Geneva - big donors news sparks in Nauman Hussain ideas on how banks should adapt to new forms of return on investment

nauman hussainBelow some ideas shared by ebbf member Nauman Hussain, working in private equity banking and frequently representing ebbf at ethical and impact investing events.

“Following the decision of the Zuckerberg’s to donate 99% of their wealth I have been thinking more about the question of wealth definition and its management in banks. I feel we need to redefine wealth and especially wealth accumulated beyond lifetime-spent possible. This decision gives great insight to banks about the new mindset of millennials towards intergenerational wealth and connection to higher purposes in term of wealth management and investment drivers.

If wealthy people decide to contribute with their wealth back to the masses of people and the planet, the banker-customer relationship takes a turn from a  short term performance orientated conversation towards an uplifted and elevated conversation  for long term legacy and what matter most to the investors. We need not only financial innovation in term of impact investment to address this new requirement but also a change in the banking business model.

When Investors consider the planet their home and humanity their family the term “return on investment” takes a sharp turn and another dimension.  Furthermore distribution of wealth through voluntary sharing becomes an approach to reduce the extremes of wealth and poverty.

“Wealth is most commendable, provided the entire population is wealthy” Abdu’l’Baha

We move from a self-interest and short term view to a collective motive and long term view,  and banks need to integrate this new reality in their investment distribution channel. An evolving paradigm in which investor’s wealth connects to a more purposeful investment and more meaningful projects.

In order to address these needs the banks needs to shift their business model from a profit-driven model to an impact-driven model, because wealth becomes a means to an end, and not the end itself.

We need banks who will foster and be able to manage mission-driven investment. Learning to not only offer financial performance but also a social and environmental return. Most recently the growth of social impact bond or green bond are just a few examples of how some financial institutions are starting to innovate in the right direction.”

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