Photo by armmypicca
If you run a remittance business in Australia, you have almost certainly experienced it: the letter from your bank informing you that your account will be closed in 30 days. No detailed explanation. No appeal process. No alternative offered. Just a polite, firm goodbye.
De-banking — the practice of banks declining or withdrawing core banking services from entire categories of customers — has been decimating Australia's remittance sector for over a decade. It has forced small operators out of business, pushed transactions into informal channels, driven up costs for migrant communities, and concentrated market power in the hands of the largest players who can absorb the compliance costs banks demand.
And despite government inquiries, regulatory guidance, and international pressure, the problem persists in 2026.
The Scale of the Problem
The numbers are stark. Research has found that nearly 75% of Australian-based money transfer operators (MTOs) have experienced threats or actual bank account closures. Between early 2014 and mid-2015 alone, some 720 bank accounts of remittance service providers and their affiliates were closed by Australian banks.
The downstream effects extend far beyond Australia's borders. The number of remittance payout agents across the Pacific able to send and receive remittances from Australian MTOs has decreased by approximately 50–60% from a peak of around 6,000 agents — and continues to decline.
For Pacific Island nations, where remittances represent a significant share of GDP, this is not an abstract policy problem. In countries like Tonga, where 84% of remittance payout points are in rural areas, any significant reduction in the payout network creates severe economic and social consequences for communities that depend on money sent home by family members working in Australia.
Why Banks Close MTO Accounts
To understand de-banking, you need to understand the incentives facing Australian banks.
Banks operate under their own AML/CTF obligations. They must conduct due diligence on their customers, monitor transactions for suspicious activity, and manage their money laundering and terrorism financing risks. Remittance businesses — particularly those serving high-risk corridors — represent a category of customer that requires enhanced due diligence, ongoing monitoring, and dedicated compliance resources.
For a major bank, the revenue from a small MTO's business account might be a few thousand dollars a year. The cost of the compliance infrastructure required to manage that account can be multiples of the revenue. When a bank's risk appetite assessment concludes that an entire sector poses an unfavourable risk-reward ratio, the rational commercial decision is to exit the sector entirely.
This is not hypothetical. Two of Australia's major banks — Commonwealth Bank and National Australia Bank — have at various points closed accounts of remittance operators. The remaining banks have tightened their risk appetites to the point where many small MTOs simply cannot open new accounts.
The result is a sector-wide problem that individual compliance excellence cannot fully solve. Even well-run, fully compliant remittance businesses have found themselves de-banked — not because of anything they did wrong, but because the bank decided the entire remittance category fell outside its risk tolerance.
What the Government Has Done
The Council of Financial Regulators Report (August 2022)
In March 2022, the then-Government asked the Council of Financial Regulators (CFR), working with AUSTRAC, the ACCC, and the Department of Home Affairs, to provide advice on policy responses to de-banking. The CFR published its report in August 2022, examining de-banking trends affecting fintech firms, digital currency exchanges, and remittance providers.
The CFR made four key recommendations:
- Data collection — Establish mechanisms to collect data on the prevalence and impact of de-banking, so policy responses can be evidence-based rather than anecdotal
- Transparency and fairness — Advise major banks of the Government's expectation that they provide guidance on their risk tolerance and requirements to affected sectors, and introduce transparency measures around account closure decisions
- Guidance — Develop clearer regulatory guidance on how banks should assess and manage relationships with higher-risk sectors, moving away from blanket de-risking
- Capability uplift — Fund targeted education, outreach, and compliance support for affected sectors including remittance providers, to help them meet the standards banks require
The Government Response (June 2023)
The Australian Government published its response in June 2023, broadly supporting the CFR's recommendations. The Government noted the proposals and supported the objectives, including acknowledging the potential benefit of capability uplift for affected sectors.
The response committed to working with regulators, banks, and affected sectors to ensure implementation of the agreed recommendations was effective and achievable.
AUSTRAC Guidance on De-banking
AUSTRAC has published updated guidance on providing financial services to customers, explicitly discouraging the indiscriminate and widespread closure of accounts across entire industries. The guidance seeks to clarify the role that both financial institutions and affected businesses play in balancing risk management with financial inclusion.
The core message from AUSTRAC is clear: banks should make risk-based decisions about individual customers, not blanket decisions about entire sectors. A bank that closes every remittance operator's account without individual assessment is not conducting proper risk management — it is conducting risk avoidance.
The Pacific Banking Guarantee Bill 2025
Recognising the acute impact of de-banking on Pacific remittance corridors, the Government introduced the Pacific Banking Guarantee Bill 2025, following the Pacific Banking Forum held in Brisbane in July 2024. The Bill allows the Commonwealth to enter legally binding guarantees with authorised deposit-taking institutions (ADIs) to reduce the risk associated with banking operations in the Pacific, effectively creating a government-backed safety net to encourage banks to maintain correspondent banking relationships in the region.
This is a meaningful step for Pacific corridors specifically, though it does not address the broader domestic de-banking problem facing Australian MTOs.
What Hasn't Been Done
Despite the inquiries, recommendations, and guidance, critical gaps remain:
No Mandatory Data Collection
The CFR's first recommendation — establishing mechanisms to collect de-banking data — was arguably the most important, because you cannot fix what you cannot measure. As of early 2026, there is no comprehensive, mandatory reporting requirement for banks to disclose de-banking decisions. The true scale of the problem remains understood primarily through industry surveys and anecdotal evidence rather than systematic data.
No Right to a Basic Bank Account
Australia does not have legislation guaranteeing businesses a right to basic banking services. The United Kingdom, by contrast, introduced requirements for banks to offer basic bank accounts to individuals, and the EU's Payment Accounts Directive includes similar provisions. In Australia, a bank's decision to close an account remains a commercial decision, subject to contract law and (in some cases) the Banking Code of Practice, but not to any statutory right of access.
Limited Enforcement of Transparency
While the Government endorsed transparency measures, there is no binding obligation on banks to provide detailed reasons for account closures or to offer meaningful notice periods. The Australian Banking Association's Banking Code of Practice requires banks to provide reasons for declining or closing accounts in certain circumstances, but the provisions have limited practical teeth for businesses in de-banked sectors.
Capability Uplift — Underfunded
The capability uplift recommendation — funding compliance education and support for affected sectors — has seen some activity, but not at the scale the problem demands. AUSTRAC has published guidance and resources, but dedicated, funded programs to help small MTOs build the compliance infrastructure that banks require remain limited.
What This Means for Your Business
If you are a remittance operator in 2026, the practical reality is this: de-banking risk has not gone away, and the policy environment — while improving — has not yet delivered the structural reforms needed to eliminate it.
The operators who survive and thrive in this environment share common characteristics:
They Over-Invest in Compliance
In a de-banking environment, compliance is not just a regulatory obligation — it is a banking relationship survival strategy. Operators who can demonstrate robust AML/CTF programs, comprehensive risk assessments, and proactive suspicious matter reporting are more likely to retain (and obtain) banking relationships. Banks are more comfortable maintaining accounts where the customer can demonstrate they are managing their own risks effectively.
They Diversify Banking Relationships
Relying on a single bank is a single point of failure. Experienced operators maintain relationships with multiple financial institutions, including smaller banks and credit unions that may have different risk appetites to the majors. Some operators have also explored banking relationships with international banks that have a different perspective on remittance sector risk.
They Document Everything
When a bank conducts a periodic review of your account, the quality and completeness of your response matters enormously. Operators who maintain detailed compliance records, can produce transaction analysis on request, and respond promptly to bank inquiries are better positioned to retain their accounts than those who treat bank reviews as an annoyance.
They Engage With Industry Bodies
Collective advocacy has been the most effective tool in the de-banking fight. Industry associations, the Australian Remittance and Currency Providers Association (ARCPA), and international bodies like the GPFI have been instrumental in keeping de-banking on the policy agenda. Individual operators benefit from that advocacy, and contributing to it strengthens the collective voice.
What To Do Now
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Audit your AML/CTF program with banking in mind — Review your program not just against AUSTRAC's requirements, but against what your bank expects. Many banks have requirements that exceed the regulatory minimum. Identify and close any gaps using the free AML/CTF Program Builder.
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Build a compliance presentation for your bank — Prepare a document that summarises your AML/CTF program, your risk assessment methodology, your transaction monitoring processes, and your compliance track record. Having this ready for bank reviews (or new account applications) demonstrates professionalism and preparedness.
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Diversify your banking arrangements — If you have only one banking relationship, begin exploring alternatives now. Do not wait until you receive a closure notice. Approach smaller banks, credit unions, and second-tier financial institutions that may be open to remittance sector relationships.
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Engage with AUSTRAC's guidance — AUSTRAC's updated guidance on de-banking is directed at both banks and affected businesses. Understanding AUSTRAC's position strengthens your hand in discussions with your bank and demonstrates regulatory awareness. Review the AUSTRAC compliance guides for the latest regulatory position.
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Participate in industry advocacy — Join or support industry bodies that advocate on de-banking issues. The more organised and vocal the remittance sector is, the more likely policy reforms will be implemented with sufficient urgency.
The Road Ahead
De-banking is not a problem that will be solved by a single piece of legislation or a single regulatory intervention. It sits at the intersection of banking risk management, AML/CTF regulation, international correspondent banking, and financial inclusion policy. Meaningful progress requires coordinated action across all of these domains.
The positive signs — the CFR recommendations, the Government's response, AUSTRAC's guidance, the Pacific Banking Guarantee Bill — indicate that policymakers understand the problem and are moving in the right direction. But for the small MTO operator who received a bank account closure notice last month, the pace of reform feels inadequate.
Australia's G20 National Remittance Plan acknowledges that de-banking of remittance service providers "may have the effect of limiting competition." The Australian Competition and Consumer Commission (ACCC) has noted that while the cost of international money transfers has declined since 2019, the reduction in competition caused by de-banking threatens to reverse that progress.
The remittance sector needs more than guidance and good intentions. It needs enforceable rights, mandatory transparency, and funded support. Until those arrive, the best defence remains what it has always been: be the most compliant operator in the room, and make it as hard as possible for any bank to justify closing your account.
Strengthen your compliance posture to protect your banking relationships. Build your free AML/CTF program → — a robust compliance framework is your best defence against de-banking.