By: Jim Bulling and Laura McFadzean
The Australian Securities and Investments Commission (ASIC) has published information highlighting the challenges First Nations persons face in respect of identity verification for accessing financial products or services, such as opening bank accounts or withdrawing from superannuation funds.
ASIC said these challenges arise due to First Nations persons often having multiple names (e.g. traditional name, Western name, relatives with the same name) and conflicting dates of birth. Indigenous Australians also face language barriers and geographic isolation from financial services.
At a workshop hosted by ASIC on 30 November 2023, AUSTRAC Director of Regulatory Guidance, William Morris, said a misunderstanding by providers as to the legislative requirements of identity verification and AUSTRAC’s guidance could also lead to First Nations persons being denied access.
The purpose of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 is to ensure businesses adopt identification verification processes to detect and prevent money laundering and other crimes. However, Mr Morris said this purpose should not exclude vulnerable persons from financial services.
In certain situations, a flexible identity verification approach could be used for those individuals who seek access to “low-risk” services, such as opening a bank account or depositing a small amount of funds. In addition, Mr Morris said:
- Identification documentation can be provided electronically;
- As an alternative to primary and secondary identification documents (e.g. passport, drivers licence, birth certificate), entities can take a more flexible identification approach by relying on independent documents or data (e.g. referee statements, government correspondence, Community ID or Indigenous organisation membership);
- As a last resort, an alternative means of identification can be self-attestation. While entities should not automatically suspect self-attestation is false or misleading, they should apply due diligence to any risks as soon as possible.
Further information in respect of the challenges faced by First Nations consumers is accessible here.