Middle Eastern financial institutions are urgently accelerating their use of technology to deliver clients’ improved access to private markets, according to recent research.
In its latest report, ‘Digitising Private Markets’, fintech firm Delio shows that financial institutions’ adoption of digital tools across their operations has increased substantially as a result of Covid-19. However, nearly two-thirds of Middle Eastern firms still do not use technology to deliver private markets services – despite recognising the improvements it could make to back-office organisation and client services.
Delio believes that firms that are slow to implement a digitised private markets strategy risk losing clients to innovative, tech-led competitors. Rahul Vaish, Delio’s Client Director for the Middle East, said: “In private markets, firms place a huge amount of value on close client relationships and this is particularly true in the Middle East. However, any firm that is serious about providing a holistic wealth management service needs to deliver a compelling private markets solution. With unlisted investments gaining significant traction among MENA-based investors, firms need to ensure that their clients can enjoy readily available, digital access to these exciting opportunities. In an increasingly competitive landscape, now is not the time to lose existing or potential clients to competitors who make private markets more accessible through technology.”
Nearly two-thirds of MENA financial professionals surveyed as part of the research recognised that technology would significantly enhance their clients’ investment experience. As the Middle East faces one of the world’s most significant intergenerational wealth transfers, Delio argues that financial institutions need to recognise that investors’ expectations have changed. Many investors now see digital access to their portfolio as an essential part of the client experience.
Delio, a fintech company which works with the likes of Barclays, UBS and Halal Angels Network, has called for an omnichannel approach in which financial firms combine technology and personal advice to create a truly personalised client experience. They argue that better use of technology can help firms to scale their private markets propositions, providing access to a market that has consistently outperformed publicly listed investments over the last decade. McKinsey’s most recent Private Markets Review highlighted that the value of private assets under management had grown by $4tn or 170% over the previous ten years, compared to 100% growth in global public assets.
Rahul Vaish added: “When it comes to offering private markets investments in the Middle East, financial advisors have client relationships at the forefront of their propositions. And rightly so. Yet, technology can strengthen how these relationships are built and develop. Suppose I had an investment opportunity that I wanted to share with a number of clients. Why wouldn’t I want to share this digitally beforehand and target my conversations with clients whom I know are interested in the opportunity? Wealthy clients are typically time-poor, so they want to be able to access data at their convenience rather than having to schedule a call with their relationship manager. Firms who fail to understand that technology is an enabler rather than a threat to their business are potentially making a damaging mistake that could cost them dearly.”