Consumers will now be able to find out how many and how quickly their bank handles complaints.
From today an industry-wide dashboard will show complaint data collected by the banks and reported to the Banking Ombudsman for individual banks as well as their market share, the time complaints take to resolve, and the proportion resolved.
The dashboard was originally launched last year following recommendations from a conduct and culture review of the banking sector carried out by financial regulators the Reserve Bank and the Financial Markets Authority.
Nicola Sladden, the Banking Ombudsman, said owning, fronting, and learning from complaints led to better outcomes for customers.
"Sharing complaint data is a big step toward greater transparency and accountability."
The dashboard shows 27,837 complaints were received by banks and reported to the ombudsman in the last three months of 2020, that was up from the 21,468 in the three months to June 30, 2020.
ANZ had the largest share of banking complaints, outweighing its market share.
It had 45.6 per cent of complaints but only 29.6 per cent market share.
An ANZ spokesman said the dashboard was a measure of how well banks captured complaints, rather than the number of complaints they received.
"The figures show we don't sweep complaints under the carpet. Our high number is because we're the largest bank and we have very thorough processes in place for voluntarily capturing and managing complaints – no matter how small."
"We strongly encourage staff to note down any complaints they receive so we can identify issues an improve them, and have done for years. We believe that by voluntarily capturing complaints, and listening to what customers are saying, we can identify service issues and improve them."
He said last year the bank made 34 changes to products, services or processes in response to customer complaints.
"We also have a programme of removing or reducing fees in response to customer feedback."
The ANZ spokesman said market research from independent firm Camorra showed major banks received roughly the same proportion of complaints as each other.
Westpac had the second highest percentage of complaints at 16.9 per cent but this was lower than its market share of 18.6 per cent.
BNZ had the third largest percentage of complaints at 13.3 per cent but that was also lower than its market share of 18.8 per cent.
ASB had the lowest share of complaints of the major banks at 10.6 per cent compared to its 19 per cent market share.
Kiwibank's share of complaints was also higher than its market share. It had 5.5 per cent of complaints compared to its 4.2 per cent market share.
Bank of China took the longest time to resolve complaints taking an average of 19.9 days compared to the average time of 3.3 days. Rabobank was the quickest to resolve complaints at 1.5 days.
While Heartland Bank had the lowest percentage of resolved complaints at 88 per cent compared to the average of 98 per cent.
Sladden said the purpose of the new individual bank data was not to compare raw numbers.
"Direct comparisons might not give an accurate indication of service levels because banks vary in size, ability to capture complaints, and they offer different products to the public."
She said it was inevitable that things went wrong sometimes but what mattered was how the problems were put right.
"Banks deal with hundreds of thousands of customers and process millions of transactions every day.
"High complaint numbers could signal a strong commitment to capturing and learning from complaints, no matter how small."
Sladden said the real value was in the trends, issues and insights which the data would give over time.
The ombudsman is also launching a whistleblowing service for bank workers for reporting any wrongdoing at the banks.
"There is a strong connection between the environment banks create for staff and the resulting outcomes for customers," Sladden said.
"Bank staff can now raise their concerns about behaviour or practices at their bank through this independent service, which will be run as a separate arm of the Banking Ombudsman Scheme. Bank staff can speak up anonymously, and their concerns will be managed and reported back to banks for investigation. The new service will supplement banks' existing whistleblowing channels."
Minister of Commerce and Consumer Affairs David Clark said New Zealanders rightly expected banks to operate with high integrity, and to treat their customers and staff fairly.
"These initiatives will help achieve higher standards of conduct, culture and customer care across financial services in New Zealand."