Avaloq rolls out ESG investment solution for banks and wealth managers

By Megha Bhattacharya

Avaloq today announced the launch of an Environmental, Social and Governance (ESG) investment solution for banks and wealth managers. The solution is expected to allow users to build customised ESG compliant portfolios for clients. It has been designed to help financial institutions capitalize on the significant market shift towards ESG investing, and ensure compliance for companies operating in the European Union, with the upcoming amendment of MiFID II.

Martin Greweldinger, Avaloq Group Chief Product Officer, said, “For many people, ESG has become the most significant trend in business and in investing – one that, given the fundamental and serious nature of the issues being tackled such as climate change, will likely define the future of the asset and wealth management sectors. While the ESG market has grown rapidly, it is very likely to accelerate much further as investors, particularly younger market segments, continue to reallocate assets with specific ESG criteria and goals in mind.”

Avaloq stated that its ESG investment solution comprises of adaptable, third-party data feeds and intuitive functionality for allowing wealth managers and front office staff for building client-centric portfolios.

Recently, Swiss-based Investment Navigator teamed up with Avaloq in a bid to simplify investment advisory compliance for wealth managers. The FinTech will be integrating Investment Navigator’s RegTech offering into its Wealth Platform. The solution includes suitability checks for the compliant distribution of investment products, covering all asset classes on ISIN level, as well as regulatory guidance on cross-border business activities.

“One challenge for providers is that there are no rules defined by regulators or standard setters for how the ESG preferences should be collected – it is considered an area of competition between investment companies. As such, we believe that banks and wealth managers that can offer the most comprehensive ESG service will be the ones that see stronger market growth. This is why Avaloq’s ESG investment solution will be available in the new Avaloq Wealth platform starting next year and will ensure comprehensive features along the investment process like ESG profiling, ESG construction and ESG analytics.”