Banks need to do more to shift away from a culture of risk and the excessive pay structures that prevailed before the financial crisis, an industry report said.

Banks have made progress since 2008 as top management and boards have become more involved in setting risk policy and they developed internal stress testing models, according to the survey of 62 firms released on Tuesday.

But reforms were far from complete, with risk appetite across the firms broadly unchanged, said the report by Ernst & Young, conducted on behalf of the Institute of International Finance (IIF).

The IIF, an international lobby group for banks, investment managers and other financial institutions, laid out risk management recommendations just before the height of the crisis in mid-2008 and has charted the industry's progress since.

It found that in key areas such as compensation, banks had yet to make real headway in aligning pay to risk-adjusted performance.

Although 78 percent of executives said they had reviewed compensation programs, up from 58 percent in a 2009 survey, only 40 percent said they were actually close to completing their initial rounds of changes to pay structures.

The most recent survey of banks from around the world was conducted at the end of 2010 and said many introduced new pay structures for the 2010 bonuses round, including more deferred pay and lower payouts in cash, but 10 percent of respondents to the survey said they had not yet begun a compensation review.

Banks have become far more focused on liquidity risk than ever before, one of the areas that tripped firms up during the crisis and led to the collapse of Lehman Brothers.

The report found that 92 percent of banks had made changes to liquidity risk controls, while 89 percent of respondents said the role of their chief risk officers had been elevated, with half of those polled now reporting directly to the CEO.

(Reporting by Sarah White; Editing by Jon Loades-Carter)