The Australian banking and investment industry has another tough year ahead as it faces high costs relating to changes in regulation and investments in IT upgrades, according to a new Deloitte report on the global sector.

"Uncertainty about the outcome of proposed changes to the regulatory environment was a recurring theme in the recent trading updates from Australia's banks," Deloitte banking partner Paul Wiebusch said.

"Financial institutions will need to allocate time and resources to both understand the potential impact of regulatory changes and meet new regulatory obligations," Wiebusch explained.

Banks are facing an array of changes to the existing legislation, including proposed changes to consumer credit law, harmonisation initiatives and proposed reforms of the financial planning industry. Meanwhile, reviews on Australia's taxation and superannuation systems are still in progress.

"Banks and other financial institutions can expect to see regulators actively applying their existing powers to monitor and oversee the industry," Wiebusch said.

Banks also face high costs from investments in technology as they continue to seek a better integration of the various legacy systems and better ways to manage risk and increase transparency, and look for more sophisticated data gathering tools to monitor their client base.

The likelihood of offsetting these costs with higher revenues remains a point of concern, as market confidence remains fragile.

"There is a heightened appreciation of the uncertainty of the pace of recovery and of the risk to emerging confidence from aftershocks like that in Greece, and before that, Dubai," Wiebusch said.