Westpac has revealed that it failed to report 175,000 threshold transaction reports to AUSTRAC and that approximately 365,000 that were reported may have contained “incomplete or inaccurate information”. Westpac’s failure to report TTRs comprised the bulk of the allegations contained with AUSTRAC’s initial statement of claim.
“Westpac continues to engage with AUSTRAC in relation to these TTR issues, and notes that the numbers above may change,” Westpac said in a statement. “As previously disclosed, Westpac has been notified by AUSTRAC that it may amend its statement of claim to include allegations arising from its investigations into these TTR issues.”
The announcement means that Westpac could be in significantly more hot water, and comes on top of the regulator requesting more information on 272 customers who were the subject of suspicious matter reports previously filed as part of Westpac’s lookback.
However, a “significant proportion” of the potential reporting issues relates to “complex scenarios” where the bank was required to exercise judgement on whether a threshold transaction had actually occurred, and not all of the reported numbers may be breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act.
The bank’s AUSTRAC woes have dogged new CEO Peter King throughout the COVID-19 crisis. On 17 July, Westpac released a culture, governance and accountability remediation plan that found that key aspects of the bank’s non-financial risk culture were “immature and reactive” while its business was “overly complex”, leading to confusion about accountability.
The review also found that the bank was still often “too satisfied with a sense of success” and that the “voice of risk” was too faint, while leaders were quick to lay blame for failures rather than learning from them.
“Our reassessment confirms that our management of non-financial risk is currently not at the standard we set for ourselves,” Mr King said. “It is clear we have more to do to address these shortcomings, including improving our risk management capability and risk culture which is not where we want it to be.”
