$700M settlement with AUSTRAC by CBA - Ouch!!!

The Banks can't win a trick at the moment... Some would say that's karma. The possible full stop in the anti-money laundering and counter terrorism financing CBA debacle is a settlement reached between CBA and AUSTRAC where CBA is to pay a $700 million fine.

The settlement is likely not only to cover the original breaches raised by AUSTRAC against CBA but other AML "oversights" by the CBA which they no doubt have disclosed in full enough terms to AUSTRAC to try and quarantine the sins of the past with the relevant supporting undertakings to remedy and prevent such failings in the future.

The sad reality is that the Royal Commission has plenty of bad behaviour stories to come, just because of the shear volume of deals the majors effect each year. One fears that people will get bad-news fatigue and start to drone out when they hear more unfortunate tales coming from the Royal Commission. Human nature will mean we will become desensitized and start to zone out when we hear on a weekly basis another CEO of another major financial institution apologising and acknowledging its failures, promises to do better, etc...

This settlement amount will be the highest civil penalty amount in Australia, if approved by the Federal Court. This fine and the Royal Commission sends a significant message to Banks regarding compliance. However, such fines will ultimately be funded at the cost of CBA's customers and then to a lesser degree, the shareholders.

Government, ASIC and AUSTRAC in light of the recent Royal Commissions (including into Trade Union Governance and Corruption) may need to not only issue fines on the organisations (which can easily write a cheque to cover the cost) but take aim at the key individuals of such organisations responsible for compliance to sharpen the decision-makers' thoughts around compliance and the advices and actions of their internal and external advisers and auditors.