NAB working with Accenture on massive compliance fix

Consulting giant Accenture is reportedly working with the NAB on a “mammoth” project to fix the long-standing compliance issues which have recently led to increased regulatory scrutiny.

The National Australia Bank has brought in professional services giant Accenture on a secret project to combat shortfalls in its financial crimes compliance and identification of high-risk customers, according to a report from the Sydney Morning Herald. Dubbed ‘Project Apollo’, the engagement is described as ‘mammoth’ by the paper, with Accenture said to have hired additional staff to work specifically on the project.

The news follows the recent formal investigation launched by Australian financial intelligence regulatory body AUSTRAC (The Australian Transaction Reports and Analysis Centre) into the bank’s potential serious and systemic non-compliance around anti-money laundering laws, with NAB boss Ross McEwan admitting there was need for further improvement in the area despite a $800 million investment since 2017.

Last year the bank halted or paused approximately 100 change projects in the weeks following the Covid-19 outbreak, looking to save on its sizeable external consultancy bill – which Consultancy.com.au analysis has pegged at almost $300 million among the Big Four over the past decade. The bank had also been working with McKinsey & Company on a risk culture audit in the year before last.

In documents leaked in the wash of the royal commission into banking in 2019, a risk report from NAB auditor Ernst & Young contended that, “The bank focuses only on addressing the issues through Band-Aid fixes rather than investing in long-term solutions.” Ironically, the leaks turned the heat on the professional services industry itself and in particular the Big Four, triggering a parliamentary inquiry into audit quality in Australia.

The alleged failings at the bank – with reports of a year-long backlog for reviewing high-risk customers and growing processing times for investigating suspicious transactions – is widely being blamed on a number of factors, including outdated technology systems, workforce casualisation and compliance staff contracting, its constant restructuring and increasing, and as a result unrealistic workloads, flagging morale, and high staff turnover.

According to the Sydney Morning Herald report, which cites multiple unnamed sources, the NAB-Accenture collaboration is drawing on “enormous resources” to examine hundreds of thousands of customer profiles that have been identified as problematic. Speaking on the scale of the project, one of the publication’s sources suggested it was presently taking up at least a third of the current financial crime workforce.

Also revealed were eye-opening claims that NAB’s core technology systems are now more than two decades old, such that if an existing customer is red-flagged (which could be due to previous compliance lapses in collecting basic details and monitoring and updating) the bank’s financial crime analysts are often having to manually go through years worth of statements to uncover any suspicious transactions.

Chris Linde, since 2018 NAB’s Chief Compliance, Conduct and Financial Crime Risk Officer and Group Money Laundering Reporting Officer, has over his career completed his Big Four bingo card, joining NAB after three and a half years at Deloitte as a senior partner. Earlier in his career he spent seven years in forensics at KPMG between London and Sydney, a year with EY in the UK, and thee years with PwC in South Africa.