Beijing judges have urged financial institutions to align their financial products with investors' actual needs and risk tolerance to prevent disputes and promote healthy industry growth.

A report from the Beijing Chaoyang District People's Court released on Tuesday emphasized the obligation of financial institutions to tailor products to individual clients. It required a thorough understanding of both the investor and the product, rather than indiscriminately pushing products.

The court reviewed 151 cases over the past five years involving financial institutions' obligations. More than 97 percent of plaintiffs were individual investors, with defendants including commercial banks, securities firms, and fund sales institutions. Products involved ranged from private equity funds to cross-border derivatives.

"Many investors complained that financial institutions failed to fulfill their duty to fully inform or clearly explain the products, and that there was inappropriate risk matching," said Luo Man, chief judge of the court's third civil division. She noted that some plaintiffs also accused institutions of false advertising and inadequate risk assessments, revealing that the court ruled in favor of investors in 79 of the 151 cases.

With digital technology increasingly integrated into the financial industry, product recommendations and sales have largely moved online. "While online services are more convenient for investors, they lack face-to-face communication, which can lead to misunderstandings about product risks," Luo said. "For financial institutions, such online services streamline processes but also heighten the need for thorough product explanations and risk assessments."

She suggested that financial institutions fully fulfill their obligations, "or they will face penalties from regulators and potential civil or criminal liability," she added.

Du Xiao, deputy chief judge, advised institutions to establish scientific risk assessment standards and avoid inaccurate risk classifications. She recommended using simpler language and tools to aid investor comprehension, such as compulsory reading countdowns?and risk confirmation quizzes.

Xu Dong, vice-president of the court, stressed the importance of integrity in financial transactions, emphasizing the need to protect investors' interests while maintaining market order. He called on financial institutions to ensure investment safety and promote high-quality industry growth.