Tuesday 2nd April 2019
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The Reserve Bank and Financial Markets Authority have received responses from the 11 banks in their joint conduct and culture report. But it will take weeks before the regulators say anything publicly.
The lenders were told to lift their game by the regulators in a four-month review of the sector, and were given until March 31 to respond to various issues identified by the RBNZ and FMA report.
The regulators today said they have received responses from all banks involved, and will spend several weeks wading through the documents before making any substantive comment on the contents.
"We will make a further statement when we have completed this process," they said in a statement.
In a separate statement, the Bankers' Association said all of its members with sales incentives have committed to remove or address them for frontline staff and their managers, but wouldn't disclose what was in each plan provided to the regulators.
"We understand the urgency of providing reassurance to the public and regulators. That’s why we have acted quickly," chief executive Roger Beaumont said.
"The individual work plans for each bank have all been signed off at the highest level. That means there is buy-in from the very top of these financial institutions to make sure they’re meeting regulator and public expectations," he said.
The review was sparked by Australia's royal commission of inquiry into the financial sector, which uncovered widespread abuses across the Tasman. New Zealand lenders fared much better in the local review, with weaknesses identified, but none of the egregious behaviour occurring on this side of the Tasman, such as charging fees to dead people, charging fees when no service was delivered, and lying to regulators.
The Reserve Bank and FMA also reviewed conduct and culture among life insurers, and found the industry was vulnerable to misconduct, often ignored whether products were suitable for customers, and was too slow to make changes. Life insurers have until the end of June to provide their feedback and response plans.
The government is already moving to act on conduct, saying both banking and insurance sectors need clearer duties to their customers. It's fast-tracking legislation to protect consumers, and plans to effectively ban soft, or non-monetary, commissions.
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