Savers’ reluctance and regulatory complexity: how to find new sources of bank profitability?

In addition to the crisis that exacerbates the reluctance of savers, financial regulations make investing even more complex. But what if the problem is the solution? Discover how to take advantage of regulations to boost ESG product sales and find new sources of profitability in this article!

Increasingly cautious investors

When it comes to investment, 2022 has started on a high note! While interest rates are beginning to rise timidly, inflation has made a spectacular breakthrough despite zero negative returns on risk-free investments, savers clinging to savings books and life insurance policies. They are shunning unit-linked products in favor of euro funds, even though they perform poorly. This situation poses a significant profitability risk for financial institutions to such an extent that it is urgent to boost clients’ assets. Except that, in parallel, the regulations provide more and more procedures to protect investors. The latest one is to consider the ESG preferences of investors in the MiFID II questionnaire.  This obligation, which will be effective as of August 2, 2022, raises fears – and rightly so – of additional difficulties in the sale of financial products.

Indeed, if you simply add a series of ESG questions to an already lengthy MiFIDII or DDA questionnaire, compliance with the regulations will affect the client relationship and may even drag sales. On the other hand, it is possible to seize this regulatory challenge to boost client investments while taking advantage of the craze around ESG products.

A strong interest in sustainable finance

Green bonds, green real estate, environmental theme funds, SRI funds… Green investments are popular. According to a recent study, 4 out of 5 investors are looking to invest in assets in line with their values, and 60% of savers are looking to impact their investments. Concerned about environmental issues, more and more investors are interested in ESG products, which now offer similar returns to other investments. Most ESG products are more dynamic and fall into the CU category. Thus, promoting ESG products based on the regulatory pretext can help acquire more clients and boost their assets under management.

MiFID II regulation: an opportunity to sell more ESG products

The MiFID II regulation requires the collection of clients’ ESG preferences before offering them any financial product. To be compliant, it is necessary to assess their relationship with sustainable finance and the possible impact sought. It is essential to capture their risk appetite. How about turning this regulatory constraint into a business opportunity? Learning more about your customer’s expectations can be very useful to offer them products adapted to their profile, thus boosting your sales.

Neuroprofiler has developed ESGprofiler to address the issues faced by financial institutions. Unique on the market, this tool evaluates sustainable investment preferences through an interactive questionnaire based on behavioral finance and gamification principles. The benefits of the ESGprofiler are numerous:

  • To be in full compliance with MiFID II regulations
  • To take care of the customer relationship by proposing a simple, modern, and playful tool
  • Simplify matching procedures for advisors while saving them time
  • Boosting sales

Thanks to its behavioral finance algorithms, ESGprofiler can automatically identify the ESG product that is best suited to the values expressed by the client. Once the client’s preferences have been collected, they are offered a product in line with the impact they are seeking. Thus, ESGprofiler is a powerful tool to find new sources of banking profitability while being an innovative and compliant player. Don’t wait any longer! Request a demo.