The regulators (the Reserve Bank of New Zealand and the Financial Market Authority) found significant weaknesses in the governance and management of conduct risks. These weaknesses have resulted in a number of issues needing remediation. Banks’ lack of proactivity in identifying and remediating conduct issues and risks means vulnerabilities remain.
The regulators concluded banks need to significantly improve their approaches to identifying, managing and dealing with conduct risk.
The regulators also found a small number of issues related to poor conduct by bank staff, which the banks are following up. However, based on their findings, the regulators do not consider that widespread misconduct or poor culture issues currently exist across banks in New Zealand.
This report outlines the findings from the review: