Breadth, governance and end-to-end execution are becoming more decisive than standalone product innovation as structured products enter a more demanding era, according to the French bank.

BNP Paribas is positioning itself for the next phase of structured products growth by focusing on scale, platform breadth and operational discipline as European markets become more sophisticated and regulation tightens.

In today’s market, performance is no longer measured only by pricing or innovation - Azad Mahavar

For Azad Mahavar (pictured), global head of EQD structuring and Emea head of structured products sales at BNP Paribas, success in structured products is increasingly defined not by isolated innovation but by the ability to consistently deliver across a broad value chain.

Speaking to SRP, Mahavar described how the bank is adapting to an environment where clients want more targeted outcomes, regulators are raising governance standards and product architecture is expanding beyond traditional equity-linked solutions.

“We do not see structured products as a narrow manufacturing activity,” Mahavar said.

Instead, BNP Paribas views the business as a full-service ecosystem spanning idea generation, structuring, proprietary indices, QIS, hedging, lifecycle servicing, distributor support, marketing and documentation.

That industrialised approach is becoming more important as clients seek not only innovation but also reliability, transparency and scalability.

“In today’s market, performance is no longer measured only by pricing or innovation,” Mahavar said. “Clients also expect reliability, transparency, and the capacity to deliver across different market environments.”

Demand broadens

Mahavar sees the strongest opportunities emerging where investor needs are evolving fastest.

Demand remains strong for outcome-oriented solutions that combine yield enhancement, capital protection and selective market exposure. Investors are increasingly seeking structured formats that provide more precise risk-return profiles rather than simple directional participation.

The BNP Paribas team at the SRP Europe 2026 Awards in London on 17 March

One of the clearest shifts has been rising appetite for custom indices and QIS strategies.

“We also see strong interest in custom indices, which allow investors to access more diversified or more targeted strategies within a structured format,” Mahavar said.

These underlyings are broadening access to diversified and targeted exposures beyond traditional long-only benchmarks.

This trend is particularly visible among private banks, discretionary managers and wealth platforms using structured products as repeat portfolio construction tools rather than purely tactical opportunities.

“The most dynamic segments are those where structured products are used as a repeat portfolio tool rather than as purely opportunistic trades,” he said.

Capital protection revival

The interest rate environment has materially changed the strategic landscape.

After years of ultra-low rates constrained capital-protected issuance, higher yields have reopened opportunities across principal-protected and rates-linked structures.

“At the same time, higher interest rates have reopened the opportunity set for capital-protected and rates-linked structures,” Mahavar said.

This has significantly broadened the toolkit for issuers with strong engineering and distribution capabilities.

“Overall, the opportunity is less about one specific payoff and more about the ability to offer a wider toolkit to address more selective and more sophisticated client objectives,” he said.

Simplicity remains critical

Despite increasing sophistication in underlyings and structuring, Mahavar emphasised that clarity for end-investors remains essential.

“Even when the underlying engineering is sophisticated, the investment objective must remain clear,” he said.

BNP Paribas has focused on balancing advanced engineering with simplicity of outcome, reflecting growing client demand for transparency, comparability and ease of portfolio integration.

“Clients are increasingly interested in more advanced underlyings, including proprietary indices and QIS strategies, but they also expect greater transparency and easier comparability,” Mahavar said.

Fragmented distribution models

Although Europe remains a major structured products market, Mahavar noted that distribution remains highly fragmented.

“There is no single dominant model,” he said.

Different markets continue to rely on adviser-led, bank network or exchange-based models, creating complexity for issuers.

For BNP Paribas, this fragmentation increases the value of combining pan-European manufacturing and governance strength with local sales and servicing capabilities.

“Success therefore depends on the ability to combine a pan-European platform with strong local presence and servicing capabilities,” Mahavar said.

He added that consistency of execution, governance and lifecycle support are becoming just as important as innovation itself.

Drivers of change

Mahavar sees digital transformation as one of the most significant structural shifts in the industry.

“Digitalisation is becoming central across the entire value chain,” he said.

Technology is expanding structured products’ reach by enabling larger issuance volumes, smaller ticket sizes and more tailored offerings for discretionary managers.

At the same time, regulation continues to raise governance, disclosure and operational standards.

“Regulation has undoubtedly raised the bar, but it has also contributed to the professionalization of and trust in the industry,” Mahavar said.

For large institutions such as BNP Paribas, robust governance frameworks are increasingly both compliance necessities and competitive advantages.

“In our view, regulation should not be seen only as a constraint. It also strengthens trust in the market and encourages higher execution standards,” he said.

Rising complexity

Mahavar characterised 2025 as a record year for global structured products issuance, supported by strong growth across Europe, the US and Apac.

Autocallables continued to gain portfolio share across both equity and rates-linked formats.

“Q1 2026 was a continuity of the excellent 2025 vintage with record breaking issuances in structured products volumes across distribution channels,” Mahavar said.

BNP Paribas also observed rising demand for precious metals-linked structures amid geopolitical uncertainty and higher cross-asset volatility.

While volatility has created opportunities, Mahavar cautioned that the longer-term effects remain difficult to assess.

Differentiators

Across BNP Paribas’ strategy, Mahavar repeatedly returned to one central theme: structured products are becoming more operationally demanding.

As product sophistication rises, distribution diversifies and governance standards tighten, competitive leadership is increasingly tied to infrastructure, technology, compliance and servicing.

“We believe the market is moving toward a model where consistency, scalability and clarity are as important as product creativity,” he said.

Where structured products were once often differentiated primarily through pricing innovation or exotic payoff structures, leadership is now more closely linked to execution infrastructure, technological capability, compliance frameworks and long-term client support.

For large integrated issuers, this shift increasingly favours scale and disciplined platform investment.

Platform strength

That broader strategy was reflected in BNP Paribas’ performance at the SRP Europe Awards 2026, where the bank secured multiple honours across equities, autocallables, Benelux, CEE and capital protection.

For Mahavar, the recognition reflected cumulative consistency rather than isolated transactions.

“We see these awards first and foremost as recognition of consistency over time rather than any single transaction or product theme,” he said.

In an increasingly complex structured products environment, BNP Paribas is seeking to position itself not simply as a product innovator but as a scaled, diversified and governance-led platform designed for long-term leadership.

BNP Paribas’ structured products franchise was recognised at the SRP Europe Awards 2026 in London in mid-March with multiple accolades including Best House, Equities, Best House, Autocalls, Best House, Benelux, Best House, CEE and Best Distributor, Capital Protection. Click the link to view the full list of winners.

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