Westpac (ASX: WBC) has announced how it plans to respond to the issues raised by AUSTRAC in the statement of claim.
Westpac Banking Corporation, more commonly known as Westpac, is one of Australia’s ‘Big Four’ banks and a financial services provider headquartered in Sydney. It is one of Australia’s largest lenders to homeowners, investors, individuals (via credit cards and personal loans) and businesses.
Westpac’s Response Plan
There are three areas that Westpac will be working on to make things right. It will be doing ‘immediate fixes’, aim to ‘lift Westpac’s standards’ and ‘protecting people’.
Westpac said that over the past two years it has recognised the need for uplift and has already done a number of things to substantially improve its monitoring of financial crime and other serious crime including:
Correcting the international fund transfer non-reporting issue on the relevant product, consolidating different financial crime systems into a single, bank-wide system, it has doubled the resourcing dedicated to financial crime to around 750 people, developed a Financial Crime Strategic Plan (shared with AUSTRAC) and changed the leadership of Westpac’s risk and financial crime areas.
Westpac is closing the LitePay international funds transfer system and also closing the Australasian cash management product. It’s also implementing other screening and resourcing.
Some of the ways that Westpac is looking to improve its standards is that when it flags transactions that suggest potential child exploitation in high risk locations, those transactions will be reported in 24 hours.
The financial crime function will now report directly to the Chief Risk Officer. The bank is also hiring an independent expert to review Westpac’s program.
Westpac is providing funding, around $24 million, to organisations focused on reducing child exploitation.
The bank will provide funding of up to $10 million per year for three years to implement recommendations from industry experts to prevent online child exploitation.
Westpac Leadership Comments
Westpac Chairman Lindsay Maxsted said: “We are determined to urgently fix these issues and lift our standards to ensure our anti-money laundering and other financial crime processes are industry leader.
“As a major bank we play a critical role in helping law enforcement agencies prevent criminals from carrying out illegal activity.
“We accept that we have fallen short of both our own and regulators’ standards and are determined to get all the facts and assess accountability.”
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At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.