Prime Minister Jacinda Ardern has delivered a stern warning to the banking sector, saying it needs to "lift their game" or the Government will do it for them via regulation, or even a law change.

The Financial Markets Authority and the Reserve Bank of New Zealand released a report today after a four-month review into the conduct and culture of 11 banks that operate in New Zealand.

While the report did not find the widespread systemic issues that plague Australia, it found that banks lacked good processes to manage poor conduct, and were slow to remove sales incentives that pushed staff to sell items such as personal loans and credit cards.

According to the Reserve Bank, ANZ, ASB, BNZ and Westpac made a combined $4.9 billion, after tax, in the year to December 31, 2017.

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Ardern stopped short of saying that banking customers were being ripped off, but she said banks needed to do better.

"Banks do need to lift their game to be much better at identifying problems and risks early on and fixing them.

"There are clearly weaknesses within bank systems and processes that have resulted in some instances of poor conduct and, as a result, customers have been worse off. That isn't good enough."

Banks have been given until March 2019 to come up with a plan to effectively get rid of sales incentives and other shortcomings.

The Australian Royal Commission into misconduct in the financial services sector will report back in February 2019, and Ardern said the FMA and Reserve Bank will be watching closely to see what regulatory or legislative action to recommend.

Minister of Commerce and Consumer Affairs Kris Faafoi said changes were likely.

"I think you can expect that. The report made pretty clear there's no obligation for the banks to report on their culture and their conduct."

Finance Minister Grant Robertson said banks had started to cull perverse sales incentives, but there remained issues about what information was given to customers.

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"Financial literacy remains a long-term issue for New Zealand, but equally there have to be obligations on the banks themselves to be clear about the financial advice they're giving alongside products they're selling," Robertson said.

"They're the kinds of issues where, if there are regulatory gaps, we should close them."

Ardern said the Government would take a "good, hard look" at the industry, but did not want to nominate it for a Commerce Commission market study, as she has done for the fuel industry.

"We want a fair banking system that operates in the interests of all New Zealanders.

"Today's report is not the end of the line on this issue. In some ways, it is the beginning of closer oversight and scrutiny.

"Banks should remember that it is a privilege, not a right, to operate and customer needs must come first."

Robertson said he would consider more money for the FMA.

"We always keep under review resourcing of regulators. We'll take a look at that. The Minister of Finance has many calls on the amount of money we've got available, but we need a strong functioning regulatory system."