"In New Zealand, half of our population have some form of debt, with 24- to 35-year-olds the most indebted age group, which brings up questions about how our banks service different, less-wealthy demographics and whether their appetite for risk is changing as a result.
He said this posed some big questions for chief executives in the sector.
"Are NZ banks ready for a wider change to their banking models because of a change in their customers' circumstances?
"From an ageing population to one with different levels of wealth, banks will seek to be more responsive to our shifting demographics."
The report also points to the constantly changing technology environment and how consumer behaviour is evolving.
Shuttleworth said today's customers were always online and work with better resources than they had a decade ago, which makes them confident in finding the best offer at the best price and via the best service.
"New Zealand banks will need to provide what consumers want with more intimate, immediate communications and a seamless digital experience - because FinTechs are
increasingly using these techniques to get closer to their audiences."
The report calls on banks to explicitly organise their business around their customers and simplify their products and services.
It also says smaller banks are the way of the future.
"They may not have fewer customers, but they will have a clearer and narrower view of who their natural customers are."
The report said banks should also make the most of their partnerships, focus on specific areas of innovation, embrace regulation and put their culture to work.