Clear waves of change are expected in the GCC wealth management sector. Invested and investable assets are shifting towards younger generations of customers acclimatised to control, flexibility, and transparency. Customer loyalty and stickiness will decline. Even older generations are becoming more exposed to technology solutions that commoditise product offerings and put control back into the hands of the consumer. These waves of change are driven by wealthtech firms which are defined as entities that either directly provide digital or robo-advisory and investment platforms or enable traditional wealth managers to provide such platforms. Wealthtech platforms use sophisticated investment models and automated solutions that try to maximise returns based on defined risk appetite of the investor. These platforms charge significantly lower fees (often 50 per cent-75 per cent lower) than traditional wealth management firms. Additionally, these platforms don’t require any minimum investment, leading to democratisation of wealth management. Wealthtechs from the region such as Sarwa and StashAway have already gained substantial user base. Further, traditional financial institutions are also embracing the wealthtech bandwagon. In April 2021, Commercial Bank of Dubai (CBD) launched ‘CBD Investr’, a mobile application that uses smart algorithms to actively manage investment portfolios. CBD partnered with a Belgium-based wealthtech provider InvestSuite to launch the platform.
Wealthtechs as well as traditional players in the region that are looking to reap benefits from wealthtechs, can define their winning strategy based on following three parameters across all customer segments. This includes technical analysis tools, access to research and education for users, tradable asset classes including commission free offerings, ease of account opening, and seamless human based customer support or through Natural language Processing (NLP) chatbots. This includes stability of platform, low latency, ecosystem offerings with open Application Programming Interface (APIs), AI powered diagnostics, and developer consoles for customised solutions. This includes transparency and full disclosure of charges and fee structure, account opening and annual maintenance fee, etc.