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In 2019, the reputation of the financial services sector was hit by critical findings from both the Royal Commissions into Misconduct in the Banking, Superannuation and Financial Services Industry and the Parliamentary Joint Committee on Corporations and Financial Services – Fairness in Franchising.

In addition, three of the big four banks were involved in significant Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) breaches:

  • Westpac (2019) – Formally accused by AUSTRAC of more than 23 million breaches of anti-money laundering and counter-terrorism finance laws involving $11bn in transactions, including a number potentially linked to child exploitation. As a result of this, CEO Brian Hartzer resigned and chairman Lindsay Maxsted brought forward his retirement. The potential maximum fine is calculated to be $391 trillion based on the lower end of the maximum civil penalty.

  • complianceNAB (2019) - Faces a significant financial penalty from AUSTRAC after self-reporting a large number of breaches of anti-money laundering and counter-terrorism laws and says there may be more to come with no certainty as to whether it will face a lawsuit over the matter.

  • CBA (2018) – Fined $700m by AUSTRAC for the late filing of 53,506 transaction reports, not properly monitoring transactions on 778,370 accounts, filing 149 suspicious matter reports late or not at all, not performing checks on 80 suspicious customers and failing to properly assess risks relating to its Intelligent Deposit Machines on 14 occasions.

With the potential of major reputational damage and a significant decrease in investor value, the importance of managing AML risk has never been higher.

Boards and management are required to react quickly to technological changes, criminal behaviours and emerging trends which add further complexities to organisations compliance efforts. 

For insight into what these include, and how you can address them, download the full publication below.

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For further information:

Do you have any queries, or alternatively require assistance from our highly experienced Financial Services Risk Advisors? If this is the case, get in touch with your local office or Jeremy Elman