Westpac blames tech and human error for money-laundering and child exploitation breaches | Westpac


Westpac has released the findings of an investigation into its money laundering and child exploitation scandal and says the failures occurred due to a mix of technology and human error, not “intentional wrongdoing”.

The country’s second-largest bank has blamed its breaches of anti-money laundering and counterterrorism financing laws on deficient processes, poor understanding and lack of resources.

“While the compliance failures were serious, the problems were faults of omission. There was no evidence of intentional wrongdoing,” Westpac’s chief executive, Peter King, said in a statement.

The Australian Transaction Reports and Analysis Centre has accused the bank of failing anti-money laundering and counterterrorism laws on reporting transactions on 23m occasions. In November Austrac filed civil proceedings in the federal court against Westpac, forcing the bank to set aside $900m for a potential legal penalty.

In January Westpac set up an external advisory panel, comprising the former NBN chairman Ziggy Switkowski, the former Sydney chief executie CEO Kerry Schott and the BCG Australia co-founder Colin Carter to review the board’s risk governance and accountability.

The failure properly to adhere to Austrac guidance for child exploitation risk in respect of some products occurred due to deficient financial crime processes, compounded by poor individual judgments, the bank said on Thursday. The failure of international funds transfer instructions non-reporting occurred due to a mix of technology and human error dating to 2009. 

“Consequences that have been applied to individuals include significant remuneration impacts and disciplinary actions,” King said. 

“A number of relevant staff” had already left the company, he said.

The scandal led to the then Westpac chief executive, Brian Hartzer, and chairman, Lindsay Maxsted, stepping down, followed by a string of senior management changes.