- Banking giant Westpac (WBC) has spoke out on last year’s money laundering and counter-terrorism accusation scandal, claiming it was ‘human and technical error’
- Last year, the company admitted to 23 million breaches of the law
- The issues included Westpac failing to monitor overseas transactions which were linked to child exploitation
- The nation’s oldest bank has now blamed this failure on technological and human error, poor judgement and gaps in its compliance and risk system
- However, CEO Peter King believes the faults of omission allowed the exploitation payments
- Due to these failures, a number of leading staff, including CEO and MD Brian Hartzer, left the company, while others received remuneration consequences
- Westpac will take advice from the advisory board on implementing a remediation plan
- Westpac is up 1.06 per cent and selling shares for $18.14 each
Westpac Banking Corp (WBC) has spoke out on last year’s money laundering and counter-terrorism accusation scandal, citing them as ‘human and technical error’.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) accused the banking giant of 23 million breaches of the law last November.
The issues included Westpac’s oversight of overseas transactions which included its failure to monitor payments to the Philippines that were linked to child exploitation.
In December, the nation’s oldest bank admitted to the AUSTRAC allegations.
The bank has now blamed the failure of non-reporting overseas transactions on technology failure, human error, poor judgement and gaps in its compliance and risk systems, dating back to 2009.
“We are all committed to fixing these issues so they don’t happen again,” Chairman John McFarlane said.
Due to this, 38 staff have received remuneration consequences.
“Consequences that have been applied to individuals include significant remuneration impacts and disciplinary actions. A number of relevant staff had already left the company,” CEO Peter King said.
Peter believes even though the failures were serious, the problems were “faults of omission”.
“There was no evidence of intentional wrongdoing,” he told the market.
“We recognise we need to change. We completely accept that some important aspects of Westpac’s financial crime risk culture were immature and reactive, and we failed to build sufficient capacity and experience in some important areas,” he added.
Former CEO, Brian Hartzer, stepped down his role after the scandal broke out, followed by a former Chairman, Lindsay Maxsted, who left the Board early.
“As CEO I accept that I am ultimately accountable for everything that happens at the Bank. And it is clear that we have fallen well short of what the community expects of us, and we expect of ourselves,” Brian said.
An Advisory Panel has formed a range of views on the financial crime and has given their advice on what the company needs to change.
“We accept the recommendations of the Advisory Panel report and we are implementing them as part of the remediation plan, which is already well advanced,” John explained.
Westpac has established a new Board Legal, Regulatory & Compliance sub-committee, appointed a new executive position for financial crime and made a number of other organisational changes.
“We will have no tolerance for controllable negative events. Our transformation program has begun and will bring deep cultural change,” John added.
Westpac is up 1.06 per cent and selling shares for $18.14 at 3:59 pm AEST.