The prudential regulator is worried banks have spent too little maintaining computer systems, which could lead to more IT outages further eroding trust in the financial system, and warned them to boost investment spending.

A "backlog of maintenance" jobs across a "patchwork of systems" reflected a period of "persistent under-investment" in information technology, and banks are under-prepared for the government's new credit reporting and open banking regimes, said Australian Prudential and Regulation Authority chairman Wayne Byres.