Commonwealth Bank (CBA), one of Australia’s “big four” banks, agreed to pay AUS$700M ($530M USD) to Australian Transaction Reports and Analysis Centre (AUSTRAC) for settlements in breaching the anti-money laundering and counter-terrorism financing laws.
The said scandal occurred in the departure of Chief Executive Ian Narev. CBA failed to report 53,506 bank transactions over the period of 3 years and poorly monitored 778,370 accounts for money laundering red flags. Also, filed 149 suspicious matter reports late.
CBA continues to argue that a single coding error led to the failure to report the 53,506 transactions even though knowing they have violated AML laws. Nevertheless, they took responsibility for a lack of proper due diligence.
Matt Comyn, CBA current chief executive, said,
“Our agreement today is a clear acknowledgment of our failures and is an important step towards moving the bank forward. On behalf of Commonwealth Bank, I apologize to the community for letting them down.”
The now-ousted CBA executive Ian Narev recognized blockchain’s potential to be “transformational” for customers and in reducing costs two years ago, though not also realizing its capabilities as an immutable ledger for the Bank itself.
Helping AUSTRAC to save a lot of time and money investigating the breach, the CBA ledger built on the blockchain would’ve made it much more difficult to cover the 53,506 undeclared transactions.
Up to now, CBA has spent more than $400 million on anti-money laundering compliance measures.