Across the wealth management industry today, in the Gulf region and across other markets around the world, too many firms are held back by outdated legacy technology infrastructure and fragmented systems.

This matters not only for an industry that is in the midst of a profound shift, as client expectations, regulations and technology reconfigure the landscape, but for all of us, as we look to make our hard-earned savings work harder.

Prioritising the needs of customers

Investors want trusted advice, high quality digital services and increasingly personalized wealth solutions that provide real-time knowledge about their portfolios as they invest with purpose. The real ambition for wealth firms is to free up their advisors to focus on what they do best – providing advice.

And the key to this is the smart use of innovative technologies that are transforming the industry.

Wealth management is too often characterized by paper-based processes and technology that in some cases pre-dates the internet. This hampers the ability of advisors to provide counsel, respond to customer needs and, importantly, reduce cost to serve through greater efficiency and increased automation.

In fact, lower fees and simpler structures are the main reasons investors seek to change providers ¹ .

Our firm, FNZ, is a global wealth management platform with a privileged window into how the industry is responding to these trends. We partner with over 650 wealth management firms and administer over US$1.5 trillion of assets globally. Our mission is to open up wealth, helping more people invest in their future on their own terms, by delivering technology transformation programmes across the globe that break down barriers and modernize a fragmented industry.

A shifting landscape of younger investors

One of the key drivers behind ongoing digital transformation is the shifting landscape of investors. More than $15 trillion in wealth will transfer from older generations to younger ones by 2030, according to estimates from Wealth-X.

Tech giants like Uber and Amazon have revolutionized the way we interact with companies and services. An ever-growing younger and more diverse generation of investors expects nothing less than seamless delivery, high levels of transparency, and better control and personalization of their investments.

In the same way we demand next day delivery, younger investors demand instant data-driven insights and advice on smartphones.

Our research tells us Gen Y & Z expect their wealth provider’s digital experiences to be on par with those delivered by leading born-digital companies. This includes the use of self-servicing tools and chatbots that leverage AI-enabled ‘Robo advisors’ during the investment journey. This generation also differs in its investment preferences, showing a greater likelihood to increase allocation to cryptocurrencies and digital assets.

UAE set to capitalise on these trends

The good news is that investment firms are open to shifting their approach and many are doing so already, pairing trusted advice with best-in-class technologies. Our research shows, for example, that 69% of executives believe AI will significantly change the way their firms work.

Here at Dubai’s Fintech Summit, there is a significant focus on how technology is transforming the financial services landscape in the Gulf, from retail banking to investment advice.

With burgeoning economies, and a younger and growingly affluent demographic, there is unique potential for innovation to support the mass institutional transfer of wealth across the coming decades.

Across the UAE and Saudi Arabia, close to 92% of executives are convinced in the power of AI to transform the way they operate. In fact, 60% say they are at an advanced stage of scaling technology and process transformation across multiple functions, showing significant performance gains.

Firms globally need to adapt to these expectations or face being left behind. Gen Y & Z, less bound by brand loyalty, are much more likely than the Boomer and Silent Generations to look elsewhere if they are dissatisfied with current service offerings.

Immense opportunities for firms and investors

But opening up wealth is about so much more than just reacting to evolving trends. There are real benefits for firms and investors alike. In UAE and Saudi Arabia, firms expect to see significant improvements in performance and efficiency following investments in tech. Operationally, they are seeing better customer experience, risk management and productivity, which improves both returns and reputation.

This investment in technology and automation in the back office enables a shift to modern, digital tech platforms in the front office. Driving down costs and increasing choice paves the way for an ever-growing personalization of services for investors who need more complex solutions to meet more challenging goals.

Put simply, it allows firms to focus on what really matters for customers and the end investor – how their money is invested and what trusted advice they receive.

As expectations from a diverse range of investors grow, the need to open up wealth and embrace the tech revolution in our industry does not just represent a response to shifting trends – it is a necessity for firms to thrive in a rapidly evolving competitive landscape.

¹ All referenced data unless stated otherwise: Building a Future-Ready Investment Firm, FNZ, ThoughtLab, Deloitte, with support from Amazon Web Services and Genesys, including views of 250 wealth management firms and 2,000 investors, segmented by region. You can access the report here.