UAE’s net wealth reached $2.9tr in 2023: BCG wealth report

The United Arab Emirates' (UAE) net wealth reached $2.9 trillion in 2023, according to Boston Consulting Group's (BCG) annual global wealth report.

The ‘Global Wealth Report 2024: The GenAI Era Unfolds’ revealed that the UAE's financial wealth grew by 10% from 2022 to 2023, versus the Middle East and Africa's 8%.

Global financial wealth rose at 7%, following a decline of 4% in 2022. Over the next five years, an estimated $92 trillion of financial wealth will be created globally.

A standout performer: Cross-border wealth grew globally by 5.1% in 2023, reaching $13 trillion, a 1 percentage point increase over the year before. In this evolving landscape, the UAE has emerged as a standout performer.

Currently the world's seventh-largest booking center, it is poised to overtake the Channel Islands and the Isle of Man to become the sixth-largest by 2028. The UAE's growth rate outpaces traditional European cross-border booking centers like Switzerland, the UK, and Luxembourg, competing with Singapore and the US.

This shift reflects an increasing demand for geographic diversification and the surge in wealth generation across Middle Eastern and Asian markets. While Switzerland is expected to maintain its position as a leading booking center, capturing 15% to 20% of global new cross-border wealth through 2028, it will face fierce competition for the top spot, with the UAE as a formidable contender.

"The UAE may become the sixth-largest global booking center by 2028. This potential ascent highlights the UAE's growing importance in the international wealth management landscape and its appeal to high-net-worth individuals seeking diverse financial opportunities," said Lukasz Rey, Managing Director & Partner, and Head of Financial Institutions in the Middle East.

“This projection reflects broader trends in geographic diversification and wealth generation across markets. As the cross-border wealth landscape evolves globally, we anticipate shifts in the relative positions of various booking centers."

UAE financial wealth Surges: The outlook for the UAE's financial wealth looks promising. Financial wealth increased by 7.6% annually from 2018 to 2023, reaching $1 trillion in 2023. Projections suggest that this growth will continue at an annual rate of 7.3%, reaching $1.5 trillion by 2028. Real assets have achieved dynamic growth by 9.1% annually from 2018 to 2023 and are expected to grow at 8.5% annually to reach $3.1 trillion by 2028. Liabilities have remained roughly still at $180 billion and are projected to stay in the same range, reaching $240 billion by 2028.

The UAE's net wealth, which includes financial wealth, real assets, and liabilities, is expected to increase from $2.9 trillion in 2023 to $ 4.4 trillion by 2028.

The financial wealth landscape of the UAE is characterized by a significant concentration of Ultra High Net Worth (UHNW) individuals. Individuals with assets exceeding $100 million make up 29% of the UAE's total financial wealth, more than double the global average of 14% for the same wealth segment.

This substantial share held by UHNW individuals in the UAE exceeds the global figure and the broader Middle East & Africa region's 23%. It underscores the UAE's increasing prominence as a hub for high-net-worth individuals.

Future outlook

"In the UAE market, where 81% of financial wealth is investable—a number expected to climb to 83% by 2028—wealth managers are staring at a massive opportunity," Mohammad Khan, Managing Director & Partner at BCG, explained. "Given that 41% of onshore assets are in cash, there's a clear need for wealth players to provide tailored solutions and target underserved segments.

This includes providing customers with access to integrated offerings such as advisory, lending products, and alternative investments catering to customers’ holistic needs. We will also see a greater focus by leading players in the GCC to position themselves with younger customers through greater use of digital platforms and a differentiated customer engagement model as wealth is transitioned to the next generation.”

GenAI is set to significantly change the wealth management industry, offering ways to improve client experience and increase efficiency across the value chain. The technology shows potential in client acquisition, onboarding, servicing, and internal support.

GenAI applications can assist in creating personalized pitch documents, speeding up know-your-customer (KYC) processes, providing instant client support through chatbots, and improving transaction monitoring by reducing false positives.

Despite the potential benefits, many wealth managers are still in the early stages of GenAI adoption. While 85% of surveyed financial institutions believe GenAI will be highly impactful, 82% lack an overarching, long-term GenAI strategy and short-term implementation roadmaps.