U.S. and Canadian VC and private equity firms focus on cybersecurity and AI risks

• Study shows cybersecurity and AI compliance issues pose biggest technology challenges

• Lack of qualified compliance staff and addressing regulatory complexity in offshore jurisdictions top the list of people-related compliance pressures

Venture capital and mid-market private equity firms are focusing on the growing regulatory challenges from cybersecurity and AI, new research* for Ocorian, a leading U.S. and global asset service provider, shows.

Around three out of four (75%) believe cybersecurity compliance issues around data protection will pose the greatest technology-related challenge to their firm over the next two years, ahead of 60% who point to the challenges of adapting to AI governance and its use in compliance.

The study with senior U.S. and Canadian executives at mid-market private equity and venture capital firms responsible for $335.25 billion assets under management examined how they rank the emerging technology-related and people-related pressures.

More than six out of 10 (61%) believe recruiting and retaining qualified compliance professionals and regulatory complexity in offshore jurisdictions will be the biggest people-related challenges for their firms over the next two years, the research by Ocorian, which provides fund solutions in the U.S. and globally, found.

Integrating new technology with legacy systems was rated the biggest challenge by 58%, while 53% pointed to the cost of compliance technology such as platforms and RegTech tools and 52% highlighted the pressure of keeping up with regulatory requirements for digital infrastructure.

Around half (45%) ranked the cost of internal compliance resources as a major people-related compliance challenge for their firm with 42% saying that SEC scrutiny and enforcement actions plus the need for independent scrutiny would pose the greatest challenge to their firm. More than a quarter (26%) say reliance on external counsel would pose the biggest challenge to their firm.

The study found that industry reputation is the most important factor when choosing external vendors for compliance or technology support chosen by 49%. However, as the data below shows, a wide range of factors are important. Cost was rated as most important by 28%.

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Howard Nurtman, Head of U.S. Regulatory and Compliance, Fund Solutions, at Ocorian, said: “The regulatory landscape for VC and private equity is shifting faster than ever. Cybersecurity and AI governance are no longer emerging issues; they’re here, they’re complex, and they demand specialist attention. This aligns completely with what our Global Asset Monitor has been tracking globally: technology-driven compliance risk has risen to the top tier of manager concerns for three consecutive years.

“Despite investment in technology, the pressure on people hasn’t gone away. Compliance teams are stretched, recruitment is difficult, and regulatory expectations, particularly cross-border, continue to intensify. Firms are realizing that solving this isn’t just about tools, it’s about experience.

“It’s not surprising that reputation and regulatory track record now outrank cost when selecting external partners. In a more scrutinized environment, managers are prioritizing providers who can demonstrate credibility, integration capability and genuine regulatory fluency. Outsourcing isn’t a cost solution anymore, amongst many other things, it’s a strategy for building resilience.”

* In May 2025 Ocorian commissioned independent research company PureProfile to interview 100 senior venture capital and mid-market private equity professionals in the U.S. and Canada working for firms with $335.25 billion assets under management.

About Ocorian

Ocorian is a global leader in fund services, corporate and trust services, capital markets, and regulatory and compliance support.

Unlocking new value for its clients across jurisdictions and service lines is Ocorian’s priority; it manages over 17,000 structures on behalf of 8,000+ clients including financial institutions, large-scale international organisations, and high-net-worth individuals.

Ocorian provides fully compliant, tailored solutions that are individual to clients’ needs, no matter where in the world they hold financial interests, or however they are structured.

The group offers a full suite of corporate, fund and private client services across a network of offices spanning all the world’s financial hubs. Locations include Bermuda, BVI, Cayman, Denmark, Finland, Germany, Guernsey, Hong Kong, Ireland, Isle of Man, Jersey, Luxembourg, Mauritius, Netherlands, Norway, Singapore, Sweden, UAE, the UK, and the US.

To find out more about Ocorian and its services, including regulatory information, visit www.ocorian.com