The Saudi Arabia wealth management industry is rapidly advancing, and supporting that growth requires a sound and stable operation, backed by top-tier talent and technology.
It truly is an exciting time in the wealth management sector in the Kingdom, a "golden age" it can be called.
Consider these Saudi wealth stats (all numbers based in USD):
“We expect Saudi Arabian AUM to cross $300 billion within a couple of years, driven by Vision 2030’s Financial Sector Development Program.
There is strong demand for Islamic products, with around 95 percent of mutual funds being shariah-compliant.”
- Bashar Al-Natoor, Global Head of Islamic Finance at Fitch Ratings
Led by Prince Mohammed bin Salman (MBS), the Kingdom has undergone dramatic economic transformation.
Heavily reliant on oil and gas export revenues, the country is ambitiously developing and diversifying all sectors of the economy, including tourism, real estate, entertainment, and financial services.
As an example, in November 2024 Saudi Arabia's non-oil exports increased by nearly 20% year over year.
While local, homegrown companies will certainly benefit, global firms like Brookfield Asset Management have recognized an opportunity with a presence in Saudi Arabia:
“We want to be at the heart of the Kingdom as it grows.”
- Bruce Flatt, CEO, Brookfield Asset Management
There is a lot of positive change, but Saudi Arabia wealth management firms must change with the times to reap the rewards.
“Saudi is the next big one but it’s going to require a lot of catching up.”
- Amer Malik, Head of Middle East Business at Lombard Odier
With all the advances and opportunities in the Saudi Arabian wealth management industry, realizing those benefits requires calling out old and inefficient ways of doing things.
Many companies find themselves entrenched in older technology and outdated workflows:
manual and time-consuming data and reports, patchwork fixes and short-term workarounds, accumulation of technical debt...
siloed data sets, lack of integration among platforms and custodians, limited available talent, and previously just a few specialty vendors in town..
But make no mistake: Saudi firms are fully aware of the challenges.
Getting out of the hole on their own has proven difficult, but at the same time, they know they can no longer keep kicking the can down the road.
Digital transformation, AI, intelligent automation, streamlined operations... these are the things that firms need, and only with qualified partners can they make the required improvements.
Hiring in-house is a challenging task for many firms. It’s a constant struggle in people management as employees come and go, and then there is the added struggle of relocating talent from abroad. They come to Saudi Arabia and need housing, transport, and work setups arranged.
Saudi wealth firms can bypass all the hassle by partnering with a specialist middle- and back-office outsourcing provider like Empaxis that will recruit, vet, hire, and train talent for them...
As the talent may be required on site for these firms, Empaxis can help arrange that talent to come to Saudi Arabia.
And in the process, we build out their Target Operating Models and a solid foundation for their businesses to grow and scale.
Either way, one must do their due diligence and ask the right questions before select and with an investment management outsourcing provider.
As a sub-set of outsourcing, there are technology experts that specialize in the wealth management space, understanding the unique challenges and complexities firms face.
The most qualified of partners will help firms get out of tech debt, adopt new and cutting-edge technology, and in the process carry out migration, systems integration, implementation, upgrades, and QA testing functions.
This is a huge opportunity for wealth managers.
But too often, firms "throw bodies" at a task, having no other way to tackle an inefficient problem, and these teams will manually input and aggregate data into Excel spreadsheets, CRM, investment portfolio and accounting systems.
Many of these tasks — be they ZATCA invoicing, performance calculations, reconciliation reporting, or billing — can be streamlined with automated bots.
With the the right partner, Saudi firms, delivering saved time, saved money, and ultimately better work outcomes.
The KSA Robo Advisory Market grew at a compound annual growth rate of 607% between 2019 and 2022 in terms of revenue generated, and this market is estimated to grow at a positive CAGR of 52% in between 2022E and 2026F.
Artificial intelligence is making huge gains, and a Finastra survey found that financial institutions in Saudi Arabia are among the global leaders in adopting AI.
While AI is not perfect, the technology can still be applied in a way to aid in human efforts:
The technology is getting smarter, but there are inevitably tasks that automation and AI can’t do entirely.
These tools will perform functions humans no longer have to do with the same degree of labor intensiveness, and what means is human talent should be positioned where that human talent is needed most.
This could be :
And in these cases, Saudi Arabia wealth management firms can determine what human activities are best performed in-house or outsourced.
The Saudi wealth managing industry is in clear growth mode.
Rising levels of wealth and investment opportunities in the Kingdom are paving the way for a truly bright future in the sector, but only the firms that adapt to change can truly benefit.
Leveraging third parties for outsourcing and technology (including AI and automation) are great ways to help boost operating efficiency and reduce costs.
Wealth managers in Saudi Arabia would be served well to make these changes, and Empaxis, with a solid presence in the country, is ready to assist.
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