In this live episode of the Connector Podcast recorded at the Digital Finance Summit 2022, host Koen Vanderhoydonk interviews Pierre Nemeth, CEO and co‑founder of Sopiat, a Belgian fintech focused on wealth‑management diagnostics for retail investors. The conversation centers on the growing demand for ESG‑aligned investments among non‑professional investors and the regulatory backdrop shaping that demand. Pierre explains how the EU’s MiFID II ESG amendment adds investors’ sustainability preferences to traditional risk‑based suitability assessments, creating a more granular, personalized profiling approach for banks and wealth‑tech providers. He then outlines the Sustainable Finance Disclosure Regulation (SFDR) taxonomy (Articles 6‑9), clarifies the concepts of greenwashing and the newer “green‑bleaching” issue, and highlights data heterogeneity as a major obstacle to reliable ESG labeling. The dialogue moves to the need for improved ESG literacy among retail clients, the role of principal adverse impact reporting, and the importance of transparent, technology‑driven tools—such as Sopiat’s diagnostic platform—to bridge the gap between investor preferences and product sustainability characteristics. Pierre shares his vision for the next 6‑12 months: scaling education, simplifying ESG assessment, and enabling retail investors to channel capital toward net‑zero technologies. The episode concludes with a brief plug for Sopiat’s website and a thank‑you to FinTech Belgium.
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Welcome to the Connector Podcast, an ongoing conversation connecting fintechs, banks, and regulators worldwide. Join CEO and founder Koen Vanderhoydonk as you learn more about the latest available trends and solutions in the markets. This episode is proudly sponsored by Fintech Belgium, the digital finance association by and for fintechs. Live from the Digital Finance Summit 2022.
Warm welcome to everyone. And yet we are here with another interview at the DFS, or the best fintech festival in Belgium. Pierre, welcome to the stage-ish.
Hello.
Can you introduce yourself a little bit?
Who are you?
What do you do?
So my name is Pierre Nemeth. I am the CEO and the co-founder of Sopiat, which is a fintech company located in Liège.
And I heard you're a rising star in fintech and wealth tech.
Yeah, true, true. We are really focusing on wealth management activities. We provide personalized diagnostic solutions to the wealth management sector, from family office until retail banking, private banking, and so on. And the added value goes to retail investors, so non-professional investors. We try to have an added value for them.
And this talk will be more about sustainability, ESG.
Yeah.
And maybe not for everyone, what would be the obvious link between ESG and investments?
For me, the link between ESG and investment is clearly the fact that now the retail investor, the non-professional investor, really focuses to have ESG and sustainable investments. It's part of their mind, I would say. So it's a market requirement. And on top of that, you've got MiFID requirements, which is a regulatory requirement that came into force last August. So both together, market requirements and regulatory requirements, link the ESG with the investment.
And can you elaborate maybe a little bit more about— well, you call MiFID, but maybe not everyone in the audience knows what MiFID stands for. So what does it do? And what has changed then as of August this year?
So MiFID is the Market in Financial Instruments Directive. So it's a regulatory framework from the European Union. And the goal is really to protect, I would say, the investors. That's one part. And also to control the financial markets.
And what has then changed? Because This is something that goes around for quite a while. For the insiders, you get MiFID I, MiFID II, and now there's ESG MiFID. What does that mean?
Yeah. So just to come back on MiFID I and II, the goal was really to focus on the risk suitability, the risk assessment, meaning that you will take into consideration the risk profile of an investor and you will see all products on the market are suitable compared to the risk profile of the investor. Mifid II ESG, you come with— so we keep Mifid II, but we add the ESG preferences of the investor on top of his or her risk profile. So a more precise profile at the end. I would say the same profile, but ESG preferences on top of that. So more combinations of ESG segments, I would say, at the end. So more personalization.
More personalization. Does that mean a big impact for the banks?
I would say that in terms of current regulatory requirements, it doesn't change. But adding ESG MiFID, you come with an add-on on the suitability side because you need now to assess how a product is suitable with regard to ESG.
If you compare the investor preferences, ESG investor preferences, with the ESG product information, And yeah, I do see that that's a big impact for banks because of MiFID, the world, in my opinion, started to be about profiling. And a lot of the systems, the portfolio management systems and so on, they were driving on the fact that they could work with profiles. But now what you say is that suddenly a client has his own decision. and can make multiple combinations. And that's the personalization part. So I think it's a big chunk for the banks, a big change for the industry also.
Yeah, I'm completely aligned. I think that we spoke more in the past about profiling, meaning an administrative burden, more an administrative burden than really personalization. With ESG preferences that need to be taken into consideration, you can have hundreds of different combination of, let's say, profile. It's not profile, but ESG preferences. And of course, based on that, you are able to really speak here about personalization and not just profile categorization, risk profile categorization. You can really— you need the banks and financial institutions need really to propose a product and services that are now aligned with specific ESG preferences of your investor.
And also falls within the profile because it's not that one came that the other disappears, right? So it's a combination of both.
Exactly.
And what I also find interesting is that a lot of banks to which I've been talking to were under the impression this was something that was put in place by financial regulators, but in fact it's not. That's a part of the European Green Deal, the trend towards net zero. And this is a consequence. So as, for example, SFDR, I'm sure you're familiar with that as well. Could you maybe explain a little bit about SFDR? What does it do? What does the categorization mean? And what's the impact of that?
Yeah. So regarding SFDR, we could say that the level of sustainable investment we check, we analyze actually the level of sustainable investment. So the categorization, Article 8, 6 until Article 9 provide you an overview about this level of sustainable investment. Article 6 concerns firms that are not eligible to sustainable investment, or you do not need to take that into consideration into your investment process, I would say. And if you look at Article 9, it's the opposite. You need to define a clear sustainable objective, and you need to use a benchmark or index to track, to follow up these objectives. So it's really the opposite in this case.
Yeah. And what you see as a trend, there has been some occasions in the market where some companies had police reinforcements because of sustainability issues, and that predominantly has to do sometimes with the labeling part. So what you see is there is an avoidance for greenwashing. But I was reading one of the papers of ESMA just not so long ago, Well, actually, the latest guidelines that came out last week, and it talks about green bleaching. Have you heard about green bleaching?
I heard about that. I think that you refer to asset managers that invest in funds that have a clear level of sustainable investment, but do not want to disclaim this sustainability impact because of the regulate. I would say the data issue behind the regulatory requirements. So for me, yeah, I would say that it's really weird because on one side, you want to disclaim that your fund will promote sustainable investment. But on the other hand, there are asset managers that do not want to disclaim that. Yeah, it's a bit difficult to understand, I would say.
But is the difficulty not also related to data in general? Like not having the availability of ESG data already in the market?
Of course, there are still open gray zones, I would say, and issues related to the homogeneity of the data, the transparency of the data. And you could say that different data providers will propose maybe a different kind of methodology and at the end, data, transformed data, for instance. But I think that the current regulation and the forthcoming regulation are doing a great job to avoid this kind of greenwashing and heterogeneity of data at the end. So working on that, I think that we are on the right direction. I would just have to add something. I think that this classification, Article 6 to Article 9, is good in terms of— if you look at the asset manager side, if you look at what the market, and I would say the retail investor, would take into consideration, they are more concerned about the level of sustainability, I would say the sustainable alignment or contribution that a fund could have without defining that or classifying that into Article 6, 9, or 8. They want to say, for instance, this fund is composed of at least 20% or 30% of alignment, SFDR alignment. And compared to their level of preferences, minimum level of preferences, you could do a great job by really assessing the suitability between their minimum preferences and the contribution of the fund.
And the choice of the client.
And the choice of the client, of course. If they want to invest in specific themes, taking into consideration specific principal adverse impacts, and at end, we come back to this personalization level.
Would it be a wrong question to ask you to explain the principle adverse impact?
Honestly, I do not have my laptop in front of me. So this question would be a bit difficult. But it's really assessing the impact that an investment could have on the sustainability side, the negative impact that an investment could have on the sustainability side. So for instance, if a company has more gas emissions than the— much more gas emissions than the benchmark, for instance, then an impact could be detected and retrieved to the reporting that SFDR is required.
Yeah. And then at the same time, it could also be an objective to lower this impact and therefore have a positive impact on a principal adverse impact.
Exactly.
Yeah. Well, by asking this question, and I know it's a tricky one because it's not easy, I mean, the whole sustainability discussion, especially you with Sopiat, you focused on end customers. But don't you think it's a difficult story for clients or end customers to understand?
Of course. Of course, it's a difficult story. And I'm convinced that if we could speak here about improvements in the future in terms of directive or initiative coming from Europe or the national authorities, it could be to improve the ESG literacy, the non-financial literacy. That's the first thing, to get access to information sessions or training, ESG training, because they need to understand and they need to understand in the same way the definition of sustainable investment. If you look, if you ask 2 different persons, maybe you will have 2 different answers. Mm-hmm. For the moment, it's still an open point, I would say, or a gray zone regarding the definition. So we really need to dig into the definition and really the understanding for the retail investors.
And at the end, the importance is for all of us because we should not forget we're moving towards net zero, which is to protect our planet.
Exactly. And SFDR, I think that's why the directive SFDR MiFID II taxonomy really contributes to this objective. But again, there are still improvements that could be done in the future regarding the gray zone and the clarification that needs to be brought to financial market participants regarding these directives.
Fully agree. So what do you expect that will happen in the future if we think about ESG and investments?
I think that if we look at, again, this net-zero gas emission, We need to really focus on technologies and companies that accelerate these objectives. For me, that's the main goal. And to do that, we clearly need to give the more transparent view to the retail investor so that they can invest more easily and leverage on investment to speed up this process and participate at the end, to be involved in this objective from Paris.
Well, maybe taking you back to Sopiat. You're a young company, you're a starting company, you're a Belgian company. What does your future look like if you look at 6 months ahead, 1 year ahead? What would success look like?
But I think that we need to continue to really focus on education, ESG education regarding what we are doing and really assessing correctly Again, the product or the portfolio in one hand and the investor expectation in the other hand, and expect that in an easy way. And I said easy way because for the moment it's more simple. It's simpler to, I would say, to assess with simple driver than going into the detail of the different teams, ESG teams, and so on. It will come in the future, but it needs to be step by step.
I think that's a nice journey that lies in front of you. I obviously wish you all the best of luck with that.
Thank you very much.
And Pierre, thank you so much for this contribution into this podcast.
You're welcome. That was a pleasure.
Maybe one last question. If participants to this podcast would like to hear more about Sopiat, where do they go?
www.sopiat.com.
That was an easy one.
That's an easy one and that's the one. So if you want to ask a demo, they can ask a demo on the website as well and understand what we are doing, the service we are proposing to the market.
Perfect. So thank you very much again.
Thank you.
Also, thank you to FinTech Belgium for making this podcast happen. Thank you to the audience and stay tuned because as you noticed, we're not having just one series. It's a lot of podcasts that are coming. We're trying to bring a lot of insights to the market. So thank you very much for joining and hope to hear you soon.
Thank you very much.
Thanks for listening to another episode of the Connector Podcast. To connect and keep up to date with all the latest, head over to www.jointheconnector.com or hit subscribe via your podcast streaming platform.
