The Middle East is a “beacon of potential” in the global wealth management landscape, according to Natalie Burke, head of marketing at Kidbrooke.
Kidbrooke provides a modular software platform enabling banks, insurers and fintechs to build next-generation wealth offerings.
In a blog post, Burke discussed the future of wealth management in the Middle East, examining the financial planning landscape.
She said: “Diplomatic efforts to boost economic cooperation are leading to greater geopolitical stability, following a decade of regional conflict. At the same time, the abundance of natural resources coupled with the commitment to the green energy shift promises an excellent foundation for continued prosperity.
“Even though the political and climate risks remain high, the absence of infrastructural debt and the rapid growth of demand for wealth management and pension planning services make the region attractive for a more inclusive, digital-first approach to financial services.”
Burke discussed how traditionally wealth management services were targeted to the most affluent but technology has enabled firms to “build lean, digitally empowered customer journeys without compromising customer experience.”
“Apart from cost-efficiency driven by automation, our clients find that self-service digital channels increase revenue by educating potential customers about their services and financial products. This is true even if they, in the end, prefer contacting the financial institution through the phone or in person.
“Through cost reduction and revenue enhancement, intelligent automation empowers wealth managers with unparalleled capacity to broaden their reach and cater to an expanded client base,” she added.
Burke highlighted that a distinct feature of the Middle East is its financial sector that is “unburdened by legacy infrastructure, a siloed approach to financial planning or a conservative mindset towards innovation.”
She believed these characteristics allowed local and regional players to build a more democratised wealth management sector.
Burke discussed how the increase in demand for sustainable investments in addition to strict ESG regulations has pushed firms to prioritise “plant friendly” financial products more than ever.
“In the context of rapidly exacerbating weather conditions in some areas of the world, especially the Middle East, it is essential to equip clients or financial advisors with tools that would empower them to obtain a clear vision of their long-term aspirations, factoring in potential climate change impacts,” she added.
Gamification
Burked discussed the use of game-like elements in the financial planning or investment journey and how the digital-first approach in the Middle East would mean gamification would likely be explored by regulators and the industry.
She said: “The controversies of using game-like elements in financial contexts have drawn the attention of regulators worldwide. The American SEC has been paying close attention to brokers using predictive analytics to encourage trading.
“At the same time, the UK has recently launched a campaign alerting new investors of the risks associated with investment offerings. Feedback from industry insiders at investment brokerage firms suggests that inappropriate use of gamification could risk customer attrition, especially if they’re led to make ill-advised decisions or are buoyed by unrealistic expectations.”
