The AUSTRAC AML/CTF program starter kit gives eligible small businesses a practical way to establish an anti-money laundering and counter-terrorism financing program without starting from scratch.
It provides official guidance, templates, policies, procedures and forms that can be customised to suit the business.
That makes it a sensible starting point.
But establishing an AML/CTF program is only the first step. Once the program is adopted, someone still has to use it for every relevant customer and matter.
The starter kit may be free. The staff time required to operate it manually is not.
What the AUSTRAC starter kit does
The AUSTRAC starter kit helps eligible small businesses prepare and maintain an AML/CTF program.
Depending on the relevant profession or industry, the kit may include:
- guidance on common money laundering and terrorism financing risks;
- policies and procedures;
- customer due diligence forms;
- customer risk assessment materials;
- record-keeping templates; and
- guidance on maintaining and reviewing the program.
For many small firms, this removes much of the uncertainty involved in preparing an AML/CTF program from the ground up.
However, the documents do not complete the ongoing work for the business.
What still needs to happen in practice
Once the program is in place, staff must apply it whenever the business provides a designated service.
That may include:
- onboarding and verifying customers;
- identifying beneficial owners and persons exercising control;
- assessing customer and matter risk;
- conducting PEP and sanctions screening;
- undertaking enhanced customer due diligence where required;
- recording decisions and supporting information;
- maintaining AML/CTF records; and
- managing ongoing monitoring, rescreening and review dates.
Each step may be relatively straightforward on its own.
The challenge is completing those steps consistently across different customers, matters and entity types. None of these individual tasks is particularly difficult. The challenge is that they occur repeatedly across different clients, different staff members and different matters. Over time, maintaining consistency, retaining supporting information and ensuring nothing is overlooked can become increasingly time-consuming.
Manual compliance can become complicated quickly
Consider a small law firm with three solicitors and an office manager.
The firm adopts the AUSTRAC starter kit and completes its first customer risk assessment using the relevant forms. The client is an individual, the matter is straightforward and the records are saved in the client file.
The next client is a company. The firm must identify its beneficial owners and understand who controls it.
The following week, the firm acts for a trust with a corporate trustee. Soon after that, it receives instructions from an overseas client and encounters another customer who may require enhanced customer due diligence.
Before long, the office manager is dealing with:
- separate forms for each customer;
- ownership information stored in client files;
- risk ratings recorded in spreadsheets;
- screening results saved as PDFs or screenshots;
- emails approving higher-risk customers;
- source-of-funds information;
- calendar reminders for future reviews; and
- notes explaining why particular decisions were made.
None of these tasks is necessarily difficult.
The difficulty is keeping everything complete, consistent, current and easy to retrieve.
Free to download does not mean free to operate
The main cost of operating a manual AML/CTF process is often staff time.
A lawyer, accountant, conveyancer, real estate professional or administrator who spends time locating forms, re-entering customer details, saving screening results or checking whether a review has been completed is not spending that time on other productive work.
Even small amounts of administration can become significant when repeated across many customers.
For example, assume that a staff member’s total cost to the business is between $45 and $60 per hour once salary, superannuation and other employment costs are taken into account.
If a structured digital workflow saves only 30 to 40 minutes of manual administration for each customer, the indicative staff-time saving could be:
| Estimated time saved per customer | Staff cost of $45 per hour | Staff cost of $60 per hour |
|---|---|---|
| 30 minutes | $22.50 | $30.00 |
| 40 minutes | $30.00 | $40.00 |
For a practice onboarding 20 relevant customers each month, that could represent approximately $450 to $800 in staff time.
| Relevant customers per month | Saving 30 minutes at $45 per hour | Saving 40 minutes at $60 per hour |
|---|---|---|
| 5 | $112.50 | $200.00 |
| 10 | $225.00 | $400.00 |
| 20 | $450.00 | $800.00 |
| 50 | $1,125.00 | $2,000.00 |
The potential opportunity cost may be higher where the AML/CTF administration is performed by a lawyer, accountant, conveyancer or other fee earner who could otherwise be undertaking client work.
These figures are illustrative examples only and are not intended to represent typical savings. Actual savings will depend on the practice, the complexity of its customers and matters, its existing systems and how it uses Flagship AML.
However, the calculation demonstrates an important point: a free compliance template can still create a meaningful operational cost when it is managed manually.
Manual systems can also create inconsistency
Time is not the only issue.
Manual systems can produce differences in how staff complete and store records.
One staff member may complete a detailed risk assessment. Another may provide only brief answers. Screening results may be saved in an email folder rather than the customer record. A review date may be entered in one person’s calendar but not in a central register.
These are not failures of the AUSTRAC starter kit.
They are common risks associated with operating any document-based compliance process manually.
Signs that the manual process is becoming inefficient
Your business may be outgrowing a manual process where:
- customer information is entered repeatedly;
- staff are unsure which form or version to use;
- risk assessments are completed inconsistently;
- screening results are stored in different locations;
- review dates depend on individual calendar reminders;
- managers cannot easily see which tasks remain incomplete; or
- preparing a complete customer record takes too long.
Another warning sign is that staff begin treating AML/CTF work as a separate administrative exercise to be completed later.
A practical system should help make AML/CTF checks part of the ordinary customer or matter workflow.
Can You Comply Without AML Software?
Yes. Many small businesses begin with the AUSTRAC Starter Kit and manual processes. Whether software is appropriate depends on factors such as the size of the practice, the number of designated services provided, the complexity of clients and the firm’s preferred way of managing compliance.
How Flagship AML helps put the program into practice
This is where AML compliance software can help.
The purpose of software is not to replace the business’s AML/CTF program or the judgement of its staff.
Its purpose is to make the program easier to apply consistently.
Flagship AML helps businesses put their AML/CTF programs into practice through guided workflows for:
- customer onboarding;
- identity verification;
- customer due diligence and matter risk assessments;
- beneficial ownership;
- PEP, sanctions and criminal-risk screening;
- enhanced customer due diligence;
- structured record keeping;
- ongoing monitoring;
- rescreening and review reminders; and
- audit-ready customer records.
Instead of relying on disconnected forms, spreadsheets, emails and calendars, staff can work through a structured process and maintain the resulting information in an organised customer record.
This can reduce repeated data entry, improve consistency and make it easier to identify incomplete tasks.
Different tools for different jobs
The AUSTRAC starter kit and Flagship AML are not competing alternatives.
They perform different roles.
| AUSTRAC starter kit | Dedicated AML Software (e.g. Flagship AML) |
|---|---|
| Helps establish the AML/CTF program | Helps operate the program in practice |
| Provides official guidance and templates | Provides independent commercial software |
| Explains what should be done | Guides staff through relevant workflows |
| Includes policies, procedures and forms | Provides structured digital processes |
| Requires business customisation | Supports consistent implementation |
| Provides tools for recording compliance activities | Organises customer records and supporting evidence |
| Requires ongoing maintenance and review | Provides review and rescreening reminders |
| Free to access and customise | May reduce the staff time required to operate the program |
The relationship can be summarised simply:
AUSTRAC provides the program framework. Flagship AML helps you put it into practice.
Software does not remove responsibility
Flagship AML supports the operation of an AML/CTF program, but it does not replace the reporting entity’s judgement, governance responsibilities or legal obligations.
No software platform can guarantee compliance.
The business remains responsible for understanding its obligations, applying risk-based judgement, training staff and maintaining an appropriate AML/CTF program.
Flagship AML is an independent commercial platform and is not endorsed by AUSTRAC.
When Should You Consider AML Software?
The AUSTRAC starter kit is a valuable resource for eligible small businesses.
It can provide the framework, policies, procedures and forms needed to establish an AML/CTF program.
But as the number and complexity of customers increases, managing the program manually may begin to consume valuable staff time.
Even a saving of 30 minutes per customer could materially reduce the administrative cost of operating an AML/CTF program.
The AUSTRAC starter kit can help you establish your AML/CTF program.
The question is not whether the AUSTRAC Starter Kit or AML software is “better”. They serve different purposes. The Starter Kit helps establish your AML/CTF Program. Software may help you implement it consistently as your practice grows.
Flagship AML can help your practice apply that program consistently through guided workflows, screening, risk assessments, structured record keeping and review reminders.
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This article is commentary only and is provided for general information. It is not intended to be, and should not be relied on as, legal advice. AML/CTF obligations depend on the specific services, structure and circumstances of each business. You should obtain legal or professional advice before acting or relying on this information. Flagship AML is an independent commercial platform and is not endorsed by AUSTRAC.
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