Westpac sets up financial crime review

Bernard Kellerman
Jeffrey Carmichael, Promontory
Westpac's newly appointed financial crime committee has not wasted any time in commissioning advisory firm Promontory to review the bank's failed financial crime program.

The "urgent" external accountability review by the wholly-owned IBM subsidiary, announced yesterday, is merely the latest in a series of steps Westpac is undertaking in the wake of Austrac's revelations that the bank racked up tens of millions of anti-money laundering rule violations over several years.

Westpac Group chairman Lindsay Maxsted said the newly appointed committee, comprised of non-executive directors, is to oversee the review on behalf of the Westpac Board, The committee is chaired by Peter Nash and includes other non-executive directors, Nerida Caesar, Steven Harker and Margaret Seale.

Maxsted said the first priority task for Promontory would be reviewing issues associated with LitePay.

"If and where procedural, escalation or accountability failings are confirmed through Promontory's review, there will be immediate action taken."

Jeff Carmichael, the Promontory Australasian practice leader, said rapid digitisation of the global economy has seen financial crime increase "exponentially".

"As we have seen with the Westpac matter, the implications of systems, personnel or governance failings around financial crime can be very serious."

Westpac will also establish an advisory panel of three independent experts to consider Promontory's report and provide recommendations on governance as well as board accountability.

The bank said the makeup of the panel would be confirmed "in coming days".

The recommendations of the reviews will be made public "and implemented as soon as possible".

The executives responsible for the review and any remediation arising are largely acting their current roles. Acting chief executive officer Peter King, has stepped up from Chief Financial Officer, with chief operating officer Gary Thursby acting as Westpac's CFO.

Further down the line, Alastair Welsh, who has been acting in the role of chief executive of Westpac's business division since April 2019, has been appointed acting group executive enterprise services.

The bank describes this role as one "responsible for leading the Group's operations functions, property and procurement, remediation and coordination of the Group-wide transformation".

The appointment of Guilherme Lima as chief executive of Westpac's business division was announced in June as part of a "realignment" of the group's private wealth, platforms and investments, and superannuation arms into the one business division.

Lima, who was HSBC's group head of wealth management in Hong Kong, will start with Westpac on 2 December.