Regulator finds Westpac's non-financial risk culture “immature and reactive”

The bank is embarking on a multi-year program to address shortcomings.

Australian lender Westpac is embarking on a multi-year program to address shortcomings in their non-financial risk culture and capability, the bank announced in a report.

This comes after a regulator-ordered report on culture, governance, and accountability found that important aspects of Westpac’s non-financial risk culture “immature and reactive.”

The reassessment reportedly found that management was overly complex which results in confusion around accountability and challenges in execution, the report added.

“Our reassessment confirms that our management of non-financial risk is currently not at the standard we set for ourselves,” said Peter King, Westpac Group CEO.

“It is clear we have more to do to address these shortcomings, including improving our risk management capability and risk culture which is not where we want it to be. As a result, we are embarking on a comprehensive, multi-year program called Customer Outcomes and Risk Excellence (CORE). The program is a company priority and as CEO I’m accountable for its delivery,” he added.

CORE’s program three pillars include changing the direction and tone set by the board the group’s executives; simplifying risk management frameworks and increasing capability and resources in this line; and providing additional training and support to employees so that they may better contribute to the bank’s accountability and risk management.

Already, Westpac said that it had established a new board legal, regulatory and compliance committee, and has created a group executive role for financial crime compliance and conduct.

“This program is comprehensive and where we find any new issues, they will be dealt with promptly and as efficiently as possible,” King added.