Australia’s biggest bank failed to adequately monitor billions of dollars in global transactions, a report claimed yesterday, potentially falling foul of international regulators as it battles similar allegations at home.
Commonwealth Bank of Australia (CBA) is already facing a civil case by AUSTRAC, Australia’s financial intelligence agency, for alleged “serious and systemic non-compliance” with anti-money laundering laws concerning thousands of transactions.
The new allegations suggest the embattled lender could also face scrutiny from international regulators over failing to monitor risk in transfers including in Singapore, Hong Kong, Shanghai, Tokyo, London and New York.
According to an internal bank review obtained by Sky News Australia, the company had non-existent or minimal transaction monitoring across almost two-thirds of its institutional banking markets arm.
The review was presented to senior executives in February, which the broadcaster said suggested CBA had known of its failings.
The bank was already in talks with financial regulators, including in Hong Kong and the US, Sky News added.
Reacting to the report, the bank — Australia’s largest firm by market capitalization — said the review was a “working document” that had proposed technology changes including automating tasks which were currently done manually as part of a “Program of Action.”
“The program includes investment in systems to enhance transition monitoring currently performed in Australia and offshore jurisdictions,” the bank said in a statement.
“The Commonwealth Bank maintains proactive relationships with all relevant global regulators on these and other matters,” it said.
Australian Minister for Finance Mathias Cormann said the latest allegations showed that “clearly the board and the management at CBA have some serious, serious work to do.”
“There’s no sugar coating this, this is a very serious issue and it goes to the heart, obviously, of the credibility of a very important financial institution in Australia,” he told Sky News.
The AUSTRAC case has prompted other Australian regulators to launch inquiries into the bank over its handling of the alleged breaches and its organizational culture.
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