The final report of the banking royal commission has caused shock waves around Australia.

Treasurer Josh Frydenberg has promised action on all 76 recommendations coming out of the banking royal commission’s final report, which was released on Monday.

It found shocking evidence of misconduct and greed in the Australian financial sector, at the expense of customers and businesses.

“From today the banking sector must change and change forever,” Mr Frydenberg told reporters in Canberra on Monday.

“The price paid by our community for this misconduct is immense, and goes beyond just the financial.

“There have been broken businesses and the emotional stress and personal pain has broken lives.”

The regulators, who copped criticism for being too weak on financial institutions, will be given more resources and stronger powers.

“If nothing else, the public is entitled to expect that the law is applied and enforced,” Mr Frydenberg said.

Lessons learned?

Head of the Australian Banking Association and former Queensland premier Anna Bligh said banks accept the recommendations of the report.

“Let me be very clear – banks are determined to learn the lessons, to fix the problems and to make it right.

“Banks understand that these failures have caused deep hurt, suffering and heartache for far too many customers and they’re sorry for the pain they have caused.

“Don’t judge banks by their words. Judge them by their actions in the coming weeks, the coming months, as they implement this report.

“Let me be very clear – banks are determined to learn the lessons, to fix the problems and to make it right.”

Property Council chief Ken Morrison said it was important not to “break the economy” as policy makers seek to fix the banks. 

Mr Morrison noted the changes proposed for the mortgage broking industry which could impact on the residential property industry. 

“Mortgage brokers account for more than half of all home loans settled and are a vitally important source of advice and access to competitive finance for Australian property buyers,” Mr Morrison said. 

“The abolition of trail commissions and the proposed shift in future to a ‘borrower pays’ model for broker commissions will need to be very carefully managed so that the objective of better outcomes for consumers is achieved without making it harder for qualified borrowers to find and secure competitive finance for property purchases.”

In a statement, the Finance Brokers Association of Australia said “it’s very disappointing that the royal commission wants to destroy some 20,000 small businesses for the monetary gain of the big banks”.

“We trust the government will see clearly on this and continue to work extensively with our industry to improve consumer outcomes.”

While the Finance Sector Union said “these are mostly cosmetic changes rather than structural”. 

Consumer groups react

Consumer group CHOICE said the report – which has drawn on more than 10,000 submissions and 69 days of public hearings – was a “once in a generation” opportunity to clean-up the sector.

But just how much things change will come down to the banks, chief executive Alan Kirkland said.

“This represents a key turning point for the industry and its lobby groups: will they pretend to accept the recommendations then lobby to undermine them behind closed doors, as they have with every other major reform?” Mr Kirkland said.

“Or will they realise that if they want to win back community trust, this time they need to act with integrity?”

Consumer Action chief executive Gerard Brody said the final report’s recommendations should deliver improved standards in the sector, including by closing “loopholes” in laws protecting customers.

But he anticipated it could be hard to bring the industry around to changes.

“Commissioner Hayne pointed to a reluctance of some entities to admit they have done the wrong thing, and even continuing some problematic practices,” he said.

‘A dark day’

Shadow treasurer Chris Bowen said Labor would support all 76 recommendations in principle, in what he called a “sobering report”.

“Banks and financial institutions should work on an ethical basis … they should be above all, ethical,” Mr Bowen told reporters in Melbourne.

He warned the government against weakening its response to the report, and said Labor was ready to change the laws immediately where recommendations had bipartisan support.

Opposition Leader Bill Shorten said in a statement said it was “a dark day for Australian banking and a terrible indictment on the greed of the industry”. 

“The Liberals have shown they cannot be trusted to clean up the banks,” he added.

‘Absolutely unconscionable’

Former prime minister Tony Abbott said the inquiry had exposed horrific conduct by banks and their staff and that should not go unpunished, But that didn’t mean the whole system was rotten, he added.

Earlier, Influential Senate crossbenchers Pauline Hanson and Derryn Hinch said criminal charges should be laid against those found to have done the wrong thing.

“Somebody has to face criminal charges here because some of the actions were absolutely unconscionable,” Senator Hinch told Seven’s Sunrise program, while Senator Hanson said there should be jail sentences.