In the case of the life insurance industry, there were “creaking systems and weak controls”.

The money went back to customers following conduct and culture reviews of the organisations.

The reviews were done jointly by the Reserve Bank and the FMA between 2018 and 2019.

They required financial institutions to report on any issues requiring remediation.

The remediation work showed the extent of weaknesses in systems and processes across banks and life insurers, according to the FMA Director Banking and Insurance, Clare Bolingford.

“This demonstrates the significant amount of work required by financial institutions to ensure they are identifying, rectifying, and remediating issues which, to date, have impacted over 1.5 million customers,” she said.

Last month, the FMA revealed 225 such issues resulting from creaking systems and weak controls which affected nearly half a million customers.

In that case, more than $43 million was paid in remediation.

These figures represent just one-third of issues whose impacts have been fully assessed to date.

In the case of the banking sector, there were 266 separate issues being remediated, affecting 952,000 bank customers. A total of $109 million was returned to bank customers.

Bolingford said she acknowledged the work by banks and insurers, some of whom traced back their records further than they had to.

“We note that over the past 12 months, boards have displayed a greater understanding of what needs to occur to achieve consistent fair customer treatment,” she said.

“It is likely there’s more self-reporting to come as firms continue these efforts. The more firms have looked, the more problems they’ve found. You can reasonably expect our future monitoring activities to consider how well firms have completed, and reported on, these matters.”

The work that has led to these payments is being merged into requirements of the COFI legislation which come into effect next year.