Home Affairs Minister Peter Dutton is backing the record penalty handed to the Commonwealth Bank after it breached anti-money laundering and counter-terrorism laws more than 50,000 times.

As part of its settlement with the financial regulator AUSTRAC, CBA will fork out $700 million dollars and cover additional legal fees.

The bank failed to file 53,506 reports of transactions worth $10,000 or more through its intelligent deposit machines on time.

AUSTRAC requires the reports to monitor where the money is going.

“There’s obviously been a massive failure at the CBA to get the right culture in place, they breached their obligations under the law and they’ve paid a very heavy penalty for it.

“And it should be a very clear message to other banks and to other financial institutions that we do need people to comply with the law, they need to report case transactions.

“And we need to recognise that if the transactions aren’t reported then criminal syndicates, terrorist groups will then start to use the system to get around the reporting requirement.”

Mr Dutton is also issuing a warning to financial institutions, saying criminal organisations are more sophisticated than ever.

“I think they’ve tested systems and I think where they’ve found a weakness in the CBA they’ve gone back and tested it again.

“Then I think the word has just spread within that criminal community that this is a weakness, a vulnerability that can be exploited.”

The Home Affairs Minister says agencies are looking into prosecuting those who have moved “money in this way”.

“If it ends up in the hands of a terrorist cell or it ends up in the hands of a drug syndicate there are very real human costs out of it.”

Click PLAY below for the full interview