In its fourth mystery shopping campaign, BaFin found that the online advertising of the investment service providers in Germany under review was predominantly transparent and fair. At the same time, the campaign identified room for improvement. This mystery shopping campaign was part of an EU-wide exercise coordinated by the European Securities and Markets Authority (ESMA). These activities focused on the online advertising practices of investment service providers. The objective was to find out whether these institutions adhered to the legal requirements (see info box) when advertising via their online channels.

What exactly did the study explore?

For this mystery shopping campaign, BaFin examined the websites, apps and social media channels of ten institutions. These included savings banks, private banks, major banks and direct banks.

The mystery shoppers assumed the role of both existing and new customers. Their observations focused on product advertising and marketing materials for regulated investment funds. The campaign was conducted from June to October 2023.

Traditional “mystery shops” on site, such as those carried out in BaFin’s other mystery shopping campaigns (see info box), were not part of this campaign.

No false promises

On the whole, the findings of the campaign were positive: at all the institutions tested and on all the online channels, important product information was consistently presented in a clear and comprehensible manner. There were no false promises or disguised statements. The small print did not hide any information on costs or risks. There were no misleading terms such as “protected” or “guaranteed” to be found.

Another positive aspect was the fact that throughout the campaign, from June to October 2023, none of the ten institutions sent newsletter emails with individualised advertising to the mystery shoppers acting as existing customers. After visiting the institutions’ websites, none of the mystery shoppers received individualised advertising – via Google or Facebook, for example.

Nine of the ten institutions work with their own social media channel. None of these institutions used their channel to post any product advertisements during the campaign period. All ten institutions provided information on the sustainability of their products and services via their website and/or online banking service.

BaFin identifies need for improvement

BaFin’s mystery shopping campaign revealed room for improvement in three areas.

Only in the small print: Three of the ten institutions tested used only small print to inform potential customers that the past performance of an investment was not a guarantee of future results. As this is important information, it must be clearly visible. Just because the price of a financial instrument has risen in the past, it does not necessarily mean that it will continue to rise in the future – this should always be explicitly pointed out to investors.

Unclear sustainability criteria: Of the ten institutions tested, four failed to provide explicit information on how the sustainability of a product advertised as “green” or “sustainable” could be specifically substantiated. Almost all the institutions merely referred to the fact that the UN Sustainable Development Goals had generally been taken into account.

Some banking apps with less information: Consumers primarily using a smartphone or tablet app for their financial affairs should bear in mind that only two of the ten institutions tested provided all the information on products and services directly in the app. In most cases, the mystery shoppers were referred to the institution’s website when they sought further information.

At ten institutions, the data sample was relatively small. In addition, as with every other mystery shopping campaign, the findings provide only a snapshot of the current situation. These results should not be understood to apply to the German financial sector as a whole.

What BaFin is doing with the findings

In the course of its mystery shopping campaign, BaFin examined whether the institutions tested fulfilled the relevant legal requirements when sending out advertising or other marketing messages via their online channels. BaFin is currently conducting supervisory interviews with those institutions whose practices exhibited irregularities; if necessary, BaFin will be initiating further supervisory measures.