Board directors of leading firms with an annual turnover of over $250 million, are intensifying their focus on developing Artificial Intelligence (AI) for use in their sector as initial projects they have run deliver strong results, new research from Ocorian, a market leader in regulation and compliance services for funds, corporates, capital markets and private clients.

Key Findings:

• Three out of five board directors of leading firms are very focused on developing AI in their sector, Ocorian study shows

• More than two in five have seen strong results from projects they have already run

• Compliance and regulation and identifying and reviewing investments seen as the key uses for AI by board directors

The international study with board directors found 61% are very focused on the development of AI for their sector while 33% say they are quite focused. Just 6% are not focused or do not have a view.

Almost all (94%) say AI will be important to the success of their company over the next five years including 53% who believe AI will be very important to how their fund performs.

That is partly explained by the success of projects that firms have run with AI – around two in five (41%) have seen strong results from tests they have done, and the same number say the results have been quite strong. Just 14% say projects have delivered average results while just 4% did not express a view or said they had not at least tested AI.

Ocorian’s study found that compliance and regulation is regarded as the area most likely to provide a role for the use of AI with identifying and reviewing investments ranked as the second most likely area for the use of AI. Administration, client servicing and recruitment are also seen as a fertile ground for the use of AI. Relatively low numbers of board directors ranked sales and marketing as areas where AI could play a major role.

More than four out of five (86%) of board directors questioned said their budgets for AI will increase over the next two years with nearly two in five (37%) predicting a dramatic increase in budgets.

Yegor Lanovenko, Co-Head of Fund Services at Ocorian, said: “It is clear that generative AI has transformative potential for productivity, ways of working and economy as a whole."

"When new technologies emerge, they benefit different sectors at different times. First companies spend time experimenting with generative AI, before starting to plan to deploy on a larger scale. This research shows AI is being embraced by the alternative funds sector with fund managers globally along this pattern, recognising its potential and competitive advantages for first movers."

“Alternative fund managers are moving from an experimentation period after achieving success with pilots to larger scale adoption for real-world use cases across investment operations, compliance and managing risks."

“Given the continued investment into AI globally, we can expect more AI products to hit the market, and there is potential for alternative managers to take the lead in early adoption with the help of partners with a strong technology and innovation ethos to navigate emerging regulatory landscape, implementation and privacy considerations."

"Alternative fund managers see a growing role for AI in compliance and regulation as well as identifying and selecting investments but that is likely to change as firms make more use of the technology and it underlines the need for partners with strong technological understanding.”