‘Think about how many children we’ve helped.’
‘Think about how many children we’ve helped.’

Why banks and cops join forces

A WORLD-FIRST partnership between Australian authorities and private companies to tackle financial crime has resulted in a 300 per cent increase in reports related to the purchase of child exploitation material in 12 months.

The Fintel Alliance, established by money-laundering watchdog AUSTRAC in March last year, brings together 19 organisations including law enforcement, the ATO, and companies including the Big Four banks, Western Union and Paypal.

While financial organisations are already required by law to report suspicious transactions to AUSTRAC, the Fintel Alliance physically brings analysts together under one roof in an enhanced data sharing arrangement.

According to Department of Home Affairs international counter-terrorism adviser Paula Chadderton, these public-private partnerships are increasingly needed to fight everything from terrorism funding and money laundering to child abuse, fraud and "good old-fashioned tax evasion".

"Financial crime is on the increase and has far-reaching tentacles," she said.

"No organisation has all the keys - holistic co-operation is ideal. A bank might suspect a customer is engaged (in illegal activity), but that doesn't stop the customer changing banks. There are some laws that prevent a bank from telling another bank their suspicions about a customer."

Ms Chadderton, who spoke this week at the Sibos financial services conference in Sydney, said "attitudes and cultures" inside organisations were the main reason information wasn't shared. Misinterpretation of complex privacy laws was also a problem.

She argues when those barriers can be overcome, collaboration comes with ancillary benefits, simplifying red tape and even highlighting existing problems in the system such as where laws are "out of step" with industry practice.

Ms Chadderton interviewed 28 participants from government and private sector for a research paper to assess the benefits of public-private partnerships like the Fintel Alliance.

Soon after the project started, Western Union raised concerns about a number of small credit card transactions it suspected were linked to child exploitation.

Combined with classified information from Australian and Filipino authorities and data from ANZ, a number of previously unknown offenders were identified, resulting in more than 20 referrals to law enforcement.

"It also led to a 316 per cent increase in 12 months in the number of suspicious transaction reports related to the purchase of child exploitation material," Ms Chadderton said.

"Think about how many children we've helped. No one wants a child to end up in those dire circumstances. It brings home why this work is important."