Jessica Fox: I’m Jess Fox. I’ve spent my life chasing remarkable. In this series, I’m meeting the people doing the same in business, in life, and in their communities.
80,000 Australian businesses are about to face anti-money laundering compliance for the first time under AUSTRAC, Australia’s financial crimes regulator. Lee Bailey is the COO of InfoTrack and together with Grant Thornton, they’ve done something no one’s done anywhere in the world. Built a free digital platform that makes that compliance accessible from day one. I want to know how they got there. Lee, welcome. Great to have you with us today.
Lee Bailie: Thanks for having me, Jess.
JF: When Australia decided to bring lawyers, accountants, real estate agents, and conveyancers under anti-money laundering laws for the first time under the tranche 2 reforms, a lot of people saw a compliance headache, but not you. You saw something else. What did you see?
LB: Yeah, thanks Jess. We saw an opportunity to, I guess, first help the industry. Secondly, help educate the industries and guide them through this transition. The Tranche changes are quite daunting at first sight. You sort of look at that, you look at the AUSTRAC starter packs and it’s sort of 3 to 400 pages depending on the size of your firm. And we wanted to assist people through that journey. So our goal was to really understand, get the knowledge of what it was changing in the industry and then be able to digitise that and make that part of the workflow that a lot of these representatives were already using when people are either buying or selling properties, setting up financial instruments or working with real estate agents.
JF: So just for the people who are watching who might not be in this industry, who is AUSTRAC and why does their involvement here matter?
LB: Yeah, AUSTRAC are the governing body. They’re a government representative that oversee, the Australian industry when it comes to Tranche 1 and Tranche 2 matters. SoTranche 1 is the banking industry and they’ve already been completing know your client due diligence for a number of years, and Tranche 2 entities coming under that regime is governed again by AUSTRAC and they set the parameters and the regulations that the new entities, so the lawyers, conveyancers and real estate agents and accountants, will need to abide by from the 1st of July. So they’re essentially the governing body that oversee this for the Australian community.
JF: So you found, or you saw that opportunity, you saw who it was going to impact, but you’ve got to find the right partners. So, how did you end up working with Grant Thornton on this?
LB: Yeah, really good question. And we felt that we could bring the technology solution to the table, but we needed someone with, I guess, knowledge, expertise in that space. I have known someone in Grant Thornton for a number of years. So, I wanted to understand if that was something they specialised in. They did, and they had a really good team around the anti-money laundering and counterterrorism funding. The Tranche 2 entity changes will impact about 80,000 businesses here in Australia, of which a large number are lawyers, conveyancers and real estate agents, and we felt with the brand of Grant Thornton and working with Grant Thornton, and the work Grant Thornton did with AUSTRAC, it was a really good fit for InfoTrack and Grant Thornton as we go forward.
JF: So what did it actually take to turn a set of regulatory guidelines into a live free platform for any firm to use?
LB: So I think the first was really understand those regulations, and that was really the work we did with Grant Thornton. Obviously Grant Thornton had been pivotal in the AUSTRAC starter packs. So we wanted to understand that and then be able to digitise that whole pack and that whole process. What was essential for us was to make that a very simple to use workflow that our clients could go into the platform, the Compliance Centre as we call it, and actually start to navigate through that in a really simple step by step process. So we set that up and that will take them all the way through to when they complete transactions with the consumer, and it’s an extension of the verification of identity that’s happening today. So they will then add on to the verification of identity some of the KYC steps, the know your client pieces around PEP, sanctions and adverse media, and then we compile that all back to the client, the lawyer or professional in the circumstances, to actually have that information to make the right call on the due diligence completed.
JF: Anything that simplifies the process that can be daunting, I think is a fantastic product. So you’ve explained it to them, but you’ve also taken this on the road, roadshows, thousands of practitioners. What’s the feedback? What are you hearing out there?
LB: The whole of March, essentially for me and a number of the people team at Grant Thornton and my company, have been on the road. We’ve gone from Geelong all the way up to Cairns. We’ve had mixed feedback, I’ll be honest. Again, a lot of practitioners are feeling this is quite daunting, “How do we work through this?” They’re already completing what is called a verification of identity, so when a person does buy or sell property, they need to be verified. We need to understand, and people are used to that, they usually give over their driver’s licence, passport. What we’ve decided to do is extend that, and really then we’re doing some of what we call the KYC, know your client checks. So once we explained that to the clients and the users, they actually felt it was not as daunting as maybe it was in the first hand. And so, understanding if we can just extend the VOI process to now be KYC as well, and you’re meeting the requirements under the AUSTRAC regime, you’re actually doing everything you need to under the new regulation. I’ll be honest, the feedback from lawyers and conveyancers was probably a little bit more, they’re going to adhere to the rules with guidance. Real estate was still coming to terms with the changes. If you think about it in the real estate market, they’re really looking to get listings and then sell that property. So working through the compliance obligations, it can be quite a challenge. And with Grant Thornton’s support and InfoTrack, we’re trying to build an ecosystem where real estate agents, lawyers, conveyancers, and the consumer can work together to ensure that the practice of what they’re doing around KYC is quite simple.
JF: So what does it look like moving forward? Obviously, new things take time. But where does this go from here?
LB: Again, Jess, a really good question. It’s really just the starting point. 1st of July is the starting point. Everyone who is a reporting entity needs to be enrolled with AUSTRAC and have their program in place by the end of July. And we’re continuing the education approach with our teams. One thing we are getting some good feedback on is creating almost a community where other lawyers, conveyancers can actually refer to each other, “Hey, are you seeing this question? I’ve had this pop up. What does this mean?” And we’re also working with the governing bodies, the law societies and the Australian Institute of Conveyancers, to ensure we provide something that, one, is obviously meets the regulatory needs, but secondly is also making it simple as they go through the process.
JF: I’ve really enjoyed hearing about how you saw that opportunity. You’ve sought out the expertise. You’ve created this product that should simplify things for those 80,000 businesses. But I want to know now, Lee, what does Remarkable look like in your world?
LB: For us, Jess, I think Remarkable is about helping these 80,000 new entities coming under the Tranche 2 regime stay in the industry. The last thing I would like to see is that people are leaving the industry because there’s too much red tape. There’s too much compliance and it’s just too hard to complete their business. When people are buying and selling properties, it can be stressful enough. We want to help people, the professionals in that circumstance, to navigate this change, be part of the industry as they go forward and continue to help mum and dad Australians.
JF: Remarkable is not a destination. It’s longevity.
LB: 100% it is. Yeah. And I think, you know, like any good athlete, it’s about preparation and having the team around you, and hopefully between InfoTrack and Grant Thornton we’ve been able to do that.
JF: Well, thanks for sharing that story with us, Lee, and enjoy the rest of your day.
LB: Thanks, Jess. Thanks for having me.
JF: You’ve just heard what remarkable looks like in their world. What does it look like in yours? Thanks for coming along. There are more journeys to meet, and I’ll see you at the next one.
