Are robo advisers taking over MENA wealth management?

One in three wealth managers in the MENA expects dramatic expansion over the next three years, Oxford Risk research shows.

Wealth managers in the Middle East and North Africa (MENA) are expecting strong growth in the number of robo advisers and digital-only wealth managers, according to new research for behavioural finance experts by Oxford Risk. 

The study with independent financial advisers and wealth managers in MENA, who collectively manage assets of around $290bn, found one in three (34%) expect the number of digital-only solutions to increase dramatically by 2025. Another 45% expect a slight increase in the number of robo-advice and digital-only solutions while 21% expect no change. 

The forecasts of expansion build on the impact of the pandemic on the adoption of technology across the region, with lockdowns and restrictions forcing companies to find new ways of working. 

More than two out of three (68%) wealth managers said the pandemic has accelerated the technology revolution in the MENA wealth management sector. However, one in eight (12%) disagree that the pandemic has had an effect. 

‘The rise of digital only solutions is expected as the technology revolution speeds up in the MENA wealth management sector. There are major benefits for wealth managers and clients from increasing their use of technology and algorithms. 

‘That will help deliver more consistent support to clients and avoid issues over assessments of risk tolerance and asset allocation. Once a specific framework for the measurement of risk tolerance, risk capacity and other relevant factors is established, it can be run at scale and speed,’ Greg B Davies, head of behavioural finance at Oxford Risk, said. 

The research took into account wealth managers in the UAE, Saudi Arabia, Bahrain, Qatar, Oman, Egypt and Kuwait.

Source: Oxford Risk