As the UAE becomes the preferred residence of some of the world’s wealthiest people, the private banking and wealth management sectors find themselves in a position of strength, drawing on tradition as well as a future-forward digital-first strategy
With more than 67,000 millionaires and 13 billionaires, Dubai has emerged among the top 25 global destinations for the wealthy, clocking an 18% increase in H1-2022 in the number of the city’s wealthy denizens. When charting millionaire migration trends, the UAE emerges as the world’s number one in attracting high-net-worth individuals (HNWI) in 2022, with 4,000 additional millionaires set to move to the country this year.The draw of the UAE lies in many factors, including its high-income ecosystem, its reputation for resilience through macro-economic events, its diversified economy, and its appeal as a hub that connects the world. Of course, the many splendored beaches have their own attraction.
However, one less talked about aspect of Dubai’s strengths is its wealth management industry, which has long catered to a diverse, multicultural set of HNWI and ultra-HNWI, by addressing their personal, local, and global investment requirements.
A diverse set of HNWI: Dubai, which has historically functioned as a trading port, has a long and illustrious history of banking, going back to 1946. The clientele has included expatriates, merchants, and local businesspersons. In response to customer needs, which are as local as they are global, the UAE’s private banking sector has extended their geographical footprint to include locations such as Singapore, UK, and Saudi Arabia, among others.
For a Dubai private bank today, the HNWI client may be a matriarch, preoccupied with inter-generational wealth transfer, which is a global trend. Or it could be an entrepreneur-turned-venture-capitalist, contributing to the 93% growth in start-up and venture capital investments in 2021. It may even be a father and a Gen Z offspring working together to optimize the income from their family business.
The infrastructure advantage: With the happiness of inhabitants at the centre of policymaking, Dubai and the UAE are known for smart, proactive strategies. Its demographic dividend lies in attracting people from 200 countries to its shores. Ease of residency, along with a robust business climate, coupled with wealth management infrastructure that effectively addresses HNWI concerns, means that Dubai becomes a stable home for the longer term. The UAE has concluded 137 double taxation avoidance agreements and 106 Bilateral Investment Treaties with its trade partners. In August 2022, the first Global Family Business and Private Wealth Centre in the region and the world was established by the Dubai International Financial Centre (DIFC).
An updated offering: The UAE holds the advantage of a future-forward leadership that takes a technology-friendly, early adopter approach that spans all sectors. Globally, research shows that intelligent systems with data and analytics at their core can deliver a personalised customer experience. These are essential for wealth managers in 2022.
Banks like Emirates NBD have made billion-dirham investments into technology transformation across verticals, which lays an effective foundation for wealthtech, essential for the global HNWI. With an embedded digitalisation journey, an investment strategy today is conversant not only with classical core assets like real estate, but also robotics, artificial intelligence, ESG, and cybersecurity as new themes.
The best wealth managers know that even in a globalised world, a personalised and localised flavour of wealth management is essential for wealth preservation and growth. In fact, it requires a diversified approach that closely aligns with global macro-economic factors, effectively bringing the world to your doorstep, wherever you are.
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Private Banking
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