Artificial intelligence ( AI ) is becoming increasingly embedded in asset management operations, but firms are deeply concerned about the risks it introduces, from data governance to regulatory compliance, a new study finds.
While AI offers clear efficiency and alpha-generation opportunities, it also introduces new vulnerabilities that firms must actively manage, cloud-native investment platform Clearwater Analytics says in the report, GenAI and the Data Divide.
The study highlights the gap between AI adoption and readiness. Nearly two-thirds ( 62% ) of asset managers are concerned they lack the skills and experience to use AI effectively, with 43% describing themselves as very concerned.
More than half ( 52% ) are concerned that internal culture and resistance to change will slow adoption and readiness. The findings suggest that for many firms, the biggest barrier to realizing AI’s potential is not the technology itself, but the culture within the organization adopting it.
Technology risk
A fundamental question involves trust: can firms rely on what the technology produces? Two-thirds ( 67% ) of respondents are concerned about data governance, reliability and integrity risks, while 64% are concerned about operational risks.
Given the increasing number of asset managers using AI to support investment decision-making, 64% of respondents say they are worried about model/algorithm transparency, explainability and bias. In addition, 62% are concerned about hallucinations, where AI generates plausible-sounding but false information and presents it as true.
Also, more than half ( 55% ) of global asset managers say they are concerned about the regulatory risks of AI, with 30% saying they are very concerned. About 58% of respondents worry about the financial risk from AI, including management of credit, market and fraud risks. About 64% voice concerns about the implementation costs of AI.
The research also reveals that while many asset managers say they are prepared to manage AI-related risks, readiness remains an issue. In particular, 16% of asset managers surveyed say they are not prepared for AI-enabled operational risks, and 15% say they are not ready for risks arising from the lack of AI skills and experience across their organizations.
Human factor
To help mitigate AI-enabled risks, nearly all ( 93% ) agree that the best approach is to balance human expertise with technology, using AI to augment or empower risk teams rather than replace them.
Souvik Das, chief technology officer at Clearwater Analytics, comments: “What struck me most in this research is how often the same root cause appears, no matter which risk we asked about. 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.”
For the study, Clearwater Analytics commissioned independent research agency PureProfile to interview 178 senior executives working for asset management firms, including insurance asset managers, hedge funds, private credit managers and general asset managers based in Europe, the United States and Asia. The research was conducted in March 2026.
