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Australia’s financial intelligence regulator has fined the neobank for failing to report international funds transfers on time, the second time this year that it has been penalised for anti-money laundering (AML) breaches.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) fined Revolut Payments Australia Pty Ltd A$187,800 ($493,000).
It said that Revolut, which operates as a remittance service provider in the country, had self-disclosed delays in submitting international funds transfer instructions.
This is a requirement under the country’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act.
The regulator made clear that Revolut has since lodged the missing reports, strengthened its compliance systems and paid the fine.
“Revolut has been co-operative with AUSTRAC and paid the infringement notice in full,” said Brendan Thomas, CEO at AUSTRAC.
However, he warned that failing to report on time can have “real-life consequences”.
“It’s why failures to report need to have regulatory consequences, even where reporting entities detect, disclose and report the failures,” he said.
“Remittance services are attractive to money launderers and other types of criminals because they can move funds cheaply and quickly across borders.”
Thomas added that AUSTRAC treats late reporting as a serious issue.
“Timely reports are critical to help us detect and disrupt financial crime, to strike while the iron is hot,” he said.
“If we don’t pick up suspicious movements as soon as possible, it denies law enforcement access to the intelligence that supports criminal investigations.”
Tackling money laundering
AUSTRAC made payment platforms a focus of its 2024 regulatory priorities. This followed a national risk assessment that identified services provided by remitters, including payment platforms, as highly vulnerable to money laundering.
“The risks in this sector are high and they are consistent. It is not just traditional laundering that we’re concerned about, payment platforms are particularly vulnerable to the movement of funds associated with payments for child exploitation material,” Thomas said.
“Timely international funds transfer reports allow us to analyse current activity that points to potential persons of interest.”
When approached for comment by Vixio, a spokesperson for Revolut said that the company “is committed to the highest standards of regulatory compliance and AUSTRAC’s principles to achieve strong AML/CTF compliance.”
“Revolut places the utmost importance on compliance with our regulatory obligations. We rely on this to build trust and confidence, not only with our regulators, but also with our customers, our business partners and within the broader community."
Ongoing weakness
AUSTRAC’s enforcement action follows another penalty earlier this year in Europe. In April, the Bank of Lithuania fined Revolut, which is licensed as a bank in the EU, €3.5m for AML shortcomings.
The central bank’s inspection found weaknesses in Revolut’s monitoring of customer relationships and transactions, which it said hindered the detection of suspicious activity.
As with the Australian case, Revolut’s dealings with the regulator were relatively constructive, as it accepted the findings and reached an administrative settlement.
Taken together, the fines in Australia and Lithuania suggest that Revolut is a fast-growing firm that is still struggling to maintain consistently strong compliance standards across its global operations.
Both AUSTRAC and the Bank of Lithuania identified weaknesses in Revolut’s AML systems, albeit in different areas: late reporting in Australia and inadequate transaction monitoring in Lithuania.
This points to compliance frameworks that are not yet uniformly mature worldwide.
The cases also highlight the execution risks of rapid expansion. Revolut’s push into new markets and services is arguably outpacing its ability to build the controls that regulators expect, which is a common challenge for high-growth fintechs – Bunq’s recent €2.6m fine in the Netherlands and Monzo’s £21m fine in the UK were also related to financial crime controls.
At the same time, Revolut has shown a willingness to remediate.
It self-disclosed the reporting failures in Australia and entered into a settlement agreement in Lithuania, demonstrating transparency and cooperation with regulators.
This could be a sign of a company that has learnt its lesson and is keen to put its previously weak controls behind it. Time will tell whether more enforcement action takes place.
