Westpac vows to fix risk culture
WESTPAC has conceded parts of its risk culture are “immature and reactive” and the bank is overly complex, creating issues for accountability.
The findings were made in a sweeping review of governance and culture released by the group on Friday.
In the report, the bank said it had begun a “change program” in an attempt to rectify the shortcomings.
The bank’s “culture, governance and accountability reassessment report” follows a similar assessment done during the financial services royal commission in 2018.
It comes after the antimoney-laundering watchdog, the Australian Transaction Reports and Analysis Centre, launched legal action against Westpac last year alleging the bank contravened laws more than 23 million times.
Westpac chief executive Peter King on Friday said the bank’s reassessment confirmed the view management of non-financial risk is not up to scratch.
“It is clear we have more to do to address these shortcomings, including improving our risk-management capability and risk culture, which is not where we want it to be,” Mr King said.
“As a result, we are embarking on a comprehensive, multiyear program called customer outcomes and risk excellence.
“The program is a company priority and as CEO I’m accountable for its delivery.”
Westpac said the review found aspects of the bank’s non-financial risk culture were “immature and reactive”.
“The reassessment confirmed that Westpac was overly complex, which results in confusion around accountability and challenges in execution,” the bank said.
Austrac’s legal action against Westpac led to the departure of former CEO Brian Hartzer and early retirement of chairman Lindsay Maxsted.
The regulator alleged the
IT IS CLEAR WE HAVE MORE TO DO TO ADDRESS THESE SHORTCOMINGS
WESTPAC CEO PETER KING
bank breached anti-moneylaundering and counter-terrorism-financing rules and failed to properly monitor and report transactions. Some of those transactions carried child exploitation risks.
Westpac and Austrac will square off in the Federal Court next year over their differences relating to the 23 million alleged legal breaches.
In a federal court case management hearing last month, Justice Jonathan Beach said he hoped a hearing over liability would be scheduled for the first half of 2021, but noted it should occur “ideally in the first three months of 2021”.