Prime Minister Jacinda Ardern has issued a warning to banks, saying "this isn't good enough", after a report released today told New Zealand's banks to change their culture and remove sales incentives.
Speaking at a post-Cabinet address from Parliament today, Ms Ardern had some stern words aimed at the banking industry.
"The findings are a concern to the Government," Ms Ardern said. "We want a fair banking system that operates in the interest of all New Zealanders.
"Unlike Australia, the problems don't appear to be as widespread. However, there are clearly weaknesses within the banking system and processes that have resulted in some instances of poor conduct and as a result customers have been worse off, this isn't good enough.
"We will be taking a good hard look at gaps in the banking regulation system," Ms Ardern said.
Her comments came as banks have been issued a warning to change their culture in a landmark report into banking conduct.
The report by the Financial Markets Authority and the Reserve Bank does not consider there to be widespread misconduct or poor culture issues across NZ banks, as has been discovered by a Royal Commission in Australia.
However, the report identified a number of problems with the management of "conduct risks". That leaves banks "vulnerable to misconduct".
The report calls for banks to remove all sales incentives for staff – such as selling banking products to customers.
About 431,000 customers have "recently" been affected by banking issues such as being incorrectly charged fees or interest, at a total cost of $23.9 million.
Other issues include incorrect interest rates being applied to credit cards, fee waivers not applied consistently and inappropriate offers of credit sent to customers.
A small number of cases of poor conduct by banking staff – such as inappropriate lending, fees outweighing benefits and manipulation of customer and branch records - were also identified.
SHARE ME