Attorney-General Christian Porter says the record $1.3 billion Westpac fine must serve as a "wake-up call to every other financial institution" that the government expects strict obedience with anti-money laundering laws given they are in place to protect Australians from criminal activity.

Speaking in Perth after Westpac and AUSTRAC announced the settlement of the case, Mr Porter said the size of the fine reflected Westpac's "acceptance of the fact that these represent some of the greatest failings of a corporate entity in Australia's history to abide by Australian law".