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Australian bank Westpac has blamed the failure of its anti money laundering (AML) processes on a mixture of technology and human error rather than any intentional wrongdoing, according to a report commissioned by the bank's former chairman Lindsay Maxsted.

The problem was highlighted in November when Westpac was hit with legal action by Austrac, the country's AML and terrorism financing watchdog, over its lax practices. The regulator found that Westpac had breached its reporting obligatons on 23 million transactions, focing the bank to set aside $900m in case of legal liability.

The case also led to the resignation and early retirement of its chief executive and chairman respectively as well as a pledge to double its compliance staff and to revamp its AML tools and systems.

Westpac also hired an IBM subsidiary Promontory to conduct an independent review into the case alongside a newly-convened external advisory panel, the results of which have just been published.

The report concluded that the reporting failures were down to deficient processes, poor understanding and lack of resources rather than any bad actors within the bank.

“While the compliance failures were serious, the problems were faults of omission. There was no evidence of intentional wrongdoing,” said Westpac chief executive Peter King.

But despite the claim that any wrongdoing was unintentional, King stated that individuals have suffered “significant remuneration impacts and disciplinary actions" while other relevant staff had already left the company.

In terms of the IT failures, the report noted a high turnover of staff and some problems with IT projects at a time of rapid change in financial technology. Many of these problems centred on the reporting of international funds transfer transactions and the lack of a reconciliation system to pick up any reporting errors.

"A relatively small IT project involving a software upgrade and complex plumbing to connect to other systems was not completed satisfactorily and resulted in regulatory reporting deficiencies, which the bank’s control and reconciliation processes failed to detect for some years," stated the report.

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