News DeskDubai, UAE – Boston Consulting Group’s (BCG) Global Wealth Report 2024: The GenAI Era Unfolds, the United Arab Emirates (UAE) has experienced a remarkable growth in net wealth, reaching USD 2.9 trillion in 2023. This represents a 10% increase in financial wealth from 2022, outpacing the regional growth rate for the Middle East and Africa, which was 8%. The global financial wealth also rose by 7%, following a 4% decline the year prior.
The report forecasts that over the next five years, an estimated USD 92 trillion in financial wealth will be generated globally, marking a significant shift in the international financial landscape.
UAE Emerges as a Leading Global Booking Center
The UAE has become a standout performer in the cross-border wealth management arena. In 2023, global cross-border wealth grew by 5.1%, reaching USD 13 trillion, with the UAE standing out as the world’s seventh-largest booking center. The country is expected to surpass the Channel Islands and Isle of Man, potentially becoming the sixth-largest by 2028. This growth rate places the UAE ahead of traditional European cross-border booking centers such as Switzerland, the UK, and Luxembourg, positioning it as a key competitor alongside Singapore and the United States.
Lukasz Rey, Managing Director & Partner at BCG and Head of Financial Institutions in the Middle East, stated, “This potential ascent highlights the UAE’s growing importance in the international wealth management landscape and its appeal to high-net-worth individuals seeking diverse financial opportunities.”
Financial Wealth Growth and Future Projections
The UAE’s financial wealth has grown at an impressive annual rate of 7.6% from 2018 to 2023, reaching USD 1 trillion in 2023. Projections indicate that this growth will continue, with financial wealth expected to increase at an annual rate of 7.3%, reaching USD 1.5 trillion by 2028. Real assets have also seen dynamic growth, projected to reach USD 3.1 trillion by 2028.
The UAE’s net wealth, including both financial assets and real estate, is expected to grow from USD 2.9 trillion in 2023 to USD 4.4 trillion by 2028. A significant portion of this wealth is concentrated among Ultra High Net Worth (UHNW) individuals, those with assets exceeding USD 100 million. UHNW individuals currently hold 29% of the UAE’s total financial wealth, more than double the global average of 14%, further cementing the UAE’s position as a hub for high-net-worth individuals.
Wealth Management Opportunities in the UAE
With 81% of the UAE’s financial wealth being investable and projections indicating this figure will rise to 83% by 2028, wealth managers are presented with substantial opportunities. Mohammad Khan, Managing Director & Partner at BCG, noted, “Wealth managers are facing a massive opportunity, particularly in providing tailored solutions and targeting underserved segments. The shift in wealth to younger generations, along with a growing reliance on digital platforms, will shape future wealth management strategies.”
The Impact of GenAI on Wealth Management
GenAI technology is set to transform the wealth management industry. With the potential to enhance client experiences and improve operational efficiency, GenAI applications can streamline processes such as client acquisition, onboarding, and transaction monitoring. Despite its potential, many wealth managers are still in the early stages of adopting GenAI, with 85% of surveyed financial institutions believing it will have a significant impact, although 82% lack a clear strategy for long-term implementation.
The evolving landscape of wealth management in the UAE, coupled with technological advancements, signals a new era for the region’s financial services sector.
