Papua New Guinea’s recent grey listing by the Financial Action Task Force (FATF) has drawn attention across the business sector, but banking leaders say it should be seen as part of a global compliance process rather than a penalty.

Westpac PNG Chief Executive Andrew Cairns said grey listing indicates areas where financial crime prevention systems can be improved under international monitoring and does not reflect negatively on the integrity of the country’s banks, businesses or citizens. He said many countries have undergone similar processes and successfully implemented reforms.

Mr. Cairns noted that work is already underway in Papua New Guinea, led by government and supported by regulators and the private sector, to strengthen financial systems and meet international standards.

He added that while grey listing may lead to increased scrutiny from international partners and cautious investor sentiment in the short term, it also presents an opportunity to improve coordination, enhance financial intelligence and build stronger regulatory frameworks.

Mr. Cairns expressed confidence in PNG’s economic outlook, highlighting the country’s natural resources, growing population, and pipeline of major projects as key drivers of future growth.

He said the banking sector will continue to play a critical role in supporting businesses and communities, while maintaining strong compliance standards to uphold trust in the financial system.

Mr. Cairns also emphasized Westpac’s long-standing presence in the country, noting that the bank has witnessed PNG overcome challenges in the past and remains confident in its resilience.

He said with continued collaboration between government, regulators and industry, Papua New Guinea can successfully exit the grey list and emerge with a stronger and more resilient financial system.