The management of risks carried by the customer in banking and insurance: behaviors and ethics of the actors.

Summary Our research examines the behaviors of professionals in the retail banking and insurance industries, from executives to advisors, and of customers, that affect the risks carried by the latter. Legislators and supervisors have focused on regulation and standards, including prudential, accounting and technical standards, but have underestimated the role and impact of individual stakeholder behaviors that may be inappropriate and unfair despite the new regulatory framework. The understanding, consideration and control of the behaviors of each actor are necessary to allow a balance between a healthy efficiency of the company and the respect of the clients' interests in a sustainable way.This study took place in immersion during three years within the Autorité de contrôle prudentiel et de résolution (ACPR), which allowed to see, analyze and understand in parallel the problems of the supervisors and the subjects of their controls The analysis of various national and international reports, procedures and control reports, questionnaires for professionals as well as semi-directive interviews with all stakeholders related to our research topic, allowed us to have relevant, reliable and concrete elements to answer our central problematic.Financial activities are based on trust and in this context of persistent crisis, the need for supervision and regulation is growing. Since the banking and insurance sectors are complex, technical and difficult to understand for most people, the behavior of financial actors must be exemplary in their interactions with customers, especially when presenting and explaining financial products.Since the beginning of the crisis at the end of 2007, numerous scandals at the international level have highlighted a large number of human errors linked to unethical behavior in terms of consumer protection. Beyond the flaws concerning financial or operational risks, the commercial practices of certain financial entities have been clearly questioned, leading to the sanctioning of the national supervisor for certain banks and insurance companies.This raises the essential question of the place of ethics within the organization and the effects of the behavior of each stakeholder in the commercial relationship. Ethics implies the notions of accountability, respect and courage, and must be taken into consideration and put into practice in order to achieve a double objective: the human and economic performance of the company.legislators and regulators, through the CRD4, Solvency2, MIF2, IMD2 and Prips directives, focus their requirements mainly on accounting, technical and business practice rules. Even if the numerous financial scandals, especially since 2007, have shown serious behavioral abuses in finance, the means put in place (management tools, methods or devices) to decipher and control behaviors within financial companies are still underdeveloped and underused, especially for risks borne by the client.Our study describes and analyzes the behaviors of professionals and clients, the place of emotions in financial decision making, the influence of norms and their controls on the behaviors of professionals in order to understand what goes against a virtuous internal organizational functioning and responsible business practices. We question the management of client risks within the organization and the means allocated to client protection, and propose a series of recommendations to mitigate these risks in the future.