New Zealand’s Financial Markets Authority (FMA) has published its annual report, focusing on efforts to improve culture in the insurance and banking sector.

CEO Rob Everett says this is driven by the Hayne royal commission in Australia, and the opportunity it has presented to the New Zealand financial sector.

“We are determined to play our part, to ensure this opportunity for customer-centric conduct to be embedded permanently in the culture of the financial sector is not lost,” he says.

The royal commission has underlined the importance of good conduct, according to Mr Everett.

He warns a lack of time or experience is no excuse for companies found to be non-compliant with FMA-relevant legislation.

The regulator’s response will be proportionate to the risk of harm, he says.

Mr Everett says the preference is for facilitating good conduct rather than responding to poor behaviour. This depends on companies having the same commitment to putting customer interest at the heart of everything they do.

The FMA report says initial responses from insurers and banks to its conduct and culture review show some have not fully embedded conduct risk, governance and oversight into their operations.

The regulator is now conducting on-site reviews of companies to verify the initial assessment.