The Commonwealth Bank is accused of breaching the money laundering laws. The Bank is one of the biggest and leading in the financial sector. The allegations tend to show that the bank’s compliance system failed to detect the alleged breaches. The allegations are serious because they have created a public relations issue that has drawn attention and interest of different stakeholders and publics. Some of the consequences evident as a result of this issue are that investors have dumped the bank’s shares leading to falling in price by about 4%. From a public relations perspective, this is an issue that has to be addressed immediately in order to protect or repair the bank’s reputation and image from damage. The discussion in the report shows that …show more content…
in order to address the issue, publics that this issue has created should be identified and linked to the issue appropriately. Thereafter, concerns and interests of each category of publics have to be established. From this, it should lead to developing a media campaign strategy to address concerns of different publics. The media campaign should aim to inform, share information, create awareness, educate, and provide a way forward regarding the issues. The Commonwealth Bank of Australia (CBA) is the biggest bank in Australia.
However, recently, CBA was accused of engaging or facilitating money laundering activities contrary to the Anti-Money Laundering and Counter-Terrorism Financing Act (Roddan, 2017). The bank allowed anonymous deposits of huge cash suspected to be from syndicated criminal groups including terrorists (Yeates, 2017a). As a result of this, the AUSTRAC commenced legal actions against the bank for over 53,000 contraventions of the Act. The allegations and legal action are going to destroy or damage the bank’s reputation and image because, already, some investors have abandoned the bank after learning the legal action against it (Yeates, 2017b). The reputation problem that CBA faces frames the discussion in this paper, which will include defining concepts of stakeholders, publics and issues; the public relations issue CBA is facing; publics this issue is creating; and the mutual significance of organisation, publics and …show more content…
issue. 1.1 Issue Statement The CBA’s reputation is being threatened by the legal action being undertaken by the regulatory body AUSTRAC.
CBA is accused of failing to report over 53,000 transactions for more than $10,000 as required by the law (Yeates, 2017a). The bank is also accused of failing to undertake a proper anti-money laundering risk assessment in 2012 when it was rolling its ATMs. The bank’s compliance system failed to detect or report all breaches of the regulations as it would be expected for a bank of a status of CBA (Ryan, 2017a). These are issues of concern and the bank must have a strategic response to them given that they are receiving negative coverage in the media, thus damaging the bank’s reputation among stakeholders (Liu & Fraustino, 2014). A reputational damage is likely to have far-reaching adversarial consequences including loss of customers, investors, the financial cost in terms of fines, and loss of shareholder value as evidenced by the declining share value (Holtzhausen & Roberts, 2009). This media report provides a discussion how the public relations issue that CBA is facing creates publics and the mutual significance of organisation, publics and issue in relations to the scenario at the
CBA. 2. Stakeholders, publics and issue at CBA 2.1 Stakeholders, publics and issue Before taking action to tackle the public relations issue that CBA is facing, it is important to diagnose the environment to make sure the bank is aware of its stakeholders, publics, and issues as they evolve. Stakeholders and publics have been used interchangeably, but they are two different concepts. Stakeholders are ‘general categories of publics linked to an organisation such as employees, investors and customers’ (Grunig, Grunig & Dozier, 2002, p. 2). An organisation establishes a relationship with stakeholders who are affected by actions of the organisations. An organisation is supposed to promote and maintain an ongoing communication with stakeholders in order to create a stable, long-term relationship to minimise conflicts occurring in the relationship (Kitchen, 1997, p. 93). The publics originate from stakeholders; however, stakeholders turn into publics when they recognise consequences originating from the actions of an organisation (Kitchen, 1997, p. 94). For an organisation facing a problem, it has to research in order to identify and segment its publics; thereafter, an organisation has to make the effort of involving publics in the decision process to manage conflicts. A public relations issue originates from problems that publics perceive to exist as a result of consequences of actions of an organisation (Grunig, 2013, p. 124). Public relations have to anticipate issues and manage how an organisation is able to respond to the issues. Media plays an important role in creating and expanding issues and the coverage of the media of the issue may facilitate production of other publics or increase information and awareness among existing publics. 2.2 Target publics As a group of stakeholders, publics are either internal or external and considered to be facing a similar problem, recognising the problem exist and organising themselves so that they can be able to do something about it (Wandel, 2005). According to Hallahan (2001), there are five publics: active, aroused, aware, latent, and inactive. These five publics are defined by the level of knowledge or awareness about a particular issue, which can be high or low. Besides, publics are defined by the level of involvement in the issue of concern (high or low) (Grunig, 2013). The discussion finds that the type of publics involved in the CBA issue is active, aware, and aroused.
One year ago, on September 8, 2016 the Consumer Financial Protection Bureau(CFPB), the Los Angeles City Attorney and the Office of the Comptroller of the Currency (OCC) fined Wells Fargo Bank $185 million, alleging that more than 2 million bank accounts or credit cards were opened or applied for without customers' knowledge or permission between May 2011 and July 2015. This essay will discuss the Wells Fargo scandal by explaining how the event happened and describing how the organization approached handling a response to the crisis. This will be seen, firstly by describing the how the scandal happened, and what were the causes, secondly by discussing the reaction of the company in front of the situation, how they dealt with the crisis and then
The banking system in Panama makes use of the advanced modern technologies. In Panama City, there are approximately 100 internationally renowned banks. The presence of strict regulations regarding the banking sector by the government has seen the banking sector grow tremendously (Arboleda & Martín 152). For instance, the Panamanian government has come up with strict banking rules and guidelines, to scrutinize all the banking practices so that the banks can give good banking services to all people. To ensure this occurs, the government has ordered the submission of monthly auditing reports from all the banks to the National bank of Panama and to the Panama’s National Banking Commission. All the depositors in any bank need sureties of their securities,
Public relations are the practice of distributing the information between an organisation or individual and the public. The aim of PR practitioners by the client is often is to persuade stakeholders, partners, employees, investors and most importantly, the public. The practitioner’s communication stance is reaching the individuals or organisation ultimate goal. However many can examine and scrutinize public relations ethics to assert a PR problem within the industry. All PR organisations and individuals have a code of ethics of which the professionals are expected to follow. Regardless of these guidelines, ethics in individual practices seem to prove continuous and consistent violation worldwide. The James Hardie Industry, a company that is known for knowingly using products that caused thousands of people throughout Australia to grow to become sick and even resulting in death, from its products that produced massive profits is a prime example of the PR problem. However ethical communication and critically reflective practices are procedures that benefit both the public and the organisation when use correctly, opposite to the James Hardie case.
This begs the very important question, what exactly is shadow banking?. It first originated from remarks by economist Paul McCulley as a description of a large segment of financial intermediation that is routed outside the balance sheets of regulated commercial banks and similar depository institutions. This routing of the information outside the balance sheets is the key reason why financial regulators and economists have so named this industry. The spotlight on Sh...
During the past year Wells Fargo, a well-recognized bank of the United States, has been trying to clean its name and the mess it got itself into, when it was brought to the public that the bank was involved in generating fraudulent checking and savings accounts for its clients without their knowledge or their authorization. “The way it worked was that employees moved funds from customers' existing accounts into newly-created ones without their knowledge or consent”
In those cases it becomes extremely important to stay on top of those discussions. ING-DiBa AG did very well with the “sausage scandal” in Germany where DiBa published an ad with a German basketball pro (Dirk Nowitzki), who was happily eating a piece of sausage in a DiBa commercial. As a result militant vegans and vegetarians used this as a platform to start huge negative propaganda on Facebook against meat eaters and against DiBa, obviously supporting the meat consumption. As DiBa dealt with this very professional and successfully, it is often used in the press as an example for a perfect reaction on bad social media. Thus, ING Wholesale Germany benefits from having the knowledge already within the Group. If needed, it should be fairly easy to build upon this and use this for the wholesale banking
In BBB Bank, a major issue in regards to ethics are the sales tactics of the sales staff. As their objectives were set with rewards based on sales value and volumes, their main focus was selling as many products with the highest value possible. This means that they lost sight of the customer and what it best for them. As a result, other internal departments have been impacted and it had a negative impact on BBB Bank’s reputation.
High school seniors takes deep breaths and parade onto the stage. The beginning of a new chapter awaits as they make the journey from one point of the stage to the end. They reflect on what they have been taught in those many years of high school. The most terrifying fact while graduating high school is the next step: making it on their own. Because they have taken part in the appropriate classes, the students are certain that they have gained the correct knowledge to begin making their mark on the world. In high school, it is crucial to achieve the appropriate classes in order to feel ready to take on the world ahead as an adult. However, many students lack proper education. One key example is financial literacy. Financial literacy is the
By combining and analyzing a number of information from the cross-selling scandal and other similar cases of other companies, we suggest four methods which help Well Fargo to overcome the scandal and regain its loss and reputation. Although cross-selling method is resulting in significant profit loss and reputational damages, it has been successfully used to increase sale revenue for other companies such as Amazon, Bank of America, Best Buy, and Gap. Therefore, instead of prohibiting this practice, the management should develop an effective cross-selling campaign in order to generate profit for both Well Fargo and its customers. Below are four solutions along with specific explanations which the management can consider to resolve the company’s
Standard Chartered Bank support flexible working hours. It is because energy efficiency and productivity can be increased by flexible working hours and it usually cause the higher employee morale and enthusiasm. But managing an employee who has a flexible working hours can be challenging according to the finding part above. First of all, Standard Chartered Bank should analysing the advantage and costs of the flex time program to decide whether flex time is viable for your business. If it is viable, evaluate the type of flex time and planning a best and suitable plan for your business. Second, determine which level of employee are most conducive to flex time program, and document the reasons to prove that they determine with
MYOB Premier provides powerful time-saving tool which enable users to do bank reconciliation on the quickest and easiest way possible. Performing bank reconciliation can be time-consuming process and yes, boring, especially if you are not able to reconcile the balances after several attempts, and it leave you feeling helpless and feel less efficient.
Peat and Mason, emphasises on the importance of fines in realizing credible deterrence by showing different cases whereby The Financial Services Authority (FSA) predecessor of FCA, imposed fines on firms and individuals in the event of lax supervisions and unauthorized trading. However, fines as a mechanism to deter violation of law has
Financial statement fraud is very detrimental to the company because it can lead to several consequences including: a) the need for investigation; b) remediation efforts; c) negative market reactions; and d) examination by researchers (Trompeter, Carpenter, Desai, Jones, K. L., & Riley Jr, 2012). Moreover, Tugas, (2012) argue that financial accounting fraud have place the accounting profession in bad light. Even, Beasley, Carcello, and Hermanson (1999) explain “that consequences of financial statement fraud to the company often include bankruptcy, significant changes in ownership, and delisting by national exchanges.”
When a report is made, such report is not to be taken to breach any restriction on the disclosure of information. Good faith is essential ingredient to such protection. If a report is made in bad faith, without any justification, it constitute a breach of the subjects’ right to confidentiality and is actionable in civil courts. Recommendation 21(a) of FATF requires that: Financial institutions, their directors, officers and employees should be protected by law from criminal and civil liability for breach of any restriction on disclosure of information imposed by contract or by any legislation, regulatory or administrative provision, if they report their suspicions in good faith to the FIU, even if they did not know precisely what the underlying criminal activity was, and regardless of whether illegal activity actually occurred.
A few sources of finance are short term and ought to be paid back within a year. Other sources of finance are long term and can be paid back over several years.