"Commonwealth Bank pays big price to end AUSTRAC pain."
The bank cannot simply pay this penalty and move on. The size and scope of the problems that the AUSTRAC case unearthed mean that this settlement must be a building block in the bigger Comyn clean-up.
As new-ish AUSTRAC chief Nicole Rose emphasised on Monday in her agency's announcement of settlement, these anti-money laundering and counter-terrorism financing threats are not some abstract idea – the potential here is for real terrorists to support real attacks here and overseas, and for criminals to expand their operations.
As part of its settlement, CBA has admitted the late filing of 53,506 transaction reports, inadequate risk assessments deposit machines at the centre of the allegations, and that 149 suspicious matter reports were filed late or not filed at all.
While the statement of agreed facts and admissions makes it clear that a good number of these transgressions were caused by a dodgy bit of coding at the back end of CBA's systems, it does appear there was a long period where the bank failed to get to grips with the size and seriousness of the problem it was facing.
On December 18, 2015, AUSTRAC went to the banks – including CBA – and specifically warned that the deposit-taking ATM machines were particularly vulnerable to money laundering.
But CBA didn't complete a fresh risk assessment until 2016, when it decided it had faith in its transaction monitoring systems, and didn't need take further action, such as putting deposit limits in place.
It wasn't until AUSTRAC had launched its action in August 2017 that CBA seems to swung into action at a level that satisfied the regulator.
Deposit limits where announced in October 2017, but it wasn't until April 12 of this year – three days after Comyn started – that this work was finished and, in the words of AUSTRAC, that CBA had "adopted sufficient appropriate risk-based controls".
Remember too that the handing of concerns about money laundering issues were called out as a major board failing by Australian Prudential Regulatory Authority's review of CBA's culture.
Anti-money laundering issues were raised as a "red" audit matter for the board's audit committee in 2013, and again in 2015 and again in 2016, when there is finally some action on the issue. Imagine how much pain the bank may have been spared if the issue had been properly dealt with five years ago.
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