Australian banks are preparing for a consumer and business backlash against new customer identification rules that are set to take effect from October. Under changes to the Anti-Money Laundering and Counter Terrorism Financing Rules, reporting entities will have to collect additional customer identification when filing transaction reports. The new customer ID will be required in cases where third parties, such as employees or family members, make deposits on behalf of the actual customer.While reporting entities should already have identified the customer when opening the account, the new rules mean that they may have to collect additional data at the point of accepting a transaction involving an "agent" of the customer. In many cases, these agents may have inadequate identification ready at the point of transaction, or they may object to providing personal information to the reporting entity. Industry groups said that it was a particular concern in the case of employees, who may see such as a security risk or a breach of their right to privacy.The Australian Transaction Reports and Analysis Centre (AUSTRAC), which has made the rule changes, said that the new requirement would give it valuable information to share with partner agencies, such as the Australian Taxation Office and the Australian Federal Police.It said that providing the details of authorised agents or third parties in cash transaction reports had been a long-standing requirement in some other jurisdictions, such as the United States and Canada. A number of larger reporting entities already comply with these requirements in their overseas operations, AUSTRAC noted.The regulator said the new rules would align as closely as possible with existing overseas requirements.AUSTRAC said there were numerous situations where an agent might conduct a threshold transaction on behalf of a customer. "An example would be where a customer has authorised an agent such as a broker or financial adviser to act on its behalf or perhaps engaged a relative, friend or associate to conduct a transaction."Paddy Oliver, an AML consultant, said that most reporting entities would find this an onerous requirement to meet. For large institutions, particularly in the banking sector, there has been enough forward thinking to prepare for the implementation start date of October 1. Outside of the top-tier firms, however, he said the new requirements were set to take many reporting entities by surprise.Oliver noted that one of the big challenges for firms would be informing their customers of the new rules. He said it was inevitable there would be a backlash from clients who did not know the Government had put the new ID requirements in place. The Australian Bankers Association has issued a pro forma explanation for banks to give their customers which runs as follows: "When you perform a transaction involving cash of  $10,000 or more, staff are required to collect certain information from you. In order to complete the transaction, you may be asked to provide personal information which may include identification (such as photo ID) that can provide evidence of who carried out the transaction."If you are