BFC, Author at Behavioural Finance Consulting

Risk Tolerance Questionnaires Don’t Tell the Whole Story

Risk tolerance questionnaires are widely used in investment advisory to assess clients’ attitudes toward risk. However, these tools often provide only a partial view. Traditional assessments struggle to capture the full spectrum of an investor’s cognitive, psychological, and behavioural traits—highlighting the need for a deeper and more dynamic approach to profiling. Relying on self-reflection and hypothetical scenarios often fails to reflect how investors truly behave under real-world financial stress. Using a one-off, static assessment for a long-term and evolving trait like risk tolerance is fundamentally inadequate. Reducing such a complex construct to a short questionnaire risks producing inconsistent, incomplete, and potentially misleading results. Understanding real behaviour—not just stated or one-time preferences—is key to creating effective assessments that support investors in building long-term financial strategies.

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The Hidden Value in Financial Product Marketing

Marketing

Financial products pose unique challenges in marketing due to their intangible nature, long-term impact, and complex structure. Unlike everyday consumer goods—where decisions are driven by sensory experience, intuition, immediacy and emotions—financial products demand clear understanding, analytical thinking, trust, and a strong grasp of delayed value. Understanding the key differences between these two categories reveals why traditional marketing approaches often fall short in financial services. Effective financial marketing must blend analytical clarity with emotional resonance to engage clients and support confident, long-term decision-making.

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Customer-Centric Digital Transformation

Banking & Fintech

Digital technology has transformed financial services, offering seamless banking, investing, and financial education. However, poorly designed applications can lead to financial mismanagement, risky behaviours, and customer dissatisfaction. Confusing insights, flawed risk profiling, and excessive notifications may erode trust and drive users away. A customer-centric approach ensures digital platforms enhance decision-making, improve engagement, and support compliance. By integrating behavioural insights, financial apps can foster responsible habits and long-term business success.

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Carbon Footprint Calculators: Why Are They Failing to Drive Sustainable Change?

Climate Analytics

Carbon footprint calculators can promote sustainable behaviours, help consumers save money, and support eco-friendly decisions by translating purchases into measurable CO2e data. However, many users find them abstract or unrelatable, limiting their impact. A key issue is the lack of clarity around CO2e. While scientifically sound, it is difficult for consumers to interpret without relevant benchmarks. Even when understood, linking emissions to purchases remains a challenge, as most tools lack actionable insights. The disconnect between consumer effort and real impact further weakens motivation, as substantial lifestyle changes sometimes yield minimal reductions, discouraging engagement. To be effective, calculators must provide clear benchmarks, relatable comparisons, and incentives to drive meaningful, lasting behaviour change.

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Sustainable Investing: Challenges and Opportunities

Wealth & Asset Management

Sustainable investing is experiencing rapid growth, driven by increasing consumer demand for financial products aligned with environmental and social values. However, significant barriers remain, including inconsistent ESG criteria, greenwashing concerns, and a lack of clear, measurable disclosures. Regional regulatory initiatives like the EU’s SFDR and the UK’s SDR aim to improve transparency, yet the absence of a global ESG framework continues to hinder investor confidence. Compounding the issue, limited financial literacy and widespread scepticism towards sustainability claims prevent many investors from acting on their ethical intentions. Addressing these challenges is crucial to unlocking the full potential of sustainable finance.

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AI in Finance – Ethical Challenges

Financial Services

Artificial Intelligence (AI) is transforming the financial services industry, enabling advancements in personalised investment advice, smart credit solutions, and AI-driven underwriting. Alongside these opportunities, ethical challenges emerge, such as risks of discrimination, deceptive practices, and diminished customer trust. Integrating behavioural science principles can help financial institutions address these challenges by mitigating data biases, ensuring fairness in credit scoring, and aligning AI systems with ethical standards. Global regulatory frameworks, including the EU AI Act and OECD Principles, provide essential guidance for promoting responsible AI practices in finance. Embedding fairness, inclusivity, and transparency into AI applications strengthens customer trust, supports societal welfare, and fosters a sustainable, client-focused future for financial services.

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BFC