Associate Justice Minister Nicole McKee hails move to broaden banks' ability to share information to combat fraudsters and scammers

Associate Justice Minister Nicole McKee says a ministerial exemption to the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act will allow 13  banks to better share information to fight fraud and scams.

"Anti–money laundering rules have made it too hard for banks to share information about known fraud or scam activity - including ‘mule’ accounts and associated details," says McKee.

"This red tape relief means banks will be able to act faster, work together more effectively, and in many cases freeze scam transfers before the money disappears overseas for good."

She says the ministerial exemption now lets banks share AML-related information with each other to battle fraudsters and scammers.

The exemption applies to the sharing of suspicious activity reports (SAR) information, and prescribed transaction reporting (PTR) information, relating to actual or potential fraud and scam activity. The banks can only disclose SAR and PTR information to each other and service providers, and only for law enforcement purposes.

The 13 banks are;  ANZ Bank New Zealand, ASB, BNZ, Kiwibank, Westpac NZ, TSB Bank, The Co-operative Bank, Rabobank NZ, Heartland Bank, SBS Bank, Bank of China (New Zealand), China Construction Bank Corporation, and Industrial and Commercial Bank of China.

McKee says the exemption helped with the implementation of the New Zealand Banking Association’s new fraud intelligence exchange ecosystem announced on Monday, (there's more detail here), which has shown "early success with reports that millions of dollars in losses have been prevented."

She also says the exemption is supported by the Ministry of Justice, the Police, and AML/CFT supervisor, the Department of Internal Affairs.

New Zealand Banking Association chief executive Roger Beaumont says banks asked for an exemption from parts of the AML/CFT Act so they can share information to help stop scams and the harm they cause.

"We welcome the Government’s decision to grant the exemption. Our banks are taking a prevention-led approach to scams. Removing this regulatory barrier helps them protect customers from authorising payments to criminals and recover funds more quickly," says Beaumont.

Improving their ability to share information to fight crime is something banks have been keen on for some time.

Westpac NZ CEO Catherine McGrath raised the issue at last year's Institute of Finance Professionals New Zealand Inc) Conference in Auckland.

"...what we're not allowed to do is say, 'Catherine McGrath has a dodgy account at Westpac. So please look at all the other Catherine McGrath accounts at the other banks and put them on watch'," McGrath said.

According to McKee, the exemption "will enhance the detection and deterrence of money laundering by enabling greater detection and prevention of fraud and scams."

The exemption runs from November this year until November 2030.