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AI ascends: Artificial Intelligence is reshaping possibilities

AI ascends: Artificial Intelligence is reshaping possibilities

15 January, 2024

Fund managers, family offices, board directors and corporates embrace artificial intelligence

Ocorian is a market leader in administration, regulation and compliance solutions for funds, corporates, capital markets and private clients has published its latest international research* which uncovers a significant shift in focus among alternative fund managers, board directors of leading firms with an annual turnover of over $250 million, and family office professionals towards Artificial Intelligence (AI).

Focus on AI intensifies as projects deliver strong results

The financial sector is undergoing a transformative journey, and Ocorian's latest research reveals that AI is at the forefront of this evolution. An overwhelming 97% of alternative fund managers, 94% of board directors, and 92% of family office professionals acknowledge the importance of AI in their company's success over the next five years, indicating a seismic shift in strategic priorities. Success stories abound, with 91% alternative fund managers, 88% family office professionals, and 82% of board directors reporting strong results from AI test projects, marking a significant endorsement of the technology's potential.

Compliance and regulation take centre stage as the most promising domains for AI applications, reflecting the industry's commitment to leveraging technology for efficiency and risk management.

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 the 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.”

About Ocorian fund services

Ocorian’s fund services team delivers operational excellence across fund administration, AIFM, depositary and accounting services to the world’s largest financial institutions along with dynamic start-up fund managers and boutique houses. It’s team of over 300 funds specialists work across all major asset classes of alternative investment funds such as private equity, real estate, infrastructure, debt and venture capital, whilst its specialist Islamic Finance team is a leading provider of Sharia-compliant investment structures.

Ocorian’s private client solutions

Ocorian’s team are highly regarded experts in trusts and foundations, succession planning, philanthropy, regulatory and tax compliance, and fiduciary services and deliver solutions with skill, precision, and absolute discretion.

Ocorian's subsidiary compliance consultancy

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. 

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*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.