The Straits Times reported about a month ago that Australia’s Commonwealth Bank, the nation’s largest lender, was entering “mediation with the country’s financial intelligence agency over a major anti-money laundering civil case that could be hugely costly for the lender.” They were taken to court for “serious and systemic non-compliance” of Anti-Money Laundering laws more than 53,000 times, with watchdog AUSTRAC (Australian Transaction Reports and Analysis Centre) filing another 100 claims.
Financial penalties will ensue, but the reputational fallout will lead to worse longer term costs. According to Bloomberg a scathing report into the nation’s biggest bank found a “widespread sense of complacency” from the top down blinding it to risks that led to a massive breach of Anti-Money Laundering laws. Amid revelations of widespread misconduct; ranging from lying to regulators to falsifying documents and taking bribes, this report is sure to strengthen regulators and further threaten the bank’s accountability as well as their bottom line, and this will lead to greater and tighter regulations of the banking sector.
Update – 06/06/2018: According to CNN Money the Commonwealth Bank has just been fined $700 million Australian dollars (US$534 million) by AUSTRAC. To add to the revelations above, drug gangs laundered money by taking advantage of a loophole that allowed for large, anonymous deposits to Commonwealth Bank accounts. “As we have seen in this case, criminals will exploit poor business practices to launder the proceeds of their crimes,” Austrac CEO Nicole Rose said in a statement.