CBA moves to reconfirm customer data and identities in a money laundering crackdown

CBA has increased its Know Your Customer checks as Austrac circles other banks over dodgy and dated client information.

CBA has increased its Know Your Customer checks as Austrac circles other banks over dodgy and dated client information.

Commonwealth Bank, which has brought in a new tech system, has stepped up its customer validation program, asking that they reconfirm their details.

CBA confirmed it had increased the volume of its requests to existing customers as part of the bank’s KYC – or Know Your Customer – checks.

The bank introduced the new technology 18 months ago to drive its heftier KYC systems, but CBA has increased messages to customers in recent weeks as more capacity was added to handle the messaging.

A CBA spokeswoman said the bank was “committed to keeping our customer accounts safe, protecting customers from fraud and meeting its regulatory obligations”.

“From time to time, we will reach out to customers to confirm personal and/or business details across all product types, under our AML/CTF (anti-money laundering/anti-terrorist financing) obligations,” she said.

“CBA has increased the volume of these requests to existing customers to continue to meet our obligations and importantly, to help protect our customers and communities from financial and fraud-related crimes.”

The bank’s moves to increase its KYC checks comes in the wake of several interventions by the Australian Transaction Reports and Analysis Centre, which examines suspected money laundering and counter terrorism financing regulation.

Austrac has already come after the Australian arm of Dutch bank ING and BOQ over their financial compliance failures, while NAB was sanctioned over its KYC controls.

NAB agreed with Austrac in May last year to fix its KYC and the bank responded by putting resources into validating existing customer data.

Last June NAB revealed it had sunk $800m into improving its controls and processes around financial crime risk, but Austrac repeatedly highlighted concerns about the bank’s “customer identification procedures”.

BOQ agreed in May to an enforceable undertaking with Austrac to fix its AML and CTF programs after the regulator “identified concerns”.

The Brisbane-based bank has been grappling with multiple systems across its three main brands: BOQ, ME Bank, and Virgin Money, and plans to consolidate the retail divisions under one system in train.

ING self-reported to Austrac after identifying shortcomings in its AML/ CTF program, agreeing to bring in external auditors to land a plan to fix its ageing financial compliance systems.

ING, which signed an enforceable undertaking in November last year to improve its compliance programs, was ordered to submit plans showing it was improving its international funds transfer and suspicious matters reporting systems.

CBA received a $700m fine from Austrac in June 2018 over its repeated failures to control and report cash deposits on its ATMs.