Tuesday, 4 March 2025 Recent Anti Money Laundering and Counter Terrorism Financing reforms will significantly expand compliance obligations across multiple industries with the number of regulated entities growing from 15,000 to over 100,000 by March 2026. This transformation will not only place pressure on businesses to meet compliance requirements, but also reshape the talent market, making attracting and retaining AML professionals a critical success factor. KordaMentha recently hosted a client panel event which explored the international experience, workforce impact, organisational readiness, change management, and career opportunities associated with these reforms. Several key insights emerged, highlighting the importance of strategic workforce planning, cultural alignment, and operational agility. Lessons from international experience Countries that have undergone similar AML/CTF reforms can provide valuable lessons for Australia. In jurisdictions like the UK, extensive upskilling and training were required to meet compliance expectations, often leading to significant talent shortages and salary inflation. Businesses that proactively invested in talent development and workforce planning were better positioned to manage these challenges. There are also parallels to be drawn from other large-scale regulatory changes, such as ESG and DEI initiatives in Hong Kong, which underscored the need for structured change management and industry collaboration. While international best practices provide a useful guide, each regulatory environment is unique, and a localised approach will be essential for Australian businesses. The talent market shift: challenges and considerations As compliance obligations expand, so too will the demand for AML professionals. With thousands of businesses suddenly required to hire compliance officers, talent shortages are likely, creating fierce competition and upward pressure on salaries. Some organisations may struggle to secure experienced professionals, making retention strategies just as important as recruitment efforts. However, talent attraction is about more than just offering competitive salaries. Businesses that invest in a strong workplace culture, clear career progression, and leadership engagement will be more successful in retaining top talent. Many compliance professionals are looking for meaningful career development, and businesses that provide structured training, mentorship, and upskilling opportunities will be better positioned in this competitive landscape. However, even if businesses make this investment, the opportunities for talent to leave may still be too great. It’s therefore critical to have a backup plan, particularly for organisations that have a more mature workforce. Given the scale of demand, organisations may also need to rethink their workforce strategies. Flexible resourcing models, including contractors, consulting panels, and co-sourcing arrangements, could provide much-needed agility. In some cases, technology-driven solutions such as automation and AI-powered compliance tools may help ease the operational burden and reduce dependency on hard-to-find talent. Organisational readiness: aligning compliance and workforce strategy While compliance is often viewed as a technical or legal function, its successful implementation requires a holistic approach. Businesses that proactively assess their workforce capabilities and identify skills gaps will be better prepared for the transition. Leadership engagement will be critical, and compliance cannot be siloed; it must be embedded across operations, IT, legal, and customer-facing teams. Boards and executives will need to set the tone from the top, ensuring compliance efforts are well-resourced and aligned with broader business objectives. In addition, organisations should conduct scenario planning to anticipate workforce shortages, operational disruptions, and potential regulatory risks. For many businesses, the most immediate challenge will be ensuring they have the right people in place at the right time. Some will look to build internal compliance teams, while others may choose to outsource key functions or develop hybrid models that blend internal expertise with external support. There is no one-size-fits-all solution, and organisations will need to carefully evaluate their options based on their size, industry, and risk exposure. Change management and cultural alignment Meeting regulatory requirements is only one part of the equation. Success will also depend on organisational culture and the ability to manage change effectively. Large-scale compliance shifts can create uncertainty, particularly for employees who may see these changes as additional burdens rather than business improvements. To ensure a smooth transition, organisations must focus on stakeholder engagement and clear communication. Compliance teams should work closely with IT, operations, and frontline staff to ensure alignment and integration across the business. Embedding a strong risk and ethics culture will also be critical, ensuring that compliance is not just seen as a box-ticking exercise but as a core component of business integrity and reputation management. Opportunities for AML specialists: career growth and skill development While the AML/CTF reforms present challenges for businesses, they also create significant career opportunities for compliance professionals. The demand for AML expertise, regulatory knowledge and project management skills is expected to grow rapidly, opening new pathways for those already in the field and attracting fresh talent into the profession. For those looking to advance their careers, now is the time to gain new certifications, deepen regulatory knowledge, and develop leadership capabilities. Professionals who position themselves as experts in compliance strategy and operational efficiency will find themselves in high demand. This also presents an opportunity for businesses to nurture and retain their best talent. Those who invest in training, career progression, and a positive work environment will be more successful in keeping their top people, avoiding the costly and time-consuming cycle of constant recruitment. AML/CTF reforms will fundamentally reshape the compliance landscape in Australia, presenting both risks and opportunities. Businesses that proactively plan for workforce challenges, invest in upskilling, and integrate compliance into their broader business strategy will be best positioned to navigate the transition successfully. For businesses, the focus should be on building a strong, adaptable workforce, fostering a culture of compliance, and leveraging technology to enhance efficiency. For professionals, this is a pivotal moment to advance careers, develop expertise, and take on new leadership opportunities in a rapidly growing field. By taking a strategic, forward-thinking approach, organisations can turn these regulatory changes into a competitive advantage, strengthening compliance functions, enhancing reputational resilience, and positioning themselves for long-term success.