AUSTRAC to investigate Bendigo Bank following ‘significant’ AML/CTF deficiencies

The Australian Prudential Regulation Authority (APRA) and the Australian Transaction Reports and Analysis Centre (AUSTRAC) have launched fresh enforcement actions against Bendigo Bank after an independent review revealed ‘significant deficiencies’ in its management of money laundering risks.

Last Thursday (18 December), AUSTRAC and APRA announced that they would require Bendigo Bank to perform a “root cause analysis” to understand its non-financial risk management issues and hold an operational risk capital add-on of $50 million, to remain in place until remedial measures were completed.

The regulators said they found “significant deficiencies” with the bank’s approach to identifying, mitigating and managing money laundering and terrorism financing risks. This followed an independent review from Deloitte into suspected money laundering at a Bendigo Bank branch.

In response, AUSTRAC commenced an enforcement investigation into the bank to understand whether or not it had complied with its obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).

“This enforcement investigation follows supervisory engagement with Bendigo Bank and the bank’s recent disclosure of deficiencies in its approach to the identification, mitigation, and management of money laundering and terrorism financing risks,” AUSTRAC Acting CEO Katie Miller said.

“Our investigation will examine Bendigo Bank’s compliance with the AML/CTF Act and inform any further AUSTRAC action.”

The case has highlighted the importance of strong governance and risk management amongst entities captured under the AML/CTF framework. From 1 July 2026, some accounting firms will have to comply with fresh obligations under amendments to AUSTRAC’s Tranche 2 AML/CTF reforms.

The expanded AML/CTF regime will capture ‘gatekeeper professions’ such as real estate agents, lawyers and accountants that provide designated services, including assisting with real estate transactions and setting up trust and company structures.

Captured entities will see new responsibilities, including an obligation to enrol and register with AUSTRAC, develop and maintain an AML/CTF program, conduct customer due diligence and report suspicious transactions and activities.

In Bendigo Bank’s case, APRA chair John Lonsdale said gaps in their risk management framework needed to be “addressed urgently.”

“While the non-financial risk, anti‑money laundering spaces are a priority in light of the recent independent report, APRA is concerned that similar weaknesses may exist across the bank,” he said.

“The measures we are announcing today alongside AUSTRAC aim to ensure that fundamental deficiencies in Bendigo Bank’s risk management framework are identified and addressed, and those responsible are held to account as appropriate.”