Middle East AuM grow to $2.3tn in 2023: BCG

The Middle East region's assets under management (AuM) surged 13% year-on-year to $2.3tn in 2023, emphasising the sector's pivotal role in the global asset management landscape, according to Boston Consulting Group (BCG) report.

The report "Artificial intelligence (AI) and the Next Wave of Transformation," surveyed asset managers who collectively oversee over $15tn in assets and reveals a strong consensus among industry leaders that a shift toward AI-driven management is essential. It comprehensively analyses how AI reshapes the asset management industry.

"After a year marked by significant advancements in generative AI, we are starting to see its effects across industries," Lukasz Rey, Managing Director and Partner and Middle East Head of Financial Institutions at BCG, said.

As the asset management sector faces growing structural challenges, he said; embracing AI is no longer optional but necessary for maintaining competitiveness.

"By investing in AI-driven productivity, personalised product offerings, and the expansive potential of private markets, asset managers can navigate the slowing growth in traditional areas and spearhead innovative, scalable solutions," he said.

Finding that the Middle Eastern countries have strived towards positioning themselves as leaders in AI preparedness, the report said however, more can be done to recognise the potential benefits of early adoption and innovation.

By integrating AI into their economic frameworks, these countries can work towards significant workflow transformations, enhancing the synergy between AI-driven solutions and human creativity, it added.

Asset management firms in the Middle East that effectively integrate these technologies can enhance efficiency, personalise client experiences, and capitalise on new opportunities, according to BCG.

Such firms can maintain competitiveness and contribute to the region's evolving status as an AI innovation and implementation centre, it said.

Highlighting that a well-executed AI strategy can drive growth; BCG said investing in AI is crucial as the technology evolves rapidly, and asset managers must act now to avoid falling behind.

The report outlines three major themes that should top the leadership agenda to thrive in the years ahead: productivity, personalisation, and private markets.

These areas, accelerated by AI and its subset, Generative Artificial Intelligence (GenAI), are critical for asset managers to enhance operations, develop tailored products, improve customer experiences, and adapt to new pressures on allocation and risk management strategies.