The hidden risks of modernisation: why AML/CTF compliance must be on every CIO’s radar

Thursday, 9 October 2025

Australia’s AML/CTF reforms demand urgent CIO action. Beyond compliance, they require system readiness, data integrity and collaboration. Early action builds resilience, prevents costly failures and embeds compliance into digital transformation.

Australia's AML/CTF Overhaul

Australia is on the brink of its most sweeping anti-money laundering and counter-terrorism financing (AML/CTF) reforms in 20 years, and CIOs who don’t act risk being left dangerously exposed. These reforms are not just about regulatory compliance. They represent a fundamental shift in how organisations manage risk, data, and technology. For CIOs, this is a moment of reckoning.

The AML/CTF Amendment Act 2024 introduces a new paradigm: one that moves away from a prescriptive, compliance-based model and toward a risk-based, outcomes-oriented approach. This shift demands far more than policy updates. It requires a transformation of enterprise data architecture, system interoperability, and auditability. Technology leaders must now ensure their systems not only detect and report suspicious activity, but also demonstrate how they actively mitigate financial crime risks.

The other thing these reforms do is offer everyone a chance to “start again”. If leaders got left behind from a digitisation/automation perspective, this is their chance to re-baseline because everyone is essentially back in the same boat. It’s a scary but once-in-a-generation opportunity to rethink how they do compliance and embrace new ways of working and setting up their organisation.

The hidden risks of modernisation and siloed thinking

The hidden risks of modernisation lie in the assumptions many organisations make. Too often, compliance and IT teams operate in silos. Compliance officers may lack a deep understanding of system architecture, while technology teams are brought in too late and tasked with implementing solutions without a clear view of the regulatory context. This disconnect leads to rushed deployments, fragmented tooling, and missed opportunities to build scalable, resilient systems.

The consequences of getting it wrong are significant. Recent enforcement actions have resulted in penalties in the hundreds of millions of dollars. With AUSTRAC’s sector-specific guidance expected in December 2025, and compliance obligations commencing just three months later, the timeline is especially tight.

A CIO's action plan for AML/CTF reform

Yet there is opportunity in this urgency. Organisations that act now can get ahead of the curve. CIOs should begin by conducting a comprehensive technology readiness audit. This means assessing whether current systems can support AML/CTF obligations, including data lineage, reporting automation, and integration with AUSTRAC infrastructure. Understanding where customer and transaction data resides and how it moves across systems is critical.

Equally important is early engagement with compliance teams. Translating regulatory obligations into technical requirements requires collaboration, shared roadmaps, and continuous feedback loops. Investing in purpose-built AML platforms with end-to-end workflows and audit trails can provide the foundation for sustainable compliance. And training technology teams on the “why” behind AML/CTF ensures solutions are not just functional, but meaningful.

A strategic opportunity for CIOs 

This is not just a compliance uplift; it’s a strategic transformation. CIOs are no longer just enablers of technology; they are custodians of trust, responsible for building systems that protect against financial crime and regulatory failure. The reforms present a chance to rethink how compliance is embedded into digital transformation strategies, and how technology can be leveraged to create a culture of accountability and resilience. 

What should CIOs do now? 

1. Run a technology readiness audit – assess data lineage, reporting automation, and AUSTRAC integration. 
2. Map customer and transaction data flows – understand where data lives and how it moves. 
3. Create joint compliance - IT roadmaps – build resilience through shared ownership and accountability. 

The message is clear: start now. CIOs who act early will not only avoid costly compliance failures but also position themselves as leaders in building resilient, future-ready organisations. The organisations that succeed will be those that treat AML/CTF compliance not as a checkbox, but as a cornerstone of digital integrity. 

For those unsure where to begin, KordaMentha is ready to support with readiness assessments, data mapping, and strategic guidance.