New Banking Code

As emphasised by Australian Banking Association (ABA) CEO Anna Bligh in the Foreword to the February 2025 revised Banking Code of Practice (the Code), the Code is an important pillar of the financial services regulatory framework, setting a high standard of customer protections for Australians.

By way of background to the creation of the revised Code, the ABA submitted a draft of the Code for ASIC to consult on in August 2023. On 17 November 2023 ASIC published Consultation Paper 373 Proposed changes to the Banking Code of Practice, seeking interested parties’ views and published the submissions in March 2024. Since then, ASIC has been engaging with the ABA regarding changes to the proposed Code, resulting on 21 June 2024 with the ABA providing ASIC with a formal application seeking approval of the new code which was formally notified 26 June 2024 and will come into operation on 28 February 2025.

The more significant enhancements in the Code were helpfully summarised by ASIC Chair Joe Longo at the Australian Banking Association (ABA) Conference, 27 June 2024. He explained that:

• More small businesses will gain access to its protections as the aggregate borrowings limit has been increased from $3 million to $5 million meaning another 10,000 businesses will be eligible.
• The Code clarifies how banks will improve inclusivity and accessibility for customers including via interpreter services, National Relay Services, and accessible information. 
• Commitments in relation to the administration of deceased estates have been further clarified, and there are updated guarantor provisions including a commitment to take reasonable steps to make sure a meeting is held with a guarantor before taking a guarantee.
• The financial difficulty definition has also been enhanced, including more examples of financial difficulty causes, casting a wider net to draw in more who need support.

AML/CTF

On 9 July 2024 AUSTRAC released two national risk assessments on money laundering and terrorism financing. They provide an understanding of the scale, sophistication and threat of money laundering and terrorism financing in Australia.

According to the regulator’s accompanying media release:

The Money Laundering in Australia: National Risk Assessment found that despite new channels emerging, launderers still prefer to conduct their operations via traditional methods using cash, banks, luxury goods, real estate and casinos.

The second NRA  … Terrorism Financing in Australia: National Risk Assessment, found that retail banking, remittance and exchanging cash remain the preferred avenues to move funds. Most of these illicit funds go to overseas terrorist organisations and affiliated groups. Social media and crowdfunding platforms have also become integral to fundraising terrorist activities.

According to AUSTRAC CEO Brendan Thomas, it is hoped that these assessments will aid regulated businesses to “understand, identify and manage the particular money laundering and terrorism financing risks they face, and meet their AML/CTF obligations”.

Further, in April 2023, the Attorney-General’s Department commenced consulting on reforms to the AML/CTF regime. The first round of stakeholder consultation was conducted between April and June last year. Following receipt of feedback they developed a further stage of consultation papers.

One of the three aims of this consultation was to expand Australia’s AML/CTF regime to "tranche two" entities – lawyers, accountants, trust and company service providers, real estate professionals, and dealers in precious stones and metals. This is required as services provided by these sectors have long been recognised as at high risk for money laundering exploitation.

The reforms are also aimed at modernising digital currency and payments technology, in addition to simplifying, clarifying and modernising the AML/CTF regime.
This consultation opened 2 May 2024 and closed 13 June 2024. 

The Department will also conduct roundtable discussions with stakeholders. Engagement with industry will be undertaken on sector-specific issues as required.

As explained by the Attorney General’s Department: “Ensuring Australia is compliant with the international standards set by the FATF is a fundamental objective of the proposed reforms. Australia’s AML/CTF regime will next be comprehensively assessed by the FATF over 2026-27 where Australia will be assessed against 3 strengthened standards. A poor assessment risks Australia being ‘grey listed’ by the FATF, which could have serious consequences for Australia, including tangible economic and gross domestic product (GDP) impacts, and increased threats, risks and burdens for law enforcement.”

The author team will keep you abreast of continuing developments in their regular updates.