LAB Group recently participated as Tech Partner sponsor at the inaugural AML Edge 2025 conference. It was a pleasure to speak on a panel alongside Gary Hughes, Bobbie Wan and Andrew Conway. I wanted to share a few reflections from the panel discussion and the broader conference – particularly around learnings, industry readiness, approach and the role of technology as we move towards Tranche 2 regulatory reforms.
We heard from speakers from the UK and New Zealand who have already navigated the rollout of Tranche 2 regimes. Drawing on my own 15 years of experience implementing LAB Group’s technology across regulated sectors in Australia and globally – under regimes including ASIC, APRA, AUSTRAC, MAS, FSA and FCA – I’ve seen how the AML/CTF regulatory landscape has evolved since the original Act came into force in 2006 – 2007. Over that time, LAB Group has supported millions of consumers and investors in accessing regulated products, and we’ve learned a lot about what works and what doesn’t, when it comes to RegTech.
The Early Years of Tranche 1: Education, Confusion and Community Consensus
In the early days, much of my role involved educating the market. Many prospects and customers were still unclear on how to interpret and apply AML/CTF rules. Even after initial implementation phases, there was still confusion – organisations wanted to know what others were doing, to align with perceived standards. While AML/CTF is a risk-based framework tailored to each designated service, there was a strong tendency toward following group norms.
Industry associations helped foster collaboration, but efforts remained siloed. LAB Group has worked across many of these groups and industry events, but it’s rare to see the same people and vendors across more than one or two sectors. This highlights a broader lack of cross-sector collaboration, and repetitive inefficiencies when it comes to education and tech implementation.
One common idea over the years has been the creation of a centralised industry “utility” to store and share customer data – particularly KYC verification. While much discussed, these utilities haven’t gained traction in Tranche 1. Likely barriers include vendor competition, concerns about concentration risk, and global tightening of privacy principles (e.g. GDPR). At LAB, we’ve taken the approach of building efficient interoperability, enabling data to move securely and allowing each reporting entity to maintain governance over its own tollgates and checkpoints whilst inheriting a level of standardisation.
Standardisation and Control: Still a Challenge
One key takeaway from Tranche 1 is the lack of consistent top-down and bottom-up control. Take wealth management: adviser platforms, settlement systems, registries, trustees, custodians, white labels, managers and administrators all interact – but no one party has full oversight of the AML regime across that chain. The same will apply in Tranche 2, where franchisors, franchisees, financial planners, accountants, legal practitioners, real estate agents and banks may all be part of the same transaction.
Each reporting entity is responsible for its own program, but other parties in the value chain often don’t want to be seen as bearing any responsibility. This arms-length stance has already had consequences – debanking across remitters and crypto platforms has occurred where pooled client funds can’t be robustly verified for AML/CTF controls.
A Spectrum of Readiness
Tranche 1 also revealed different levels of readiness across organisation size and sector. Enterprises were highly professionalised, but internal complexity and manual processes remain. Business process outsourcing (BPO) is often used to patch gaps, though rising offshore costs and scalability issues are pushing organisations to rethink that model.
Mid-market players have shifted dramatically. Back in 2015, a single compliance manager might have been tasked with system implementation just to check a box. That’s no longer enough. Today we’re seeing Chief Risk Officers and senior executives driving Governance, Risk and Compliance (GRC) as major transformation initiatives. The demand in the talent pool has become a challenge and has driven up costs.
SMEs are looking to adopt learnings and tech from mid-market and enterprise examples – but they need scalable, cost-effective solutions. The industry landscape still ranges from “wild west” to highly over-managed, checklist-driven compliance. Tranche 2 will likely show similar trends, especially across real estate, accounting and legal sectors, each progressing at different speeds.
At AML Edge, stream attendance gave us some signals:
- 45% Legal
- 30% Accounting
- 27% Real Estate
19% had established their AML/CTF program, it comes into question what “established” looks like in terms of true scale, automation and readiness (the conference had mentions of excel-based workflows, which never ended up in a good place for Tranche 1 entities). 52% said they were “in progress” – that might mean almost established to having attended a single conference or one consultant meeting. 29% haven’t started – though these are only the entities aware that they need to. From personal conversations, I know there are still organisations that don’t know what Tranche 2 is.
The Need for Scalable, Internationalised Solutions
Even SMEs now engage with foreign parties. As a result, we need AML processes and technologies that are internationalised and scalable – capable of handling complexities like CRS/FATCA, corporate registry data, ultimate beneficial owner drill down, multiple languages, and identity verification across jurisdictions.
Aggregation and inherited functionality across sectors will be essential. For example, if a foreign investor is involved in a property transaction, how do we define a gold standard of automation? What’s actually achievable given data availability in the originating jurisdiction?
Looking Ahead to July 2026
The industry is now balancing Tranche 1 reforms with preparation for Tranche 2, targeting compliance by July 2026, with guidance expected roughly six months prior.
At LAB Group, we’re doing everything we can to ensure compatibility and interoperability across the space – applying the lessons from more than 15 years of real-world experience in implementing technology across regulated markets.
We remain committed to helping the industry navigate what’s next.
About LAB Group Services Pty Ltd
LAB is a pioneering regulatory technology (RegTech) company revolutionising customer lifecycle management (CLM) through its innovative digital engagement and KYC verification solutions.
Founded in 2010, LAB provides comprehensive services that seamlessly integrate AML/CTF compliance, enhanced customer due diligence, and automated customer account creation.
LAB technology has facilitated millions of consumer engagements across over 15 industry verticals, serving half of the world’s top ten global asset managers. Through its extensive integrations, LAB connects to multiple verification sources, enabling accelerated customer engagement, enhanced security, and improved engagement conversion.
As a leader in secure customer onboarding, engagement, and verification, LAB technology orchestrates digital customer acquisition, corporate and identity verification, data capture workflow management, fraud protection, periodic reviews, perpetual KYC, PEP/Sanction and adverse media screening, and other regulatory and compliance needs into a modular solution. LAB’s sector-agnostic integrations and data automation capabilities help businesses adapt to evolving governance, risk, and compliance (GRC) regulations while meeting best-of-breed customer experience expectations.
Headquartered in Melbourne, Australia, and with a global presence across APAC, Europe, and the UK, LAB specialises in facilitating compliant cross-border investments and continues to shape technology solutions in an increasingly complex global regulatory landscape.
