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Finance. The MiFID directive, a performance lever for banks

Publié le November 21, 2018, Mis à jour le November 21, 2018

French-Belgian* researches on individual investors’ behaviour have provided a detailed analysis on the mandatory MiFID questionnaires (Markets in Financial Instruments Directive). These works highlight the importance of clients’ answers in order for investment providers to give tailored advice and to sale suitable products to them. The results of these studies have been recently presented by Marie-Hélène Broihanne, researcher and Faculty member of EM Strasbourg Business School, to the Observatoire de l’Epargne Européenne (OEE) which funded them.

Marie-Hélène Broihanne

Marie-Hélène Broihanne

What if the future of heritage activities and European banks private management lied, at least partly, in simple questionnaires - made mandatory by the MiFID in 2007 and mostly in the customers’ answers? This is one of the points raised by studies coordinated by Marie-Hélène Broihanne at EM Strasbourg Business School. Observations made in collaboration with colleagues from the Catholic University of Louvain revealed that banks rarely use the answers provided by the clients on their financial literacy and attitudes towards risk and losses, while these were particularly relevant to understand their investment and saving behaviours.

“These contents are a mine of information for banks” Marie-Hélène Broihanne confirmed. “They allow to create a better customer profiling, to give more specific advice and to better protect the savers.” They are particularly informative and confirm that the more detailed knowledge the investors have on markets and products, the more they are able to invest into complex products.

“They also show a better ability to resist an equity market downturn for instance, and usually take better decisions” she added. Therefore, they can be the type of clients for whom banks could build savings solutions and high-end investments with, in the long term and as part of a quality relationship.

Customer service quality


The problem is: banks, which own the “set up” of these questionnaires, still consider them more as a regulatory constraint to which they must conform, than as a performance lever. Therefore, the questions are often poorly formulated and advisors are untrained for this type of customer relation.

“And yet, in the end, this kind of process will be essential to attract the next generations, who surely won’t be as loyal to their financial institutions as the current clients”
Marie-Hélène Broihanne said. There is therefore little doubt on the fact that banks will take a close look at the results of these very concrete studies which highlight the lever effect they could benefit from, building on the answers to the MiFID questionnaires.


*These studies were conducted by Marie-Hélène Broihanne, EM Strasbourg Business School, along with Hava Orkut (PhD student) and Prs Patrick Roger and Maxime Merli. Catherine D’Hondt, Rudy De Winne and Anthony Bellofatto from the Catholic University of Louvain, Belgium, have also contributed to this project.
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