Developing an automated digital suitability assessment against the backdrop of MiFID II

Ruth Kümmerle and Ralf Conen

Journal of Digital Banking, 2018, vol. 3, issue 2, 142-154

Abstract: This paper reviews the Markets and Financial Instruments Directive II (MiFID II) suitability assessment from an academic perspective, including behavioural finance aspects. It highlights critical focus points within the regulation and provides guidance for an automated, digital suitability assessment. It suggests the use of visualisation elements and experience sampling to assess a client’s risk tolerance. It outlines how to employ decision support systems to measure the ability to bear losses. Finally, the paper discusses how to construct an algorithmic evaluation logic of the assessed parameters yielding a client risk profile. Overall, suggestions on how to implement an objectively evaluated digital suitability assessment are provided. The approach might thus be of interest to regulators, the traditional industry and FinTech companies alike.

Keywords: financial services; robo-advisory; MiFID II; suitability assessment; interactive visualisation (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
https://hstalks.com/article/4353/download/ (application/pdf)
https://hstalks.com/article/4353/ (text/html)
Requires a paid subscription for full access.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aza:jdb000:y:2018:v:3:i:2:p:142-154

Access Statistics for this article

More articles in Journal of Digital Banking from Henry Stewart Publications
Bibliographic data for series maintained by Henry Stewart Talks ().