An internal report outlining compliance failures by Australia-based financial institution Westpac that led to 23 million breaches of the country’s money laundering and terrorism financing laws concluded “a mix of technology and human error” were to blame.

Westpac’s report, issued Thursday, said the company found three main problem areas in its attempts to comply with Australia’s anti-money laundering (AML) and counter-terrorism financing (CTF) laws: “Some areas of AML/CTF risk were not sufficiently understood within Westpac; there were unclear end-to-end accountabilities for managing AML/CTF compliance; and there was a lack of sufficient AML/CTF expertise and resourcing.”

“While the compliance failures were serious, the problems were faults of omission. There was no evidence of intentional wrongdoing.”

Peter King, CEO, Westpac

Although Westpac as an institution failed to place enough emphasis on financial crime risk, its employees were not complicit in the failings, the internal report said. Despite that, the company has issued “a range of remuneration consequences” against 38 Westpac employees, and many of them have left the company.

“While the compliance failures were serious, the problems were faults of omission. There was no evidence of intentional wrongdoing,” wrote Westpac CEO Peter King, who took over the reins of the organization in April.

The bank is alleged to have failed to report some AUS$11 billion (U.S. $7.35 billion) worth of transactions since 2013 to the Australian Transaction Reports and Analysis Centre (AUSTRAC) that may have posed a risk of funding terrorism.

By law, Australian banks are required to report international funds transfer instructions (IFTIs) to the regulator within 10 days of receipt as part of an effort to clamp down on suspicious transactions. In some circumstances, however, Westpac is accused of taking six years to report them.

The bank also allegedly failed to retain records and perform certain due diligence functions with potentially high-risk overseas banks or sanctioned countries, including Iraq, Ukraine, and Zimbabwe.

“Westpac people are impressive in their individual and collective drive to ‘do the right thing,’” the report said. “There was genuine and widespread dismay over the child exploitation allegations.”

The report found although financial crime “reporting was regular, the ‘voice of financial crime risk’ was not loud enough, nor were the concerns that the regulator might have expressed.” Financial crime risk “[did] not emerge with clarity above the background noise and its risk was not properly appreciated” even though Westpac employees monitoring the risks brought them to the board’s attention.

“While the information flows to the Board and its Committees were adequate, the content of that information was not. It was sometimes misleading or information was omitted,” the report said.

Since the allegations against the company became public in 2019, Westpac’s leadership team has been upended, including the resignation of Group Chief Executive Officer Brian Hartzer and the early retirement of Westpac Group Chairman Lindsay Maxsted. On April 2, Westpac announced the appointment of King as its new CEO.

Westpac has set aside AUS$900 million (U.S. $570 million) for a potential fine with Australian enforcement authorities related to a money laundering scandal and for allegations of facilitating child exploitation in the Philippines and Southeast Asia.