Asset managers have raised concerns around the risks posed by artificial intelligence as it becomes more deeply embedded in asset management operations, according to new research from Clearwater Analytics.
Clearwater’s ‘GenAI and the Data Divide’ study, which polled insurance asset managers, hedge funds, private market specialists and general asset managers, found that AI introduces new vulnerabilities that firms must actively manage.
Nearly two thirds (62%) of asset managers are concerned they lack the skills and experience to use AI effectively, while more than half (52%) are concerned that internal culture and resistance to change will slow adoption and readiness.
Meanwhile, more than two thirds (67%) of asset managers are concerned about data governance, reliability, and integrity risks, while 64% are concerned about operational risks. The same proportion (64%) are worried about model/algorithm transparency, explainability and bias.
Regulatory risks were also a factor, with more than half (55%) of global asset managers concerned and 30% stating they are very concerned. A similar number (58%) are worried about the financial risk from AI, including management of credit, market and fraud risks.
Despite the speed at which AI is being implemented across businesses, 16% of asset managers surveyed said they are not prepared for AI-enabled operational risks.
Souvik Das, CTO at Clearwater Analytics, said: “Underneath the concerns about skills, culture, governance, and compliance sits one common thread. Firms don’t yet fully trust the data feeding their AI. That’s a natural stage for any technology this new to move through.
“The firms navigating it well are the ones treating their data with the same care they bring to the technology itself. That’s what turns AI from something people double-check into something they can rely on to tell them the truth about the risk in front of them.”
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