Australian bank under AML/CTF probe

At this stage, Austrac’s view is that there is potential serious and ongoing non-compliance with the bank’s obligations related to customer identification procedures, ongoing customer due diligence and part of a joint AML/CTF programme.

The concerns have been referred to the watchdog’s enforcement team which has started a formal investigation into five of the bank’s entities: NAB Limited, wealth mangers JBWere, trading and settlement service provider Wealthhub Securities, Medfin Australia which offers financial services to healthcare professionals and mortgage lender AFSH Nominees.

“Austrac’s concerns emanate from historical and contemporary compliance assessments. In particular, the seriousness of self-disclosed matters presented to Austrac over a prolonged period combined with the accompanying closure rates is concerning,” the AML body wrote in a letter to the bank.

“Austrac acknowledges that NAB has invested significantly in programmes of work to mature the financial crime risk capability of the [bank]. However, despite this effort and investment over an extended period, Austrac has ongoing concerns as to whether the [bank] has the necessary systems and processes to comply with its AML/CTF obligations.”

The watchdog’s letter states it has made no decision about taking enforcement action and is not considering civil penalty proceedings at this stage. But those positions may change, it cautions.

The action by Austrac – the Australian Transaction Reports and Analysis Centre in full – were revealed in an NAB filing to the country’s ASX stock exchange.

The bank says it has disclosed AML/CTF compliance since 2017, most recently in its 2021 half-year financial report. CEO Ross McEwan added it would cooperate with Austrac in its investigations.

“NAB takes its financial crime obligations seriously. We are very aware that we need to further improve our performance in relation to these matters. We have been working to improve and clearly have more to do,” he said.

“NAB has an important role in monitoring and reporting suspicious activity and keeping Australia’s financial system, our bank and our customers safe.

“It is a key priority for everyone at NAB to uplift our financial crime capabilities, minimise risk to customers and the bank, and improve operational performance. That’s why we are so focused on getting the basics right every time to protect our customers and our bank.”

The bank says it has invested about A$800m (US$620m, €510m) since 2017 to improve its financial crime and fraud controls and has more than 1,200 people dedicated to managing financial crime risks.