05 November 2018

Bank Conduct and Culture Review

The FMA and RBNZ want to ensure that sufficient levels of consumer confidence exist in the New Zealand financial system, and that this confidence is both justified and sustainable. Our expectations in the conduct and culture review are:

  • Banks should remove incentives linked to sales measures for salespeople and their managers
  • Banks should revise incentives structures through all layers of management.
  • Any bank which, by the end of March 2019, does not commit to this will be required to explain how they will strengthen their control systems to address the risks of poor conduct.
  • Changes to incentive programmes to be implemented no later than the first performance year after 30 September 2019.

Bank conduct and culture review 2018

We reviewed New Zealand’s 11 largest retail banks (see page 35) over a four-month period, to identify conduct and culture issues and risks that may be present locally, and to understand how banks detect, manage and remediate these.


Bank Incentive Structures