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In January 2025, the Australian Securities and Investments Commission (ASIC) issued a stark warning to superannuation trustees: their financial crime detection measures are inadequate. Following a detailed review, ASIC found that many trustees were overly reliant on basic controls and had insufficient oversight of their administrators' practices. This initiative is part of ASIC's broader efforts to protect superannuation members from financial harm and to ensure that trustees fulfil their obligations in safeguarding members' retirement savings.
For financial crime compliance professionals, this is a wake-up call. Superannuation funds must act now to ensure they are not just meeting regulatory expectations but proactively defending members’ savings from financial crime.
A growing regulatory focus on anti-money laundering in Superannuation funds
From an anti-money laundering (AML) perspective, ASIC’s intervention signals an intensified regulatory focus on the intersection of fraud, scams, and money laundering. Historically, superannuation funds have concentrated their AML efforts on traditional risk indicators—such as large cash transactions or politically exposed persons (PEPs). However, ASIC’s findings suggest that fraud and scam detection must now become integral to AML frameworks.
Here’s what it means in practice:
1. Greater scrutiny on AML controls in superannuation
- Superannuation funds are already subject to AML/CTF obligations under Australian Transaction Reports and Analysis Centre’s (AUSTRAC) regulations, but ASIC’s concerns suggest that their existing controls may not sufficiently address financial crime-related risks.
- Funds must reassess whether their AML frameworks adequately capture scam indicators alongside traditional fraud and money laundering risks.
2. Need for enhanced detection & monitoring
- Traditional AML controls focus on detecting suspicious transactions, but ASIC’s letter suggests superannuation funds must go further. Examples of suspicious transactions include:
- Unusual withdrawals or transfers that don’t align with the member’s historical behaviour.
- Rapid account changes (e.g., changes in contact details followed by an immediate large withdrawal).
- High-risk jurisdictions in fund transfers (indicating possible money mule activity).
- Complex Transactions – Multiple small contributions seemingly designed to avoid reporting thresholds ("structuring").
- Transactions liked to high-risk individuals – e.g Politically Exposed Persons (PEPs) or known criminal entities (sanctions)
3. Increased oversight of administrators & service providers
- Many funds outsource administration to third parties, but ASIC’s review found trustees weren’t sufficiently overseeing these administrators' controls.
- From an AML standpoint, trustees must ensure that these third-party providers are maintaining robust KYC (Know Your Customer) and transaction monitoring practices.
- Funds may need to:
- Conduct independent AML risk assessments on administrators.
- Ensure administrators are reporting suspicious matters in line with AUSTRAC requirements.
- Implement enhanced due diligence (EDD) for high-risk members or transactions.
4. Link to the Financial Accountability Regime (FAR)
- ASIC suggested that trustees could assign scam oversight responsibilities under FAR, which increases personal accountability for financial sector executives.
- This could mean:
- Trustees & senior executives will be directly accountable for AML failures related to scam oversight.
- Regulatory enforcement risks increase for individuals if they fail to implement appropriate controls.
5. Potential for regulatory action & enforcement
- ASIC’s warning letter indicates that enforcement action could follow if funds fail to act on scam-related risks.
- This could result in:
- Civil penalties for AML/CTF compliance breaches.
- Investigations into whether trustees are meeting their obligations under the Superannuation Industry (Supervision) Act 1993 (SIS Act).
- Increased AUSTRAC reporting obligations.
As ASIC sharpens its focus on superannuation compliance, now is the time for trustees to take action. Conducting an internal gap analysis to assess whether AML programmes adequately protect funds will be the first step towards improving detection.
Unifying risk monitoring applications, tools, and data into one case management environment helps to build a holistic view of risk across the entire business value chain and reduces Total Cost of Ownership. Strengthening AML detection measures is not just a regulatory requirement—it’s an essential step in protecting members' hard-earned savings from financial crime.
Read more about financial crime regulations in Australia in our latest eBook ‘2025 Regulations Roundup: Asia Pacific’.
