Banks have been told to stop selling customers products they don't need.
A major review of the conduct and culture of our biggest banks found that many Kiwis don't trust them.
It's calling for stronger powers to force banks to behave, and the Government says it will act if required.
"Some banks appear reactive at best to these issues, and complacent at worst," says Financial Markets Authority CEO Rob Everett.
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The report was triggered by evidence of severe customer abuses in Australia.
It did not find evidence of widespread misconduct, but their findings were enough to prompt a stern warning from the Government.
"Banks would do well to heed the guidance they've been given around upping their game," says Prime Minister Jacinda Ardern.
The review involved 391 interviews with 572 bank staff across 13 towns and cities, as well as recommendations to improve the management of misconduct. It specifically called for banks to phase out incentives for staff selling financial products.
"Sales incentives that are mostly loaded towards volume end up having bad outcomes for the customers," says Mr Everett.
These outcomes were highlighted in a survey of 2000 bank customers, where two-thirds said they trusted their banks but more than half did not trust the industry.
A quarter said they were offered banking products they didn't need, and 15 percent felt pressured into buying unwanted products.
Consumer New Zealand's been raising concerns about bank behaviour for years, and hopes the latest report delivers better outcomes for customers.
"What I hope they will get is something that is useful for them, that meets their needs, that's not junk and not there just to make the bank money," says CEO Sue Chetwin.
Banks are making plenty of that, with Westpac posting a $1 billion net profit on Monday morning.
Reserve Bank Governor Adrian Orr is urging banks to put some of that profit into customer-focused systems.
"At the moment I don't have confidence that banks are willing to go beyond the minimum regulatory needs," he says.
The report has also highlighted gaps in those regulatory needs - urging the Government to tighten regulations.
Banks have been given until March to show how they're going to up their game.