Almost two-thirds of Australian businesses believe they could pass an anti-money laundering (AML) compliance review, but new research suggests only around one-third are truly prepared.
Australia’s AML Readiness Report 2026, commissioned by AML compliance specialist Visibl, identified a 31-percentage-point gap between businesses’ confidence and their assessed readiness.
Based on a survey of more than 60 businesses and in-depth interviews with three industry practitioners, the report found 65.6 percent of respondents were confident they would pass an AUSTRAC compliance review.
However, only 34.4 percent were actually considered ready once their governance, policies, risk assessments, training and day-to-day practices were assessed together.
The findings follow the introduction of Australia’s expanded anti-money laundering and counter-terrorism financing regime, commonly known as Tranche 2.
From 1 July 2026, certain services provided by real estate professionals, lawyers, conveyancers, accountants and other newly regulated businesses became subject to AML/CTF obligations.
The report found that identity verification was causing particular confusion, with three-quarters believing their existing identity verification checks were sufficient to meet the new AML obligations.
However, more than half of those businesses were not completing at least one of the other customer due diligence checks required to assess risk, such as sanctions and politically exposed persons screening or verifying the beneficial owners of companies and trusts.
Across the full survey sample, 42.6 percent of businesses were potentially operating under a false sense of compliance.
Emmanuel Michael, founder and CEO of buyer’s agency Investor Mate, said the misunderstanding was understandable, particularly among businesses attempting to manage their compliance obligations internally.
“I completely understand why people think verification of identity (VOI) is all that’s required. I really feel for agencies that have chosen to DIY this and might think it’s solely VOI – when it’s not,” he said.
HK Partners Business Transformation Manager Jesselyn Dang said translating the legislation into everyday processes remained a work in progress.
“I’m confident we have the core boxes ticked, but practically day-to-day we’re still figuring out the full scope of the regime.”
Firms with fewer than 20 employees reported lower confidence and readiness than larger organisations, while 41 percent of all respondents identified time or cost as their biggest compliance challenge.
One accounting-sector respondent commented on the undue admin burden on micro practices.
“It’s an overcomplicated, unusable system for small business that doesn’t have the resources of larger practices,” they said.
Another anonymous accounting respondent said the whole regime is not fit for purpose for small- and medium-sized firms.
“The inherent risk is low because we know our clients already, yet we have to implement a compliance program that is onerous, punitive and unwieldy, for a handful of matters a year.”
Visibl founder and managing director Kaan Yuksel said the legislation’s complexity was placing considerable pressure on smaller firms.
“The legislation honestly feels more complex for small and medium businesses than it does for the banks already in Tranche 1.”
The research also identified support for a portable, government-backed digital identity system that could reduce repeated verification across property and professional-services transactions.
Respondents from the real estate, legal and accounting sectors independently raised the possibility of verifying a customer’s identity once and securely reusing it with different parties.
For example, a single property transaction can currently require a customer to verify their identity separately with a bank, mortgage broker, real estate agent, solicitor and accountant.
However, Yuksel cautioned that a reusable identity system would address only one component of the broader compliance regime.
“VOI is only the first part of initial due diligence, and a tokenised system would be a huge efficiency gain within Australia,” he said.
“It’s helpful, but it doesn’t solve anti-money laundering on its own as identity checks alone will not satisfy AML requirements initially or ongoing.”
For procurement, organisations engaging newly regulated professional-services providers may need to consider whether those suppliers have moved beyond documented policies to embed customer due diligence, risk assessment, screening, training and reporting processes into their daily operations.
The report said the first annual compliance reporting cycle would provide a clearer indication of how successfully businesses have implemented the reforms.
“Twelve months from now, when the first annual AML/CTF compliance reports fall due, the industry will have a much clearer picture of how ready it really is,” the report concludes.
“Based on this research, the answer will hinge less on whether businesses want to comply, and more on whether they’ve had the practical support to translate a black-and-white law into genuinely risk-based, everyday practice.”
