Westpac pledges three streamed approach to rectifying AUSTRAC scandal
Westpac’s acting chief executive, Peter King, has used the bank’s annual general meeting to announce how it is responding to the AUSTRAC money-laundering scandal, which includes recruiting 200 people in compliance and financial crime areas.
King said its response would be broken into three streams – immediate fixes, lifting standards, and helping those affected.
On immediate fixes, he said the bank had closed products and reported outstanding historical files that were related to AUSTRAC IFTI claims.
“To lift our standards… we are recruiting an additional 200 people in compliance and financial crime areas, adding to the 750 experts already working in this area,” he said.
“We have also implemented additional transaction monitoring.”
King said the bank had established a Board Financial Crime Committee and sought to step up industry data sharing which he said was critical to fighting financial crime.
“The third aspect of our response is to work with experts in child welfare so we can assist in their efforts to reduce the awful human impact of child exploitation,” he said.
“We will do our part – not just for a year or two, but for as long as it takes.”
He said AUSTRAC claims showed that the bank needed to change the way it worked and that he was focused on the need to improve end-to-end processes and accountability and would make the “hard decisions”.
King noted Westpac’s poor financial performance and said this reflected a deterioration in the conditions for banks along with its determination to deal with outstanding issues.
“In particular, our review of products to identity where we didn’t get it right for customers has led to an increase in provisions for remediation payments,” he said.
“…We are expecting operation conditions to continue to be soft, with growth remaining low, interest rates expected to fall further, and ongoing regulatory intensity.
“While this environment will continue to drag on performance in the 2020 year, we should see some balance sheet growth without significant deterioration in credit quality. However, there will be extra costs as we work through the remaining regulatory issues.”
Recommended for you
ASIC has banned a Queensland adviser from providing financial services for five years after failing to provide appropriate advice that was in the best interest of his clients.
Minister for Financial Services, Stephen Jones, has said it is not a “backdoor attempt” by the government to allow the new class of adviser to provide full advice.
The financial advice industry has seen a net loss after 10 consecutive weeks of net growth in adviser numbers, according to Wealth Data.
Only 11 per cent of financial advice practices have said they are including crypto products on their approved products lists, according to CoreData.
