Middle East: Assets under management surge 13%, rising to $2.3tn in 2023

The Middle East’s asset management sector is experiencing a growth spurt, with assets under management (AuM) surging by 13 per cent to $2.3tn in 2023, according to Boston Consulting Group’s (BCG) latest report. Globally, in 2023, AuM rose by 12 per cent to nearly $120tn.

The report, titled AI and the Next Wave of Transformation, surveyed asset managers overseeing $15tn in assets. While it positioned the Middle East region as a key player in the global industry, it stated that staying ahead required embracing the next wave of transformation: artificial intelligence (AI).

“After a year marked by significant advancements in generative AI, we are starting to see its effects across industries,” says 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 key to unlocking the full potential of AI. By integrating AI into their economic frameworks, countries can bridge the gap between cutting-edge technology and human ingenuity, fostering significant workflow transformations.

The way ahead for the Middle East: Productivity, personalisation and private markets

Asset management firms in the region that harness the power of AI can enhance efficiency, personalise client experiences, and capitalise on new opportunities, shared Rey.

This will not only ensure their own competitiveness but also solidify the Middle East’s position as a hub for AI innovation and implementation.

BCG highlights the following areas where AI can propel asset managers forward:

Productivity: Imagine streamlining complex processes and automating tedious tasks. AI can do just that, freeing up valuable human resources for more strategic pursuits. From data analysis and trade execution to reporting and compliance, AI can optimise operations across the board.

This not only reduces costs but fosters faster decision-making and improved efficiency.

Personalisation: Forget one-size-fits-all solutions. AI can analyse vast datasets to understand and anticipate client needs. This allows for the creation of tailored investment products and personalised interactions. Imagine AI-powered tools managing personalised portfolios at scale, previously a privilege reserved for the ultra-wealthy.

Additionally, AI can enhance the customer experience through targeted marketing and real-time, personalized advice.

Private markets: AI as a deal-making dynamo: Private markets, often a treasure trove for savvy investors, can be a data-heavy landscape. AI can sift through vast amounts of unstructured data, identifying promising investment opportunities and meticulously assessing potential deals.

This translates to faster deal sourcing, more precise due diligence, and potentially higher returns. AI can even help manage and optimise the performance of private market investments, providing insights beyond traditional methods.

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