Westpac has pledged to consolidate its disparate anti-money laundering systems into a single, group-wide, database, and to double the number of people in its financial crime unit, in response to regulatory accusations that it contravened AML/CTF laws on over 23 million occasions.
Unveiled last week, the allegations, documented by Australia’s anti money-laundering and terrorism financing regulator, Austrac, could leave the bank facing penalties of over $1 billion and open the floodgates to a wave of class action lawsuits.
In his first statement on the failings, Westpac’s chairman Lindsay Maxsted says: “We understand the gravity of the issues presented by Austrac and reiterate our deep sorrow for failings by Westpac.”
The bank has already suspended payment of bonuses to executives running the compliance operations subject to determining accountability for the shortcomings.
It has also closed its LitePay product, the subject of deeply concerning allegations that it was used by paedophile networks to send payments to the Philippines, without raising any red flags.
Other urgent actions detailed by Maxsted include plans to double financial crime staff numbers to 750 and the rebuild its technology infrastructure. An independent auditor will be hired to oversee the process.
States Maxsted: "The allegations indicated that there are still unacceptable shortcomings in this area and the Board understands the need for action and accountability. We accept that we have fallen short of both our own and regulators’ standards and are determined to get all the facts and assess accountability."