Senior execs overseeing financial crime monitoring at CBA are being moved on

Photo: Peter Parks / AFP / Getty Images.

The Commonwealth Bank today announced a series of measures to strengthen its anti-money laundering operations, including replacing the senior management in charge, hiring more than 50 financial crime experts and spending more on technology.

The actions of senior managers in the money-laundering scandal who run compliance are also under scrutiny. The bank’s board of directors says it is taking a look at “management accountability”, either by action or omission.

It’s as yet unclear if the bank’s announcement that it’s “changing senior leadership” involves anyone being fired.

Board of director meetings on Monday and Tuesday considered in detail the allegations last week of alleged breaches by the bank of the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act over combined cash deposits of $624.7 million.

Catherine Livingstone, the chair of the CBA, says the bank now has a dedicated sub-committee of four directors to oversee the response to AUSTRAC’s (Australia’s financial intelligence and regulatory agency) statement of claim and a program of action.

“The board’s actions reflect the focus we are taking on improving the trust among people, customers, businesses and communities that the Bank exists to serve,” she says.

Progress on the program of action includes:

  • Changing senior leadership in the key roles overseeing financial crimes compliance and operational risk.
  • Recruiting more than 50 financial crime compliance professionals.
  • Stricter rules when taking on new customers. Strengthening the bank’s Know Your Customer (KYC) processes with a specialist hub providing consistent and high-quality on-boarding of customers, delivered at a cost of more than $85 million.
  • Upgrading the financial crime technology used to monitor accounts and transactions for suspicious activity. The new technology will be fully delivered over the next twelve months at a cost of $40 million.
  • Upgrading additional fraud monitoring technology.

The bank has axed short term bonuses for the CEO and his senior executives, and reduced fees for the board of directors by 20%.

“This reflects our view that the board, CEO and group executives take ultimate collective responsibility for the reputation of the bank,” says Livingstone.

“As the board considers the substance of AUSTRAC’s claims, it will take an active role in addressing any further management accountability for the alleged actions or omissions,” she says.

“The board notes that it has no reason to believe that the allegations arose from deliberate or unethical behaviour, or any commercial motive.

“The board’s actions reflect the focus we are taking on improving the trust among people, customers, businesses and communities that the Bank exists to serve.”

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