Cognitive Bias: ambiguity aversion
As an investor, you have three investment options for the next semester: You get €500.000 for sure You invest in a stock with a 50% of chance of earning €1M…
Cognitive Bias: The Cognitive Zoo
The tendency to avoid options for which missing information makes the probability seem “unknown.”
Cognitive Bias: Anchoring effect
You have to hire one candidate among two for a given position. You look at the reports of the HR interviews and find the following key conclusions of the reports. Sophie: smart-kind-pretty-genereous-careless-messy-lazy…
How to assess client’s ESG preferences ?
Climate change, the health crisis and corporate governance concerns have increased awareness regarding the limits of our traditional economic model. People are now looking to have a positive impact on…
Sustainability preferences under MiFID II, what does it imply ?
A growing interest for sustainable investing Global warming, governance and social tensions have increased awareness among retail investors regarding the limits of our traditional economic model. Investors are now looking…
Cognitive bias: The Marshmallow effect
Cognitive bias: Time preference. Is Your Dollar Worth More Today?
Risk profiling, financial risk and behavioral finance
Risk tolerance, risk profile, risk appetite, risk capacity... what are the differences? In financial theories, financial risk is a mathematical number, like volatility, that determines the level uncertainty (potential gains…
What is Gamification? What are its business applications?
Definition of gamification Gamification is done by applying game-design elements in non-game contexts. The term refers to the strategic attempt to enhance systems, services, organizations and tasks by providing the…
Gamification, artificial intelligence, blockchain… the major trends in the digitalization of the financial sector
The digital transformation spares no sector, and the banking and financial world is no exception. Here is an overview of the main trends in the digitalization of the financial sector.
MiFID 2: what’s new in European regulation of markets in financial instruments in 2022
Risk appetite, financial situation, level of experience, and financial knowledge... Introduced in 2007, MiFID regulations require financial institutions to know the investor profile of their customers. The objective? To ensure that customers understand the financial products on offer and that they correspond as closely as possible to their expectations. Since then, MiFID (Markets in Financial Instruments Directive) regulations have been constantly enriched to offer ever greater transparency and protection to investors. Following the financial crisis, MiFID I was improved to become MiFID II: a strengthened regulation applicable to all investment products. Among the many changes made to the text, some concern the consideration of investors' ESG preferences. Thus, from August 2022, financial advisors will have to inquire about the impact sought by clients through their investments, to offer them adapted financial products. In other words, banks, asset management companies, and investment advisory firms must now capture clients' ESG preferences in their suitability questionnaires.