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Global Wealth Recovered In 2023; Switzerland Remains Top Cross-Border Centre

Global Wealth Recovered In 2023; Switzerland Remains Top Cross-Border Centre

For all the pressures it has been under, Switzerland remains the world”s largest offshore centre, with Hong Kong in second place, while the UAE is expanding rapidly.

Global financial wealth rose by almost 7 per cent in 2023 to $275
trillion, almost reversing the 4 per cent drop in 2022 when
markets took a tumble and an estimated $92 trillion in financial
wealth is likely to be created in the next five years, according
to Boston
Consulting Group
in a recent report. 

Total net wealth, covering all forms of wealth, rose 4.3 per cent
last year, to $477 trillion.

Financial wealth in North America and Western Europe rose last
year. Supported by strong equity markets, the region was among
the fastest-growing regions, accounting for more than 50 per cent
of all new financial wealth in 2023. However, the recovery was
not as strong in Western Europe, where financial wealth rose by
4.4 per cent.

Although financial wealth in Asia-Pacific grew by only
5.1 per cent in 2023, predominantly due to a slowdown in wealth
creation in China, BCG expects a “significant
increase,” with the region likely to contribute nearly 30
per cent of new financial wealth by 2028. In addition to China,
India is well positioned to be a driver of greater
wealth; it has already generated roughly $590 billion in new
financial wealth in 2023, its largest increase in

Among other details of the BCG Global Wealth Report 2024, despite
all the changes affecting the Alpine state in recent years, such
as the loss of bank secrecy and last year’s Credit Suisse
drama, Switzerland is still the world’s largest hub for
cross-border wealth, growing in line with its historical average
of 4.8 per cent and gaining the most wealth in absolute dollar
terms. Switzerland’s wealth, which stood at $2.6 trillion in
2023, is expected to rise at a compound average growth rate
(CAGR) of 3.6 per cent up to 2028, BCG said.

Hong Kong is in second place as a cross-border centre, at $2.4
trillion last year, with an expected CAGR of 6 per cent;
Singapore is third at $1.7 trillion (8.5 per cent); the US is
fourth at $1.3 trillion (6.9 per cent); the UK mainland is fifth
at $900 billion (3.8 per cent); the Channel Islands and Isle of
Man are sixth at $700 billion (2.7 per cent); the United Arab
Emirates is seventh at $600 billion (7.7 per cent); Luxembourg is
eighth at $500 billion (4.6 per cent); the Cayman Islands are
ninth at $400 billion (4.4 per cent); and the Bahamas are
10th at $400 billion (4.7 per cent).

UAE dynamics, Hong Kong hits speed bump

The report said that the “most remarkable growth dynamics”
emerged in the United Arab Emirates, which is the world’s
seventh-largest booking centre and is expected to surpass the
Channel Islands and the Isle of Man as the sixth-largest by

As for Hong Kong, the city’s anticipated rise to become the top
global financial hub was stalled by a temporary but significant
slowdown in Chinese inflow, BCG said. The jurisdiction’s severe
anti-Covid restrictions during the pandemic, plus the new
national security law enforced by Beijing in 2020, appear to have
affected Hong Kong. 

“Singapore now appears to be in a position to challenge Hong
Kong’s rise over the long term,” BCG said.

No room to relax

Reflecting on the bounceback in wealth last year, the report said
that while this was welcome news for advisors and banks, it is no
reason to relax. Margins have fallen “significantly” since 2007 –
the year before the financial crash.

“Industry players can no longer rely exclusively on revenues from
interest income, and they face rising costs due to inflation,
operational inefficiencies, and tightening regulatory
requirements,” the report said. 

Perhaps inevitably, generative artificial intelligence makes an
appearance in this year’s report. AI will “play a crucial role in
the digital transformation of wealth managers, with use cases
along the entire value chain,” BCG said.

AI and wealth

BCG’s GenAI in Financial Institutions benchmarking survey found
that among more than 60 major financial institutions – including
many wealth managers and private banks – 85 per cent think that
GenAI will be a highly disruptive and/or transformational

But even though everyone is talking about it, many players are
still hesitant to adopt it, BCG said, with 82 per cent of those
it questioned lacking an overarching, longer-term GenAI strategy
and a short-term implementation roadmap.

“GenAI and other AI tools will disrupt the traditional ways of
working for wealth managers,” said Akin Soysal, a BCG managing
director and partner and a co-author of the report. From client
acquisition and onboarding to servicing and ongoing support,
there are many ways that technology will streamline operations –
also in the area of compliance – while improving customer
experience. The challenge for wealth managers is to know where to