Kuwait City:— Kuwait’s financial wealth will experience a sturdy Compound Annual Growth Rate (CAGR) of 4.3% in new wealth, rising from USD 0.3 trillion to a high of USD 0.4 trillion from 2021 - 2026, according to a new report by Boston Consulting Group (BCG) titled, Global Wealth 2022: Standing Still Is Not an Option.
“We see the Middle East and Africa financial wealth growing year after year, including Kuwait despite a tremulous global market,” said Mustafa Bosca, Managing Director and Partner, BCG. “Kuwait grew 3% every year since 2016 to USD 0.3 trillion in 2021 and is expected to continuously grow to 2026. Also, approximately 28% of Kuwait’s wealth derived from the Ultra High Net Worth (HNW) segment in 2021, which are individuals who are worth more than USD 100 million.”
Other findings from the report:
Net-zero Is an Immediate Imperative
Although people tend to think of net-zero as a 2050 goal, the report notes that wealth managers must act immediately to embed sustainable investing across the entire client life cycle.
Crypto: An Untapped Market for Wealth Managers
The opportunity for wealth managers is clear: nearly 80% of clients surveyed said that they would consider increasing their crypto holdings if wealth managers offered advisory and education services. Two-thirds of clients who sourced their crypto investment with third parties said that they did so because they didn’t think their wealth managers offered such services. To determine whether crypto is right for their businesses, wealth managers must consider if, when, and how they want to participate.
Personalization as a Driver of Top-Line Growth
On average, wealth managers that excel at customizing offers and interactions see higher rates of client satisfaction and lower rates of churn than others do. Personalization is a complex undertaking that requires introducing new data and analytics, connecting processes across the firm’s front, middle, and back offices, and changing ways of working. In the report, BCG identifies three actions that wealth managers vying to deliver individualized service at scale can take to improve personalization: prioritize capabilities that recur across journeys; design for value and scale; and back good ideas with the right enablers.
The Digital Wealth Management Premium Is Real
The valuation multiples of digital wealth management firms are six or seven times as high as those of traditional wealth managers. Digital wealth management institutions are delivering faster customer growth, cheaper cost structures, and superior rates of innovation. To protect their future profitability, traditional wealth managers must evolve with the times.
“The wealth management agenda is getting more crowded—and the items on it more urgent. Net-zero, crypto, personalization, and digitization are not merely arenas that leaders can simply consider. They are imperatives whose outcomes will determine which institutions grow client share over the next five years. The most important question facing wealth managers right now is not which initiatives to prioritize—but how best to execute on all of them,” concluded Bosca.
About Boston Consulting Group
Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.
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