A fresh wave of financial regulation is reshaping how banks, asset managers and real estate advisors operate, driven by the introduction of CRR III in January 2025 and the ongoing compliance demands of MiFID II.
While many firms view these developments as hurdles, they could actually represent a significant opportunity—if supported by the right digital infrastructure.
fincite, which offers software to revolutionise investment advice from onboarding to reporting, recently delved into real estate valuation can wealth management.
New regulations are raising the bar on transparency, documentation, and ESG integration, particularly in property valuation and wealth management. CRR III introduces the concept of “Property Value,” which prioritises conservative, transparent, and sustainable assessments, while MiFID II demands ongoing suitability checks and full transparency during investment advice. Traditional tools, like spreadsheets, can no longer cope with these layered requirements, fincite explained.
The shift from “market value” to “property value” introduces two recognised methods under CRR III. The loan-to-value approach, aligned with the German BelWertV regulation, suits banks requiring stringent documentation. Alternatively, a current market value method can be used, provided it includes a review process that adjusts values to long-term sustainable levels.
Real estate credit assessments have also become more nuanced. Properties are categorised into residential, commercial, or ADC (acquisition, development, construction), with different risk weights applied. A misclassification can trigger up to a 150% risk weight, directly impacting capital reserves.
Wealth managers are equally affected. MiFID II mandates detailed advisory processes including justifications for product choices and complete cost transparency, often extending client meetings to over an hour. The need for regulatory efficiency is clear—manual processes simply won’t scale.
Enter fincite • cios, a comprehensive digital solution streamlining the entire wealth management lifecycle. The platform handles onboarding, suitability assessments, ex-ante cost reporting, and auto-documentation to ensure MiFID II compliance. According to the company, the result is a time saving of 12 weeks per advisor annually.
The solution is further enhanced by PriceHubble, whose AI-powered real estate analysis offers live market data, long-term value assessments, and seamless portfolio integration. This allows for real-time valuation of property within a client’s overall wealth—enabling smarter asset allocation and a more holistic advisory approach.
To explore this further, the full story can be found here.
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