Westpac is facing further allegations about child abuse links relating to the anti-money laundering scandal that rocked the Australian bank late last year.
Regulatory body Austrac has warned Westpac that it may up its statement of claim against the bank after an investigation uncovered evidence that an additional 272 customers may have used loopholes in the bank's money transfer systems to engage in child exploitation. This is 23 times higher than the initial suspicions raised relating to 12 cases of transactions made to known paedophile networks in the Philippines and South East Asia.
Westpac earlier this month blamed the failure of its anti money laundering (AML) processes on a mixture of technology and human error rather than any intentional wrongdoing, according to a report commissioned by the bank's former chairman Lindsay Maxsted.
The problem was highlighted in November when Westpac was hit with legal action by Austrac, the country's AML and terrorism financing watchdog, over its lax practices. The regulator found that Westpac had breached its reporting obligatons on 23 million transactions, forcing the bank to set aside $900m in case of legal liability.
The subsequent investigation noted a high turnover of staff and some problems with IT projects at a time of rapid change in financial technology. Many of these problems centred on the reporting of international funds transfer transactions and the lack of a reconciliation system to pick up any reporting errors.
Alongside the worrying child abuse claims, Austrac is also widening the scope of its penal process to include filing failures related to an estimated 60-90,000 Threshold Transaction Reports (TTR), far higher than the the late reporting of 17,870 TTRs that were the subject of the initial claim.