AI on the march in a highly regulated industry, study shows

Ocorian’s recent Outlook 2024* research and its specialist research amongst regulatory and compliance professionals** has been covered in Forbes Magazine.

The studies show compliance and regulation is regarded as the area most likely to provide a role for use of AI amongst alternative investment managers.

As per Wintermeyer’s article, survey respondents* ranked compliance and regulation first above sales and marketing activity, recruitment, administration, identifying and reviewing investments, and client servicing and reporting, as the functions that AI will have the most impact on over the next five years.

More than nine in ten (92%) alternative investment managers are already using AI as part of risk and compliance procedures. Around one in ten (11%) started doing so more than two years ago. Over half (55%) started two years ago, and 24% started between one and two years ago.

Joe French, Managing Director and Head of Financial Crime, at Ocorian, says: “The majority of alternative fund managers have already been using AI within their compliance and risk procedures for around two years. When used for the right type of tasks, AI can transform the ability of over-stretched, under-resourced compliance teams.”

His view is backed up by further specialist research Ocorian conducted among compliance and risk professionals**. It interviewed senior leaders and senior compliance and risk executives at alternative fund manager firms which collectively manage around $132.25 billion assets under management working across the U.S., the U.K., Germany, Brazil, Singapore, Hong Kong, U.A.E, Turkey, Quatar, and Saudi Arabia.

More than nine out of 10 (92%) interviewed indicated they are already making use of AI in their organisations with more than half (55%) indicate they started using AI two years ago. Among the few who admit to not using AI around 71% plan to do so within six months.

Use the latest technology to keep your business in good standing

As regulatory demands increase, businesses often find it difficult to ensure they remain compliant on a continuous basis.

Our subsidiary compliance consultancy service, Newgate Compliance (UK and Channel Islands), deliver pragmatic and flexible solutions to help our clients meet what are often complex and evolving regulatory obligations.

We assist with a broad range of compliance services such as submission of regulatory authorisation applications, provision of Money Laundering Reporting Officers (MLROs), the implementation of compliance frameworks and governance structures, as well as regulatory and compliance training for employees. 

All of which is backed by our innovative cloud-based regulatory compliance solution, The Gateway which is about to announce a new AML module, building on its extensive end-to-end power.

*Ocorian commissioned independent research company PureProfile to conduct a global study of 301 senior executives. The survey was carried out among board directors at companies with annual turnover of more than $250 million, fund managers working in family offices, private equity, venture capital and real estate; and senior executives working in capital markets focused on structured credit, CLOs, securitisation, mortgage-backed securities and asset- backed securities. Respondents to the survey, which was conducted in November 2023, were based in the UK, continental Europe, Asia, the Middle East and North America and included 150 alternative fund managers.

**Ocorian commissioned independent research company PureProfile to conduct a global study (across the US, UK, Germany, Brazil, Singapore, Hong Kong, UAE, Turkey, Quatar, Saudi Arabia and Mauritius) of 101 senior regulation and compliance executives working at alternative fund manager firms (including private equity, venture capital, real estate, infrastructure, private debt, renewables and hedge funds) during January 2024.