The board of the Commonwealth Bank of Australia (CBA) has announced the departure of CEO Ian Narev, with the chief slated to retire in mid-2018.
Chairwoman Catherine Livingstone told shareholders on Monday that Narev's exact departure time is dependent on the outcome of an "ongoing comprehensive and external search process".
Narev's ousting follows civil penalty proceedings initiated by the Australian Transaction Reports and Analysis Centre (Austrac) against CBA earlier this month.
It was alleged by Australia's financial intelligence and regulatory agency that CBA had been involved in "serious and systemic non-compliance" with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.
Austrac detailed 53,700 alleged breaches of the Act, which included failing to hand 53,506 threshold transaction reports (TTRs) for cash transactions over AU$10,000 to Austrac through intelligent deposit machines (IDMs) for almost three years between November 2012 and September 2015.
In response to Austrac's allegations, CBA said that much of the blame for the lack of filing was due to a "coding error".
"It's been a tough time at the Commonwealth Bank since the Austrac proceedings were filed and we're taking them very seriously. We're looking through it very diligently, we've spent a lot of time on it at Commonwealth Bank board over the last couple of days," the CEO said.
"We know that we've made mistakes, we have fixed a lot of those mistakes, and will continue to look to make our business better and better."
In a statement, CBA claimed it has made significant progress on a program of action relating to its obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act, which included upgrading the financial crime technology used to monitor accounts and transactions for suspicious activity.
According to the bank, its new technology will be fully delivered over the next year at a cost of approximately AU$40 million.
It is also commencing the upgrade of additional fraud monitoring technology, spending AU$85 million on a specialised "hub" relating to its know your customer processes, and is looking to recruit more than 50 financial crime compliance professionals.
Led by Livingstone, CBA's board has also established a sub-committee of four directors that will oversee the response to Austrac's statement of claim and the ongoing execution of the bank's compliance.
Narev and the other group executives received no short-term variable remuneration for the 2017 financial year, and similarly non-executive directors of CBA have had their fees reduced by 20 percent for FY18.
The bank faces a maximum penalty of AU$18 million for each of the 53,700 contraventions if found guilty.