In its July 2023 “lettre de l’observatoire de l’épargne“, the AMF (Financial Markets Authority in France) notes a rejuvenation of equity investors, initiated during the Covid 19 crisis.

While half of all shareholders are still over 55, the proportion of young shareholders (under 35) has risen from 7.6% in 2018 to almost 20% in the first half of 2023. The overall rate of equity investors, meanwhile, has remained stable at around 6%. At the same time, the shareholding rate of the over-45s has fallen.

Almost 40% of new equity investors are under 35. Even more surprisingly, the under-25s hold more shares than the 25-35s. The under-25s will hold 11.2% in 2023, compared with 8.1% for the 25-35s!

These data come from daily transaction reports sent to the AMF. These are the mandatory MiFIDII reports sent by investment service providers.

Increasingly responsible investors…

While interest in responsible investment remains moderate among the French population, it is high among young investors. Since 2022, they have accounted for half of all new subscribers to sustainable financial products, according to a study carried out by Opinionway for the Autorité des marchés financiers (AMF).

According to the AMF letter, 58% of under-35s are interested in sustainable finance. More of them (42%) have a good image of it than the over-65s (24%), and plan to invest part of their savings in it in the short or medium term (44%, versus 15%). Half of all new investors in responsible funds are under 35. This interest seems even more pronounced among young women.

These results are in line with a Neuroprofiler 2022 study. It shows that 80% of people under 40 want to have an impact through their investments. By contrast, the figure is only 60% for older people.

The need for better financial education for young people

Young French people’s new enthusiasm for equity investing and sustainable finance is good news for economic development and social and environmental protection. However, it must be accompanied by appropriate financial education!

Indeed, the excesses of certain trading applications aimed at a young audience. One example that quickly springs to mind is the Robinhood app in the USA.

The latter has been criticized for encouraging excessive speculation. In particular, the use of gamification elements such as confetti animations when executing an order. The gamified practices of the app and the possibility of having a large overdraft on the app were even blamed in 2020 for the suicide of a 20-year-old trader. He had incurred over $700,000 in debt on the app.

Meanwhile, financial authorities are constantly raising the alarm about online scams and fake sites. They promise enticing investments, including sustainable ones, and young investors are particularly hard hit.

France lags behind in financial education

To avoid these abuses, good financial education remains essential. Yet France is far from a model in this respect. According to the 2016 Allianz study “Money, financial culture and risk in the digital age”, France ranks last in financial culture out of 10 European countries, behind Portugal and Italy. On the other hand, Austria, Germany and Switzerland top the ranking.

Just under half of French respondents were able to answer questions on inflation and interest rates. The study also shows that the Millenials generation (born in the 1980s and 1990s) has the lowest level of financial literacy.

According to the July 2023 AMF letter, the lack of financial education also concerns sustainable investment topics. Individuals, including young people, feel they have too little knowledge on the subject to judge the true sustainability of the investments they are offered.

Aware of these limitations, in 2023 the French market authority stressed the importance of financial education for young people. It emphasized its desire to multiply initiatives on the subject.

“This new generation of retail investors is an asset for the Paris financial center,” says AMF Chairman Marie-Anne Barbat-Layani. “The AMF will continue its educational initiatives to help shareholders, especially novices of all ages, acquire a stock market culture with a long-term perspective.

Influencing young people in the right direction…

In March 2023, with an accessible style and modern aesthetic, the AMF published a guide to employee savings. This partnership with Les clés de la finance aims to encourage young people to save for retirement.

The AMF and ARPP are launching the Responsible Influence in Finance certificate in September 2023. Generation Z young people (under 25) have become very sensitive to influencers. Particularly on the social networks TikTok, YouTube or Instagram. According to a 2023 AMF analysis, 11% of investors today get their information from influencers on social networks, most of whom are under 25. According to a 2022 Neuroprofiler survey, the new Generation Z would even trust influencers more than bankers!

Yet, despite their aura, their financial education often remains limited. They therefore represent both a real opportunity to educate young investors… but also a real risk if the information transmitted is erroneous.

The AMF certificate of responsible influence in finance

Aware of this problem, the AMF hopes to professionalize this activity and protect young investors with this “certificate of responsible influence in finance“. To date, this certificate has been awarded to almost 1,000 French influencers.

The course covers investment products, different types of services and financial providers. The two authorities also detail the rules to be respected when communicating about an investment offer, specifying the products and services whose advertising is prohibited. A minimum of 75% correct answers to 25 multiple-choice questions are required to validate this certificate.

An alternative approach to effectively educating the younger generation about finance, as yet little exploited by financial regulators, is that of gamification. Indeed, this technique can also facilitate learning if used wisely.

Numerous publications, including from regulators such as Consob in Italy, have demonstrated the effectiveness of this learning method for financial subjects.

These studies show that gamification enables long-term memorization of financial principles. In particular, by encouraging young investors to return regularly to a learning platform. Rewards, surprise effects and micro-learning are just some of the ways in which gamification stimulates engagement.

An effective approach to educating young investors… and their influencers!

L’article Younger equity investors and financial education: a priority for the AMF est apparu en premier sur Neuroprofiler.

Read on to find out all the interesting facts.

2.1% of the population and many men…

In 2022, retail investors represented a whopping 2.1% of the French population. Between 2019 and 2022, we went from 1.15 to 1.43 million active investors. This is certainly an increase but… in reasonable proportions!

The proportion of men is much higher. 70% versus 30%.

In comparison, the proportion of individual investors in Europe would fluctuate around 4% (Source: Eurofi – February 2022) but more than 20% in the US. In Finland, the figure would be close to 35%.

Younger and younger investors

Since 2020, according to the AMF study, there has been strong growth in the number of investors under the age of 35.

The number of transactions per year increases with age up to 54 and then decreases. However, it remains modest, with an average of 2 to 3 transactions per year. The number is slightly higher for male investors.

A strong appetite for equities

The vast majority of transactions (78%) are in equities, followed by ETFs and complex instruments. The myth of the stock trader thus persists.

Bonds, which are a less risky form of investment, are only in fourth place. The persistence of low interest rates during the period has played its part in that.

Four interesting lessons for financial education

Despite these figures indicating this emerging trend, the share of retail investors in France remains extremely low compared to Europe. There are several reasons for this low figure, but the lack of financial literacy and interest in these subjects surely plays a role. Financial education is therefore more necessary than ever.

Paradoxically, the most widely used financial product is also one of the riskiest: shares. Here too, better education of future investors could be beneficial.

The fact that the proportion of young investors is increasing is encouraging. The new online brokerage schemes certainly play a role. Financial education should also be targeted at this population. We know that their needs and especially their way of learning are different. Gamification is more necessary than ever.

Finally, gender equality has not crossed the investment border either. Here too, personalised financial education can play a positive role.

Now more than ever, investors need solid financial education to make better decisions, better suited to their preferences. Please feel free to make an appointment in order to discover the EduProfiler, our gamified financial education platform.

L’article Retail investors in France, an emerging species? est apparu en premier sur Neuroprofiler.

The new generation of Millennials, who were born in the digital era, is used to have an access in one click to most of the services, at anytime, and in a customized way. They are not interested in traditional finance which is considered to unethical and complicated. In fact, they usually fell more appealed by crypto-currency platforms and do not hesitate to quit their parents’ bank for a more modern option.

How can the banks attract new customers with gamification ?

Understand what you are investing in, effortlessly

Euro funds, unit of account, volatility, yield… The world of investment is technical.

Yet, Millenials are very reluctant to invest in what they don’t understand. Customers trust their financial advisor’s expertise much less than they used to. Financial education becomes a necessity… as long as it requires little effort. Used to fun learning applications such as Duolingo or Drops, these new customers are not satisfied with the traditional paper brochures describing financial products in 2à pages.

Today’s investors expect a fun and personalized digital learning.

A service available at any time, in different formats

The model of the bank accesible from 8am to 5pm is no longer in line with the expectations of the new generation.

This new generation wants an immediate response to their financial concerns, including on weekends. Beyond the traditional phone call, they also expect several options in terms of communication channels (instant messaging, chatbot, email…).

Change the bank’s reputation

Subprimes crisis, scandals of greenwashing, Kerviel case…

The financial world is perceived negatively by many European investors. What is more, it is judged unethical and not transprant. The first challenge for financial institutions is therefore to change this negative perception by showing. For example, that an investment can have a positive impact on th real world, from an economic point of view, but also from a social and environmental one.

Gamification, a first response to these new expectations

Previously reserved for video games, sports, etc., gamification is now a real marketing strategy. A task considered as “boring” can be much more engaging for customers thanks to gamification, codes and video game elements (achievement badges, reward system, levels etc). This allows to build customer loyalty, and therefore to sell products more efficiently.

Applied to banking, the same principle makes it possible to make complex financial concepts more simple and accessible. However, this technique is not common in the financial world.

IKANO BANK (the digital bank of Ikea), for instance, published a game where they rewarded the users who had saving behaviours and punished those who wasted their money. The winner of the operation could win up to €11,000 in the form of a deposit. The initiative was a great success, with over 1.5 million participants.A gamified solution adapted to investors

Neuroprofiler offers the EduProfiler, an education application that helps financial institutions’ customers better understand the mechanisms of financial products so that they purchase financial products suiting their needs. 

Personalization, interactivity, accessibility at any time, popularization… gamification seems to bring many answers to the generational challenge faced by financial services today.

Nevertheless, if you would like to have a live demonstration of the solution, feel free to make an appointment on our calendar. We will more than happy to answer all your questions !!

L’article A new era with gamification for the financial services est apparu en premier sur Neuroprofiler.

L’article Next gen’: what will the bank of tomorrow look like? est apparu en premier sur Neuroprofiler.

Fintechs, like other companies, can sell their services to companies such as banks or insurers (B2B) or to individuals (B2C).

The first Fintechs, which emerged mainly in the 2000s, initially focused on providing IT architectures for financial institutions, so-called “core banking” systems.

Gradually, their services diversified by offering, for example, automated investment for individuals (robo-advisors), collective investment platforms (crowdfunding) or applications to help individuals better manage their savings.

A growing number of Fintechs in the field of sustainable finance

In recent years, sustainable finance has become the norm in the investment world. The European Union has published numerous directives to classify financial products according to their impact on sustainable finance and to collect the preferences of individuals on the subject. Furthermore, the assessment of investors’ sustainability preferences will soon become mandatory for financial institutions according to European regulations.

Numerous Fintechs have emerged in recent years to respond to the growing interest of individuals in the subject and to these regulatory changes.

Examples in the sustainability area

B2B “Green” Fintechs

In order to “clean up the world of finance”, many Fintechs have recently emerged to offer directly to individuals products that have been scrupulously audited for their green impact. This is the case for Helios, Goodvest, Radicant or OnlyOne.

B2C “Green” Fintechs

In order to meet the new European regulatory requirements, other fintechs are intervening in the analysis of the impacts of financial products (Greenomy, Weefin, Fingreen…) or the evaluation of sustainability preferences, such as Neuroprofiler’s InvestProfiler product.

Do not hesitate to contact us if you want to know more about our solutions.

L’article How do Fintechs address the Sustainability Challenge? est apparu en premier sur Neuroprofiler.

Artificial intelligence: from chatbots to stock price forecasting, AI is taking over the banking and finance sector

From the back office to the front office, AI concerns all banking and finance businesses. In retail banking, the general public is already used to interactions with chatbots and other voice bots, which play the role of virtual assistants. In the background, email analyzers are running at full speed to identify the degree of urgency of the requests received and pre-fill the response that will be made to the customer according to the type of problem encountered.

By analyzing and scoring all interactions between a customer and the bank, AI is also able to shed light on consumer habits and predict the chances of repaying a loan, for example.

Artificial Intelligence is also proving very useful for applications providing investment advice. Based on a questionnaire filled in by the client, and according to the client’s transaction history, the robot advisers can propose a portfolio compatible with the client’s risk profile and can make recommendations for financial products.

In the fight against fraud, AI is set to play an increasingly important role, both in online payments for individuals and in investment banking. By spotting anomalies, AI improves the automatic detection of fraud, from insider trading to simple human errors such as “fat finger”. In the financial markets, AI is finally proving to be a valuable asset for predicting stock prices. And many other applications are yet to be imagined, as the field of possibilities opened by artificial intelligence is so large!

Blockchain: an unprecedented rise in power for an in-depth transformation of processes

Not a day goes by without a new financial institution announcing that it is going to use Blockchain technology to transform a part of its business. Foreign exchange operations, asset management, trade finance, cross-border payments… It must be said that the possibilities offered by the Blockchain are dizzying.

This technology for storing and transmitting information offers a level of transparency and security never before possible, thanks to a mechanism of linked blocks. Each block keeps track of the previous transaction and links to the next block in chronological order. Information relating to transactions is guaranteed to be unalterable, thanks to the traceability offered by the blockchain.

Because it does not require any control body and because it allows decentralized exchanges, the blockchain makes it possible to free oneself from a large number of intermediaries. However, given the colossal sums of money involved, the smallest savings made on the markets can quickly represent huge sums.

According to a study by IHS Markit, revenues generated by projects using blockchain are expected to exceed 100 billion as early as 2024 in the financial sector, reaching 462 billion in 2030.

Gamification: a way to foster customer engagement and improve financial literacy

Gamification consists of making applications that are not usually fun, to encourage certain behaviors. By breaking the codes and making the financial world more accessible, gamification makes it possible to attract the younger generations, who are more interested in a “banking experience” than in banking services in the broad sense. Unlocking vouchers when a certain level of savings is reached, setting up a system of incentive points as soon as investments are made, acting on the financial education of customers through games… Gamification can take various forms and serve multiple purposes.

At Neuroprofiler, we believe that gamification is a great tool to help your clients better understand the financial products they invest in. This is why we have developed a fun e-learning platform, based on the principles of gamification, to democratize the world of investment for savers. As a reminder, European regulations require that individuals’ financial knowledge be assessed before financial products are sold to them. Thanks to EduProfiler, you can increase the sale of your complex products by taking concrete action on the financial education of your customers, while respecting the regulations. Does this idea appeal to you? Ask for a demo!

L’article Gamification, artificial intelligence, blockchain… the major trends in the digitalization of the financial sector est apparu en premier sur Neuroprofiler.

L’article Behavioral finance: understanding investor preferences to sell better and more est apparu en premier sur Neuroprofiler.