Today's Edition
MAYS IBRAHIM (ABU DHABI)
A growing affluent population, tech-driven financial services, and forward-looking policies are propelling the UAE towards becoming a leading regional wealth hub, according to global professional services firm Alvarez & Marsal (A&M).
"Over the past five years, the UAE has witnessed a significant influx of skilled professionals, driven by its progressive stance on long-term residency, including initiatives like the Golden Visa, in addition to strategic investments in technological innovation," Pierre Legrand, Financial Services Digital Leader for EMEA at A&M, told Aletihad.
These individuals are driving the rise of a digitally savvy, upper-mass affluent demographic, seeking more seamless, digital engagement with financial services providers.
"This represents an incredible opportunity for traditional banks and neo players to capture a profitable segment that is looking to grow their wealth through properties, diversified investments, and a range of lifestyle services tailored to their needs," added Legrand.
"Banks that are ready to move decisively will be able to tap into a new mass affluent segment that is willing to pay for value-added services that support their financial aspirations."
The UAE's regulatory environment is also playing a pivotal role as a growth catalyst by attracting investments and talent.
According to Legrand, initiatives such as free zones, competitive taxation, and substantial government investment in digital assets and AI are creating fertile ground for fintech and digital wealth platforms.
"This combination of regulatory flexibility and forward-looking investment allows fintech firms to thrive and lays a strong foundation for the growth of digital wealth management," he said.
"Firms investing in these segments will be well placed to capitalise on access to these new technologies to better align with their clients' growing needs in the region."
A key development transforming the sector is the rise of AI-powered tools, according to Legend.
He explained how relationship managers, once focused mainly on onboarding and financial planning, are now equipped with intelligent systems that detect customer "moments of truth" such as changes in spending patterns or life events like a job change.
"New technologies will allow advisors to more robustly engage with customers in 'real life'. This dynamic approach will enable course corrections and tailored opportunities to enhance clients' wealth in a way that works for them and when they need it most - whether that's through digital tools or face-to-face," he said.
With agentic AI driving greater access, the mass affluent segment represents today's most dynamic opportunity for growth, Legend said.
"This segment is digitally savvy, highly responsive, and profitable if engaged on their terms, which means delivering experiences with the same convenience and personalisation as found in consumer-level digital interactions [e.g. tailored content - Netflix, Spotify, YouTube]," he explained.
He believes that firms that can integrate personal data with lifestyle and financial goals to create a 'family office in your pocket' will win this market.
Whether traditional financial institutions remain competitive or not will rely on their ability to transition their technological architecture to support new, customer-centric services within a digital service model, Legend added.
"Currently, banks service mass affluent customers through undifferentiated mass retail platforms that offer little personalisation," he explained.
"In the future, a key competitive differentiator will be a bank's ability to embed more advanced personal financial management (PFM) capabilities, and open banking for a more holistic view of assets, and agentic guidance based on assessing clients' transaction data."
Even as technology transforms the mechanics of wealth management, Legend maintains that the human element will remain indispensable.
"Services like financial planning and investment modelling can be effectively handled by agentic solutions," he said.
"However, taking a final decision on a mortgage for an investment property, or moving to a self-managed pension, are high-stakes decisions that would benefit immensely from human help. Mass affluent users, in particular, will want to use digital tools like in-app video to engage with their relationship manager at the right moment in this journey."
Looking ahead, Legrand said that the defining competitive advantage that will differentiate financial services players in the market will be a "relentless focus" on the customer journey.
Success will depend on delivering a seamless 80/20 hybrid experience - digital first, with strategic human touchpoints, he added.
