Asset managers are likely to face scrutiny over their use of AI as institutional investors begin to assess AI capabilities as part of manager selection and due diligence, according to research from fintech company Clearwater Analytics.
The survey of 178 investment professionals found that 90% expect allocators to increase their scrutiny of AI adoption over the next three years, with 35% anticipating a dramatic rise.
In the UK, 84% of respondents expect allocator scrutiny of AI adoption to increase, including 36% who expect a significant rise. In continental Europe, 85% believe scrutiny will intensify, although 22% expect it to increase dramatically.
When human expertise meets machine-learning
Some 42.5% of European investment professionals said AI-generated analysis is used between a quarter and half of the time when making investment decisions.
“AI is becoming a standard part of institutional due diligence. Allocators want more than a promise that AI is ‘being explored.’ They expect a clear strategy and evidence it’s delivering value,” according to Keith Viverito, managing director, Emea of Clearwater Analytics. “Fund managers need to show how AI is improving research, reporting, and risk management. Over the next five years, the firms that stand out will be the ones who can show where AI is improving decision-making, strengthening governance, and delivering better outcomes for clients.”
