Australia's largest bank forced to reveal it lost 20 million accounts

Signage for Australia's biggest company, the Commonwealth Bank, is seen on a building in Sydney on May 1, 2018. The Commonwealth Bank has a complacent culture and ineffective board, the country's financial services regulator said May 1 in a scathing assessment after a series of scandals. - AFP

SYDNEY: The Commonwealth Bank of Australia has been forced to reveal it lost the records of almost 20 million accounts and decided not to inform its customers, another blow to an institution already reeling from multiple scandals.

CBA's acting Group Executive, Retail Banking Services, Angus Sullivan accepted responsibility on YouTube after BuzzFeed Australia broke the story on Wednesday.

Sullivan said in May 2016 the country's largest bank found it had lost two magnetic tapes containing 15 years of data on customer names, addresses and account numbers for 19.8 million accounts. The tapes were due to be disposed of, but CBA could not confirm they were securely destroyed.

The tapes did not contained PINs, passwords or other data that could enable account fraud, Sullivan said.

The bank informed its regulators and launched an internal investigation which found the tapes had "most likely been disposed of," Sullivan said.

"The decision was taken not to alert customers given the outcome of our investigation which found the tapes were most likely disposed of," Sullivan said in the video clip.

"In these cases, we balanced the need to alert customers without unnecessarily alarming them."

Sullivan said the investigation found no evidence the data had been compromised or accessed by third parties.

"I want to assure our customers that we have taken the steps necessary to protect their information and we apologize for any concern this incident may cause."

The revelation comes at a tough time for the bank which just this week was criticized by its main regulator for allowing money laundering to flourish.

The Australian Prudential Regulatory Authority (APRA) hit CBA with an extra A$1 billion ($753 million) capital requirement and reported a "widespread sense of complacency" within the organization.

The Australian government's top finance minister, Treasurer Scott Morrison, even called for more heads to roll at the bank.

Earlier this week, Australia's largest-listed wealth manager, AMP Ltd , announced the resignations of its chairwoman and legal counsel and cut directors' fees in response to revelations of misconduct at an independent judicial inquiry. - Reuters