Westpac's consumer boss believes the banking industry's relationship with the public is so poor it could damage Australia's prosperity.
Consumer bank chief executive George Frazis said the banks need to reconnect with cynical customers and improve their relationships with government and regulators.
"This fractious relationship is likely to impact the nation's prosperity - it must be fixed," Mr Frazis told a business lunch in Sydney on Tuesday.
Speaking on the eve of Westpac chief executive Brian Hartzer's latest appearance before federal MPs in Canberra, Mr Frazis said banks were waking up to the fact that there had been a divergence between their interests and those of their customers.
"This division is both real and perceived," Mr Frazis said.
"It's real, for instance, in cases where banks have provided the wrong advice and failed to immediately remedy the situation - breaching the customer's trust."
Westpac removed 11 financial planners between January 2009 and August 2015 after they offered bad advice that resulted in the bank paying $2.5 million in compensation to customers.
Commonwealth Bank said in June it had offered $29.1 million in compensation to customers who lost out as a result of its poor financial advice or incorrectly imposed fees.
Mr Frazis said opinions of banks were so low the public now see their strength during the global financial crisis - when they did not need the taxpayer bailouts handed to banks in other countries - in a negative light.
"The profitability that was seen as in the national interest during the global financial crisis is now seen by many as a sign of the disconnection between the bank's interest and the customer's interest," Mr Frazis said.
Mr Hartzer and ANZ chief executive Shayne Elliott both appear before the House of Representatives economic committee on Wednesday, with CBA's Ian Narev and National Australia Bank's Andrew Thorburn appearing on October 20.
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