BPCE - 2018 Registration document

NON-FINANCIAL PERFORMANCE REPORT Sustainable and responsible value creation

The new Markets in Financial Instruments Directive (MiFID II) and PRIIPS (Packaged Retail Investment and Insurance-based Products) Regulation, both of which are subject to careful consideration by Groupe BPCE, are specifically designed to strengthen market transparency, contracts between manufacturers and distributors, and investor protection. They have an impact on the Group in its role as a distributor of financial instruments by enhancing the quality of the customer experience in terms of financial savings and insurance products (Insurance Distribution Directive, or IDD): adjustments to customer and KYC data collection (customer ● profile, characteristics of customer plans in terms of objectives, risks and investment horizons), but also an updated questionnaire on customers’ financial investment knowledge and experience to ensure that suitable advisory services are provided; daptation of offers associated with the financial services and ● products sold; formalization of customer advice (suitability report) and the ● customer’s acceptance of said advice (issuance of customer alerts where necessary); arrangement of relationships between manufacturers and ● distributors in order to meet the new applicable regulatory requirements; inclusion of provisions related to the transparency of fees and ● charges according to required granularity; production of value-added reports for customers and recording of ● conversations for customer relations and advisory purposes; disclosure of transaction reports to regulators and the market, ● best-execution and best-selection requirements; participation in the development of employee training and the ● change management program related to these new provisions. Within the scope of investment services, BPCE has adapted its sales procedures governing financial savings products to incorporate the impacts of the Markets in Financial Instruments Directive and Regulation (MiFID II), the Insurance Distribution Directive (IDD) and the Packaged Retail Investment and Insurance-based Products Regulation (PRIIPs). Some sales processes are transitional, with ongoing IT developments and a remediation plan aimed at securing these processes. Accordingly, specific governance and supervision of products covered by MiFID II has resulted in the establishment of: a committee in charge of validating model securities portfolios, ● meeting semi-annually since the third quarter of 2018 to monitor the performance of risk asset allocations, perform a macroeconomic review, and prepare an allocation analysis and outlook; a product Governance and Supervision Committee, working ● alongside manufacturers, from the first quarter of 2019: exchanging information between manufacturers and distributors, Compliance of investment services and insurance

and overseeing distribution strategy, product changes and investor protection. With the transposition of the Market Abuse Directive and Regulation, the Group began using a market abuse alert analysis and reporting tool covering the Banque Populaire banks, the Caisses d’Epargne and their subsidiaries. A virtual assistant is being rolled out to help staff members analyze alerts reported by the Group’s information systems. The Group’s market abuse memorandum has been updated and compliance staff are given special training to enhance their due diligence in the analysis of market abuse alerts. Lastly, the SRAB KPI measurement methods (regarding the separation of banking activities) recommended by the AMF and ACPR were implemented throughout the Group. Customer satisfaction and quality policy The Satisfaction 2020 program was launched in 2018, aiming to make each Group institution the preferred bank of customers in its local area In 2017, the Group rolled out customer survey solutions to help the brands – from the branch to the head office – effectively boost customer satisfaction on all markets. For example, customers are spontaneously contacted once a year to give their opinion on their overall experience with their bank and also each time they have a meeting with their customer advisor. In 2018, a total of 24 million customers were surveyed, providing a snapshot of customer satisfaction in real time and the opportunity to make improvements to customers’ mobile experience or their experience in their branch or with their advisor. All members of staff can now access a mobile phone app that shows customer satisfaction levels in real time. Another big step forward was taken in the Satisfaction 2020 plan in 2018 with the implementation of two major transformation programs allowing each Group entity to challenge the leading players in their local areas: the first program, targeting individual and professional customers, ● is focused on “keeping things simple, maintaining a close relationship with the customers and offering the benefit of the bank’s expertise”; the second program, targeting corporate customers, is focused on ● “being responsive and proactive”. These programs are intended to enhance performance in terms of everyday banking experience and at key times in the customer’s life. They clearly reflect customer satisfaction drivers and provide each entity with needed to implement them successfully. Tapping into its collective intelligence, rooted in cooperative and regional experience, the Group was able to identify and share best practices with all entities. These programs were very well received and, from their first year of operation increased our NPS on the individual customers market (the first to benefit from them) by 8 points for the Banque Populaire banks and by 9 points for the Caisses d’Epargne.

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Registration document 2018