Challenges, considerations and barriers to effective public-to-private information sharing

This article first appeared in FIH Insights September issue

Money laundering is a serious problem, with research indicating organised crime cost Australia between $35.5 billion and $82.3 billion in 2023/4. Stopping money laundering within Australia and across global borders means everyone needs to work co-operatively, which includes sharing information through public and private partnerships to prevent financial crimes. While this is an overarching goal, achieving it is not without its challenges in the absence of appropriate legislative frameworks in place to protect privacy and facilitate co-ordination.

The Financial Action Task Force (FATF) the international body that oversees the global architecture to help prevent financial crime encourages its member states, including Australia, which is a founding member, to foster collaboration between organisations working across the public and private sectors. This is so they can share intelligence in a timely fashion and act quickly to prevent crimes, while also respecting data privacy laws.

Australia's public-private partnership model

Australia is a leader in cultivating co-operation between the public- and private-sector to detect, disrupt and prevent financial crimes and was one of the first countries to set up a formal alliance to connect organisations working across the public and private sectors, the Fintel Alliance. The alliance comprises financial institutions, remittance service providers, gambling operators, law enforcement and government agencies who develop shared intelligence and identify ways to detect, disrupt and prevent serious crime in real time. Industry representatives and law enforcement agencies co-locate within AUSTRAC's Melbourne and Sydney offices to share and analyse financial intelligence to investigate and disrupt criminal and terrorist activity.

The Fintel Alliance's work is producing real results, most recently in relation to uncovering coordinated mortgage fraud and systemic weaknesses across Australia's lending sector. The alliance was able to identify the names of people and entities involved in potentially hundreds of millions of dollars of fraudulent mortgage loans, mostly related to Sydney properties and make referrals to law enforcement partners. It also issued practical controls to lenders to prevent, detect and disrupt mortgage fraud. This is an excellent case study of how public-private partnership can support information sharing within current data privacy laws.

Where information sharing falls short

Collaboration can achieve great outcomes but Australia still has hurdles to overcome to effect FATF recommendations around encouraging information sharing between the private sector and regulators. This is a limitation AUSTRAC acknowledges, recognising inconsistent customer identification, reporting and information-sharing standards limit the ability to track the movement of funds across borders.

These shortcomings are among a number of constraints preventing genuine co-operation outside the Fintel Alliance's current arrangements, which essentially comprise a ring-fenced environment. Non-member organisations, typically smaller entities that may be higher risk for money laundering and other serious crimes, may not always have a seat at the table and may not have access to the information they need to identify financial crimes.

Although membership of the alliance has expanded, restrictions on who can take part mean there may be limits on what, and how far, intelligence can be shared. Given the recent reforms to the AML/CTF laws to include lawyers, accountants and real estate agents, consideration needs to be given to how information about intelligence relevant to these sectors can be better shared to help prevent money laundering.

The question is how to break down barriers to membership of the existing public-private partnership, if that is what is standing in the way of more effective information sharing, or whether a more substantive legislative change to privacy laws is required for broader information sharing.

What can Australia learn from overseas?

Overseas jurisdictions have addressed the challenge of supporting information sharing between smaller private sector entities. In the UK, there has been public-private co-development of a strategic national economic crime plan for fraud and AML that moves towards more widespread data collaboration. In the Netherlands, the Financial Intelligence Unit (FIU) encourages a wide range of national partnerships and work is presently being done on legislation for more AML collaboration.

Back in Australia, 2025 reforms to tipping off provisions offered some flexibility when it comes to information sharing. But there is an opportunity to broaden awareness about how the tipping off provisions work and how they may be used in circumstances that would not, or could not, be reasonably expected to prejudice an investigation.

Broadening access while protecting privacy

As overseas examples show, it is possible to widen the net when it comes to giving the right people access to timely information about the potential for financial crimes. In Australia, consideration should be given to the nature of any mechanism that broadens the Fintel Alliance's membership, keeping in mind consumer privacy protections.

Considering these options, we shouldn't be deterred by existing barriers preventing the sharing of information. Rather, we should use existing mechanisms, look to other jurisdictions that are pressing ahead and consider how we leverage public-private partnerships. Now is the time to explore how this can work to stop criminals laundering money through our economy, as well as more serious crimes, and also strengthen the financial system.