The contract with Westpac bank to provide all the government’s transactional banking services should be cancelled following the revelations of the last few weeks regarding the bank’s flagrant disregard of anti-money laundering and counter-terrorism regulations in Australia.
In addition the Reserve Bank should immediately institute an in-depth investigation, similar to the Australian Royal Commission, into the processes of the New Zealand branch of the bank.
Claims by Westpac’s New Zealand executives that its local systems and processes were robust and secure do not stand up in the face of warnings from banking regulators earlier this year that there were significant weaknesses in the way the banks govern and manage conduct risks.
Despite the New Zealand bank trying to distance itself from its Australian parent, the reality is that it is owned by Westpac Australia.
If it’s good enough for sports stars, actors, and royals to lose major contracts with sponsors when their conduct is called into question then it is clearly untenable for the New Zealand Government to continue transacting its banking with Westpac.
Westpac not only provides transactional banking services to the government but also credit and debit card services, payment services, and foreign exchange services.
The Australian government has cut Westpac out of its new buyer home mortgage scheme, so all those services should be cancelled as well.
Taxpayer-funded fees for those services are boosting Westpac’s nearly $1 billion dollar annual profit.
Those services should not have been contracted to the overseas Australian based, but largely American owned, banks in the first place.