the community, particularly the most disadvantaged, are not always in a position to provide traditional forms of identification.
“While verifying the identity of someone is important, those who struggle to do so should not be denied the financial services they need, including their superannuation savings.
“The updated guidelines from AUSTRAC strike the right balance between information security and social inclusion by allowing for flexibility in procedures.”
AUSTRAC developed this guidance in consultation with a broad range of industry groups, including the ABA, the Australian Institute of Superannuation Trustees and community organisations.
Read the new guidance on Assisting customers who don’t have standard forms of identification on the AUSTRAC website.