A big report into New Zealand banks has been released today by the Reserve Bank and Financial Markets Authority, spurred by Australia's Royal Commission into misconduct in the financial services sector. Commerce & Consumer Affairs Minister Kris Faafoi said the industry was now 'on notice'.
Here's the key points.
11 banks:
ANZ, BNZ, ASB, Westpac, Kiwibank, TSB, Southland Building Society, Rabobank New Zealand, Heartland Bank, The Co-operative bank, HSBC.
• Bank boards need to take ownership by deciding what information they need to know customers are having good outcomes. Management need to come up with framework and metrics to collect conduct data.
• Banks need to be proactive about identifying and remediating issues. Remediations should be prioritised.
• Strengthen processes and controls to prevent, detect and manage conduct and culture issues.
• banks need to educate their staff on what good conduct and culture looks like and have ways to report poor conduct.
• Remove incentives linked to sales measures.
• Banks have until the first performance year after September 30 2019 to implement changes to their incentive programmes.
• Banks will need to provide the regulators with a plan for how they will address individual concerns about them by March 2019.
• They will then need to report on their progress implementing their plan.
• Regulators will take action if they not happy with progress or urgency.
Three Barfoot & Thompson agents pleaded guilty to unsatisfactory conduct in the case.