The asset management sector in the Middle East is experiencing significant growth, with assets under management (AuM) increasing by 13% to reach $2.3 trillion in 2023, according to the latest report from Boston Consulting Group (BCG). On a global scale, AuM rose by 12% to nearly $120 trillion in the same period.
The report, titled "AI and the Next Wave of Transformation," surveyed asset managers overseeing $15 trillion in assets. It highlights the Middle East as a crucial player in the global asset management industry but emphasizes that staying competitive requires embracing the transformative power of artificial intelligence (AI).
“After a year marked by significant advancements in generative AI, we are starting to see its effects across industries,”
said Lukasz Rey, Managing Director and Partner, and Middle East Head of Financial Institutions at BCG.
“As the asset management sector faces growing structural challenges, embracing artificial intelligence is no longer optional but necessary for maintaining competitiveness.”
Early adoption and innovation are essential to unlocking AI's full potential. By integrating AI into economic frameworks, countries can bridge the gap between cutting-edge technology and human ingenuity, driving significant workflow transformations.
The Future of Asset Management in the Middle East: Productivity, Personalization, and Private Markets
Asset management firms in the Middle East that leverage AI can enhance efficiency, personalize client experiences, and seize new opportunities, according to Rey. This approach will not only ensure their competitiveness but also establish the Middle East as a hub for AI innovation and implementation.
BCG identifies three key areas where AI can propel asset managers forward:
Productivity: AI can streamline complex processes and automate tedious tasks, freeing up valuable human resources for more strategic pursuits. From data analysis and trade execution to reporting and compliance, AI can optimize operations across the board. This not only reduces costs but also fosters faster decision-making and improved efficiency.
Personalization: AI can analyze vast datasets to understand and anticipate client needs, enabling the creation of tailored investment products and personalized interactions. AI-powered tools can manage personalized portfolios at scale, a service previously reserved for the ultra-wealthy. Additionally, AI can enhance the customer experience through targeted marketing and real-time, personalized advice.
Private Markets: In the data-heavy landscape of private markets, AI can sift through vast amounts of unstructured data to identify promising investment opportunities and meticulously assess potential deals. This leads to faster deal sourcing, more precise due diligence, and potentially higher returns. AI can also help manage and optimize the performance of private market investments, providing insights beyond traditional methods.
As the asset management sector in the Middle East continues to grow, the integration of AI technologies will be crucial in maintaining competitiveness and driving innovation. By embracing AI, asset managers can streamline operations, personalize client interactions, and uncover new investment opportunities, solidifying the region's position as a leader in the global asset management industry.
News Source: Gulf Business
