Kim Fournais, CEO and Founder of Saxo Bank has shed light on a practice within the financial industry that often goes unnoticed: the retention of benefits from central bank rate hikes by some banks and brokers, depriving clients of potential gains. Fournais calls for a shift in this practice, urging the industry to prioritize clients and embrace a more transparent and client-centric approach.
In his op-ed titled “It’s high time that the financial industry pass on rate hike benefits to clients,” Fournais delves into the complex world of banking and investing, emphasizing the need for transparency and a balanced relationship between financial institutions and their clients. He argues that while financial institutions must make profits, it is crucial to strike a balance that benefits both parties involved.
“…the balance needs to be right; we need to nurture win-win relationships with our clients,” writes Fournais, addressing the necessity of aligning the interests of financial institutions with those of their clients.
Fournais exposes a practice where many banks and brokers retain the benefits of central bank rate hikes, resulting in a lack of transparency and missed opportunities for clients. “Yes, the financial industry must make money – so do we at Saxo – but the balance needs to be right,” he emphasizes, urging for a more equitable distribution of benefits.
The article highlights the discrepancy among banks in their treatment of interest rates, with some swiftly passing on rate hike benefits to clients while others prioritize their own profits. This practice has sparked concerns about clients missing out on potential gains due to the industry’s focus on maximizing its own profits.
“Central banks have raised rates frequently over the past year to curb inflation… the reality can be quite different for those who fall victim to what appears to be the new norm,” notes Fournais, raising concerns about the impact of this practice on consumers.
Saxo Bank’s response to this issue is its “Immediate Rate Hike Pass-On Policy,” designed to ensure that clients directly benefit from rate hikes in a transparent and timely manner. Fournais affirms, “Our Immediate Rate Hike Pass-On policy is not a mere gesture. It’s a commitment to redefine the bank-customer relationship – higher interest rates may benefit our business but should also benefit our clients. We believe in win-win.”
Fournais’s call to action reverberates throughout the article, urging the entire financial industry to reconsider its priorities and embrace values of trust, transparency, and client-centricity. “Consider this more than an op-ed – it’s a call to action. Not just for the industry, but for the investors and savers that should demand more,” writes Fournais, rallying for a collective effort toward change.
As the financial landscape continues to evolve, Fournais’s article stands as a pivotal reminder that the industry’s focus should extend beyond profits and encompass the well-being of clients. The financial industry faces a critical juncture to reshape its practices and prioritize the interests of those it serves.
Hernaldo Turrillo is a writer and author specialised in innovation, AI, DLT, SMEs, trading, investing and new trends in technology and business. He has been working for ztudium group since 2017. He is the editor of openbusinesscouncil.org, tradersdna.com, hedgethink.com, and writes regularly for intelligenthq.com, socialmediacouncil.eu. Hernaldo was born in Spain and finally settled in London, United Kingdom, after a few years of personal growth. Hernaldo finished his Journalism bachelor degree in the University of Seville, Spain, and began working as reporter in the newspaper, Europa Sur, writing about Politics and Society. He also worked as community manager and marketing advisor in Los Barrios, Spain. Innovation, technology, politics and economy are his main interests, with special focus on new trends and ethical projects. He enjoys finding himself getting lost in words, explaining what he understands from the world and helping others. Besides a journalist he is also a thinker and proactive in digital transformation strategies. Knowledge and ideas have no limits.