Victims of banking misconduct will be eligible for more compensation and have a second chance to argue their cases if Labor wins the federal election, the Opposition has said.

Key points: Federal Labor says its proposed compensation scheme would be funded by the financial services sector

Federal Labor says its proposed compensation scheme would be funded by the financial services sector Consumers and small businesses would be eligible for up to $2 million in compensation

Consumers and small businesses would be eligible for up to $2 million in compensation The proposal also includes a provision to allow people a second chance to argue their complaints

The party's proposed compensation scheme came in response to the final report into the banking royal commission, which recommended sweeping changes to the sector.

"The royal commission has given us a lot of law reforms to do but there's really not a lot in there that is going to genuinely get victims back on their feet," Shadow Minister for Financial Services Clare O'Neil told AM.

In the Federal Government's initial response to the commission's final report, Treasurer Josh Frydenberg said it was taking action on all 76 recommendations "and in a number of important areas is going further".

The Government has already announced its own industry-funded compensation scheme, plus $30 million in taxpayer dollars that will go towards compensation owed to almost 300 consumers and small businesses.

Ms O'Neil said, unlike the Government's plan, Labor's would be wholly funded by the financial services sector, with no cost to taxpayers.

The proposal would double the compensation cap for small businesses and quadruple the cap for consumers with credit-related disputes.

Consumers and small businesses would be eligible for up to $2 million in compensation — up from $500,000 for consumers and $1 million for small businesses.

It also includes a provision to allow people a second chance to argue their complaints, and the entire scheme would be overseen by an independent board.

"Our scheme will be independent of existing bodies and that's really important because some of those existing bodies haven't themselves behaved that well in the past," Ms O'Neil said.

"Finally, our whole scheme is funded by the banks and part of the Government's scheme is funded by the taxpayer.

"We don't think taxpayers should have to pay an extra cent," she said.

Ms O'Neil said it was unclear exactly how many people were expected to come forward with a claim, but that around 10,000 people who provided submissions to the royal commission gave them a "ballpark" estimate.