AI in finance to inject Dh103b into UAE’s GDP by 2035 – News

Future wealth management will rely heavily on robo-advisors

AI in finance is expected to inject AED103 billion into the UAE economy by 2035, as the most future-fit country in the Arab world aims to increase the contribution of this game-changing technology to 40% of the country’s GDP 14% – equivalent to about AED360 billion by the end of the decade.

According to financial experts, future wealth management will rely heavily on robo-advisors. DHF Capital chief executive and asset manager Bas Kooijman said the technology, which uses mathematical algorithms to provide sound financial advice, is gaining popularity in the UAE, where the market is expected to exceed one million users by 2027.

Assets managed by the UAE robo-advisor market are expected to reach approximately AED 58.46 billion by 2023, with a compound annual growth rate (CAGR 2023-2027) of 12.06%, and the total is expected to reach approximately AED 1.9 billion by 2027.

Currently, the UAE is leading the Arab world in the adoption of AI technologies. Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, garnered a huge vote of confidence when he declared AI to be one of the “most important economic and social game-changers of our time”.

The UAE aims to increase its gross domestic product by about 35 percent ($96 billion) using AI technology. The country is already on track to double its digital economy’s contribution to GDP from 9.7 percent to 19.4 percent within 10 years.According to a recent report by the Boston Consulting Group, $20 billion is expected to be spent on technology

The UAE government first launched its AI strategy in 2017, signaling its government’s reliance on various future services, sectors and infrastructure projects utilizing AI. Through this initiative, the UAE aims to become a world leader in artificial intelligence by 2031 and expand the use of artificial intelligence in areas such as education, energy, transportation, space and technology.

Kooijman said the imminent rise in investors seeking to leverage the power of algorithms to grow their investments can be attributed to several factors, including lower fees and higher ROI than human advisors or the traditional banking system, which is mostly robotic ( ROI) – Advisors only charge about 0.25% per year.

“Artificial intelligence is now reshaping the way consumers and companies acquire and manage their finances. With predefined rules, computers can be programmed to explore markets for the benefit of clients, and when those rules match reality, investments can be made Managers are alerted to help them further minimize risk and maximize profits. This automation inherently provides safety while enabling portfolios to maintain high levels of liquidity,” said Kooijman.

For traders, the algorithm has the potential to make thousands of trades per second if set up properly. A 2019 study showed that approximately 92% of the forex market is executed by algorithms rather than humans.

The Middle East and Africa region will witness the fastest growth in AI spending in the world, driven by the region’s most dynamic UAE and Saudi Arabia, with a CAGR of 29.7% during 2022-2026, by 2026 will reach a $6.4 billion economy.