Thematic review of bank conduct and culture

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Thematic reviews

In 2018, we completed a joint review with the Financial Markets Authority into the conduct and culture of New Zealand's 11 largest retail banks. The review was the first of its kind in New Zealand. This page discusses the findings of the review and next steps.

Published:

Last updated:

Published reports

Culture and conduct review report

PDF | 615KB

Consumer survey carried out for the report

PDF | 878KB

About the review

11 retail banks that account for 99% of household deposits were reviewed over a four-month period. This comprised 391 interviews with more than 500 bank staff in 13 towns and cities, including directors, managers and frontline workers.

We (the Reserve Bank of New Zealand and the Financial Markets Authority) sought input from six banking sector stakeholders including consumer advocacy groups, bank workers’ unions, the Banking Ombudsman and NZ Bankers’ Association. We also commissioned an external provider to carry out a consumer survey of 2,000 bank customers.

The Financial Market Authority completed its own separate thematic review into bank incentives structures, published on 15 November 2018.

Bank Incentive Structures review report on the Financial Market Authority website

What the review found

We found significant weaknesses in the governance and management of conduct risks. These weaknesses resulted in a number of issues needing remediation.

We concluded banks need to significantly improve their approaches to identifying, managing and dealing with conduct risk.

We also found a small number of issues related to poor conduct by bank staff, which the banks were asked to follow up. However, we did not consider that widespread misconduct or poor culture issues existed across banks in New Zealand.