A tiny number of complaints to New Zealand regulators and the Ombudsman compared to the "tidal wave of complaints" in Australia is no reason to be satisfied banks there are meeting customer expectations, a government select committee was told yesterday.FMA chief executive Rob Everett and Reserve Bank governor Adrian Orr appeared before the finance and expenditure select committee to brief MPs about a review of banking culture sparked by the Hayne royal commission across the Tasman. They plan to have a final report in October, and they left open whether that could recommend a full inquiry in New Zealand as well, or recommendations for righter regulation.Over the past month Orr and Everett have met with 16 bank CEOs and received written responses from 11 banks following a request that the banks "demonstrate why either the business structures here or your business practices here lead to different outcomes" from that seen in Australia. Life insurers have been set a similar essay question, although they have been given until June 22 to respond. The regulators are now assessing the banks' responses in more depth."We are scoping areas for further investigations," Everett said. "We are constructing work programmes both across the bank sector but also for individual institutions. And we will do the same for the life insurers when those responses come in. And I anticipate some of those institutions will get site visits so teams can get on the ground and really get under the skin of what they have told us."The regulators told the committee that, so far, they had not seen evidence of the sort of widespread systemic misconduct that has been brought to light by the Hayne Royal Commission into banking misconduct.On the banks, Everett said: "we have seen plenty that we think can and should be done better, but we have not seen evidence of what you might call 'systemic and widespread misconduct'." "Plenty of places where as a supervisory regulator we think the industry can and really should up its game, but very little that would either constitute a breach of a law or would require us to come up with a really urgent response or seek the Government to change a bunch of things."Nevertheless, the two regulators are concerned that banks and life insurers in New Zealand are going "to the edge of the law". They want to see a change in culture so financial services providers aim to meet customer expectations rather than just the letter of the law. "The regulators and the legislators have tried to prescribe what good and bad looks like and the industry has just frankly gone to the edge of good and bad and sat there - and sometimes gone over the wrong edge.""We are not talking about enforcing the law here because we can do that already. What we are talking about is trying to encourage better behaviour than the minimum that is in the law. And I think the Australian royal commission is reflecting that, if you just