The banking royal commission has revealed more systemic, shocking and unconscionable behaviour than could have been predicted and corporate watchdog ASIC may have grown "too close" to the financial sector, says former ACCC chairman Allan Fels.

"This is a turning point in the debate, because it's now out there in public that this behaviour has been going on, widespread, shocking, unconscionable," he said.

"It's worse than I thought, more systemic, more unconscionable.

"That leads to the question: What is to be done about it?"

The royal commission hearings have revealed a litany of dodgy practices in the banking and financial services industry.

These include that AMP lied to ASIC for almost a decade to cover its practice of charging customers fees for advice that was never delivered.

AMP's chief executive officer Craig Meller has since quit his job with immediate effect.

Sorry, this video has expired AMP customers charged for financial advice they never received ( Lauren Day )

The Commission also heard the Commonwealth Bank charged dead people for non-existent advice, and a couple lost their home because of poor advice from Westpac, while the bank netted tens of thousands of dollars in fees and commissions for itself and its financial planner.

Mr Fels said until now a cynical public might have thought the royal commission would only give the banks a slap on the wrist, but now that will not cut it.

He said a first order should be to separate banks and financial advice services.

"There's just a deep conflict of interest between creating financial products and then giving independent, or so-called independent, impartial advice," he said.

Sorry, this audio has expired Allan Fels advises splitting banks from financial planning arms

Mr Fels also took aim at ASIC and said its performance had been "quite poor".

"The culture of enforcement is very weak, it's possibly because they are too close to the financial sector. But whatever, it's been endemic, it's been going on a long time," he said.

It will never change adequately to deal with such big problems.

"It's become apparent that they do administrative settlements.

"When something goes wrong, they call in the offender and they have an agreement with them, instead of going to court and getting fines and sanctions."