New AML Exemption Lets Banks Share Data Faster to Stop Scams and Fraud

Associate Justice Minister Nicole McKee says the reform removes unnecessary red tape and strengthens New Zealand’s defences against rapidly evolving financial crime.

The Government has introduced a significant change to the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) regime, enabling banks to share crucial information more freely in order to stop scams before money is lost. Associate Justice Minister Nicole McKee says the reform removes unnecessary red tape and strengthens New Zealand’s defences against rapidly evolving financial crime.

Under a new ministerial exemption to the AML/CFT Act 2009, participating banks can now share AML-related information with each other specifically for the purpose of detecting and preventing fraud and scam activity. This includes sharing intelligence on known “mule” accounts, suspicious transfers, and other indicators that may point to organised financial crime.

A Practical Fix to a Growing Problem

Minister McKee says that while AML rules are essential for reducing crime, overly rigid requirements have previously made cooperation between banks unnecessarily difficult.

“Anti–money laundering rules have made it too hard for banks to share information about known fraud or scam activity – including mule accounts and associated details,” she said. “This red tape relief means banks can act faster, work together more effectively, and in many cases freeze scam transfers before money disappears overseas for good.”

Mule accounts are commonly used by criminal groups to move stolen funds quickly, often splitting transactions across multiple banks to avoid detection. Faster sharing of account details, behavioural patterns, and flagged transactions will allow banks to identify these networks far more efficiently than before.

Empowering Banks Without Creating New Costs

The Government says the exemption demonstrates its wider commitment to smarter regulation—removing unnecessary compliance burdens while still protecting New Zealanders from genuine risk.

“It shows that we don’t always need new rules or more taxpayers’ money to fix what matters,” McKee said. “Sometimes the best thing government can do is step aside and give individuals and businesses the freedom to solve problems in innovative ways.”

She said the ability for banks to share key information in real time is especially critical as financial criminals continuously change their methods in today’s digital environment.

Part of a Larger Overhaul of the AML/CFT Regime

The new exemption is only one element of a broader reform programme aimed at modernising the AML/CFT framework. According to McKee, the system has become overly burdensome for ordinary New Zealanders and compliant businesses, while still failing to target the most dangerous offenders.

The Government’s wider reform package is designed to:

• Reduce unnecessary compliance and paperwork for businesses with low-risk profiles

• Improve targeting of genuine financial criminals, including offshore syndicates and organised networks

• Streamline reporting obligations and simplify complex administrative processes

• Enhance coordination across the financial sector, allowing banks and institutions to focus resources where they are most effective

Once implemented, these changes will deliver the most significant regulatory relief since the AML/CFT regime came into force in 2013.

Greater Efficiency, Stronger Security

The reforms are expected to reduce costs for both banks and customers by cutting back on excessive “box-ticking” and enabling institutions to focus on higher-value compliance activities. This could translate into faster onboarding processes, fewer delays for legitimate transactions, and a clearer compliance path for businesses.

McKee says the ultimate goal is a regime that better protects New Zealanders while also supporting economic productivity: “That means less time and money wasted on bureaucracy and more focus on improving productivity, creating jobs, and lifting incomes.”

The new information-sharing exemption is already in place, giving banks immediate ability to collaborate more freely on fraud prevention.