Six years of monitoring failures, a record penalty, and a regulator that's now shown its hand — brokers take note
New Zealand's AML/CFT supervisor has put the financial sector on notice. The High Court this week ordered ASB Bank to pay $6.731 million — the largest civil penalty ever imposed under the Anti-Money Laundering and Countering Financing of Terrorism Act — after the bank admitted to seven distinct breaches spanning approximately six years.
The Reserve Bank, which filed proceedings against ASB in December, was unequivocal about what the ruling represents.
"Transaction monitoring is a key pillar to detect money laundering and terrorism financing. It is incumbent on banks to ensure their systems and processes are robust and sufficiently recognise and mitigate these risks," acting assistant governor Angus McGregor (pictured) said in a media release.
ASB — a wholly-owned subsidiary of the Commonwealth Bank and one of New Zealand's largest banks, holding approximately 18.8% of industry assets as of June 2025 — cooperated with the investigation and admitted all breaches early in proceedings.
Worth noting for context: the $6.731 million penalty represents less than 0.5% of ASB's annual net profit after tax, which ran at approximately $1.45 billion in both FY2024 and FY2025. For a bank of ASB's size, the financial sting may be modest — but the reputational consequences, and the precedent the ruling sets for the rest of the sector, are anything but.
Six years of inadequate monitoring — and the gaps that drove the fine
The settlement agreement reveals the technical detail behind the failures.
ASB's automated transaction monitoring system was found to be inadequately configured between April 2021 and June 2024 — a period during which alerts related to terrorism financing and child exploitation were not automatically escalated as high priority unless the customer already carried a heightened risk rating. That structural gap meant time-sensitive suspicious activity reports were delayed or missed entirely.
The RBNZ was pointed in its assessment: "Non-compliance with transaction monitoring and reporting requirements denies New Zealand intelligence agencies crucial time-sensitive information that is needed to detect and deter money laundering and terrorism financing from impacting New Zealand communities."
Failures in enhanced due diligence on foreign trust customers and the continuation of relationships that should have been terminated compounded the picture. ASB cooperated fully, admitted all breaches early, and has since updated its systems — but the proceedings, filed in December 2025, still produced the largest AML penalty the country has seen.
The ASB ruling is not a one-off. The Reserve Bank has since filed a second AML/CFT action against The Co-operative Bank, with a recommended penalty of $1.425 million — McGregor calling prolonged compliance failures “serious and unacceptable.”
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