NZ banks have fewer system meltdowns than their Australian parents, but analysts say problems will continue until core systems get a thorough revamp.

A survey by market research firm East & Partners found 25 per cent of Australian small and medium businesses had experienced a serious technical failure with their bank in the last six months.

The worst offender was National Australia Bank [NAB], which owns the BNZ here, with 46.3 per cent of respondents experiencing failure.

Australia's second-largest bank, Westpac, was at 17.1 per cent.

The bank's New Zealand arm suffered a major payment glitch last week, following another delay earlier in April and an online and a mobile banking hiccup in February.

East & Partners principal analyst Paul Dowling said New Zealand banks were less prone to failure than their larger parents because of lower transaction volumes and the simpler products on offer.

However, he said banks worldwide- including New Zealand- were playing "catch-up mode" with antiquated payment systems technology.

The reputational damage caused by the system outages had made the penny drop.

"The response that we've seen typically sits in two camps", Dowling said.

"They either try and patch what they've got, or in the minority of cases they look to re-engineer....the core banking system."

Complete overhaul was the response taken by the Commonwealth Bank of Australia, parent of ASB, which had the lowest level of complaints in the survey.

Most banks had gone for the short-term fix, and were becoming more adept at dealing with system failures.

"Sooner or later that's going to come crashing down around their ears anyway, but the matter is priorities, timing and money", said Dowling.

He said it was likely that bank systems would continue to play up in the short term until more extensive investments were made.

- © Fairfax NZ News