Start at the service level
AUSTRAC’s banking industry page provides a route to relevant guidance. A bank can provide several designated services, so a single organisation label does not explain every obligation. The service, customer relationship and transfer role can change the analysis. This guide is an orientation page for that structure. It does not cover all banking products, correspondent arrangements or cross-border requirements. Read the detailed current sources for the service involved. A general sector explanation cannot replace product-level interpretation or the institution’s approved control framework.
A bank can also serve another bank
In correspondent banking, one financial institution processes transactions for another institution and its customers. The correspondent may have limited information about the underlying customers. AUSTRAC explains extra due diligence where the arrangement involves a vostro account, including understanding the respondent’s ownership, operating context and controls. That assessment complements ordinary customer obligations; it does not replace them. This is a distinct banking risk because the institution’s customer can provide a route for other customers to access services through the relationship.
- Underlying customer
Uses the respondent institution.
- Respondent bank
Uses a correspondent relationship for transactions.
- Correspondent bank
Assesses the relationship and applicable additional due diligence. Information about underlying customers may be limited.
A bank can provide access for another bank’s customers
Read this visual with the source conditions and explanation in this section.
Follow the process from top to bottom.
Worked example: inconsistent business activity
Imagine a business customer’s stated local activity does not explain a new pattern of payments involving several overseas counterparties. The example reviewer checks the customer record, available transaction details and supporting explanation. New legitimate business may account for the change. If it does not, the reviewer records the inconsistency and follows the escalation process. The example does not conclude that overseas payments are inherently suspicious. It shows how customer information and transaction evidence can be considered together without inventing a purpose for missing information.
Keep reporting decisions distinct
For the example case, cash reporting, international instruction reporting and suspicious-matter reporting are different questions. A system flag for one route should not silently close another. A practical case record identifies which questions were assessed and by whom. It also distinguishes technical submission success from the accuracy of the underlying classification. The example illustrates a handover between reporting processes. The relevant law, source conditions and transitional rules determine which reports are required for the actual service and activity.
Check what reaches the next team
A useful exercise selects a fictional case and asks each team to locate the information needed for its decision. It checks whether the next owner receives a clear question and whether unresolved items remain visible. A control called enhanced monitoring is not evidence of what staff actually reviewed. Record the action, evidence and decision instead. This proposed exercise supports clearer operations, but it does not establish regulatory adequacy. Use the shared guidance pages and the bank’s detailed framework for the substantive requirements and any specialist product rules.