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Standardisation in the Retail Banking Sector Designing Functions for an Individualised Asset Allocation Advisory


  • Marcus Kaiser

    () (Senacor Technologies AG, Erika-Mann-Str., 80636 Munich, Germany)

  • Hans Ulrich Buhl

    () (Research Center Finance & Information Management, University of Augsburg, 86135 Augsburg)

  • Stefan Volkert

    () (Capgemini, Olof-Palme-Straße 14, 81829 Munich, Germany)

  • Veronica Winkler

    () (Munich, Germany)


This article is about individualising the process of giving advice to a retail customer in the field of asset allocation. With regard to this process, two main contributions are made by answering two questions. First, which objectives are relevant for a customer (beyond return and risk) and which functions are adequate to evaluate portfolios of investment alternatives with regard to these objectives? Based on empirical literature on customers’ goals, the four objectives liquidity, variability, comprehensiveness, and manageability are identified as relevant. The background of each objective is discussed in order to formulate desirable properties of the objective functions. These properties are then used to axiomatically identify particular functions from fuzzy theory suitable for the given context. The second question is: which selection function is adequate to select a particular portfolio out of a set of portfolios? To answer this question, again an axiomatic approach is chosen: Several properties are discussed and stated which shall reflect the customer’s decision calculus. By requiring these properties, the selection function can be exactly specified. The results can help financial services providers in two ways: On the one hand, they can provide their customers with a higher quality of their advisory services by taking into account more objectives than return and risk. On the other hand, as the derived functions are standardised, they can be used in software applications to support the advisory process which can then be offered at lower costs and thereby even to retail customers.

Suggested Citation

  • Marcus Kaiser & Hans Ulrich Buhl & Stefan Volkert & Veronica Winkler, 2014. "Standardisation in the Retail Banking Sector Designing Functions for an Individualised Asset Allocation Advisory," Credit and Capital Markets, Credit and Capital Markets, vol. 47(1), pages 103-161.
  • Handle: RePEc:kuk:journl:v:47:y:2014:i:1:p:103-161

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    References listed on IDEAS

    1. Beck, Thorsten & Laeven, Luc, 2006. "Resolution of failed banks by deposit insurers : cross-country evidence," Policy Research Working Paper Series 3920, The World Bank.
    2. Schoenmaker, Dirk & Gros, Daniel, 2012. "A European Deposit Insurance and Resolution Fund," CEPS Papers 6918, Centre for European Policy Studies.
    3. Jean Pisani-Ferry & André Sapir & Nicolas Véron & Guntram B. Wolff, 2012. "What kind of European banking union?," Policy Contributions 731, Bruegel.
    4. Schoenmaker, Dirk & Gros, Daniel, 2012. "A European Deposit Insurance and Resolution Fund - An Update," CEPS Papers 7276, Centre for European Policy Studies.
    5. Jean Pisani-Ferry & Guntram B. Wolff, 2012. "The fiscal implications of a banking union," Policy Briefs 748, Bruegel.
    6. André Sapir & Jean Pisani-Ferry & Nicolas Véron & Guntram Wolff, 2012. "What Kind of Banking Union ?," ULB Institutional Repository 2013/174288, ULB -- Universite Libre de Bruxelles.
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    More about this item


    Portfolio Choice; Investment Decisions; Banks; Other Computer Software;

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • C88 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Other Computer Software


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