Use of AI by Asset Managers: Navigating Opportunities and Risks
The recent analysis by the AFM reveals a significant trend in the asset management sector: over half of asset managers are either using AI or plan to within the next year. This shift towards advanced algorithms and AI applications is particularly pronounced among larger fund managers and proprietary traders, indicating a transformative moment for the industry. However, with great opportunity comes substantial risk, as many institutions are unprepared for the challenges that AI presents.
The AFM’s findings highlight a concerning lack of preparedness among asset managers regarding AI governance. A staggering 26% of firms lack any policy for AI use, and 54% do not have an ethical framework in place to guide their AI applications. This raises critical questions about transparency and accountability in AI-driven investment strategies. As the sector evolves, it is imperative for asset managers to not only embrace AI but also to implement robust risk management practices to safeguard their operations and clients.
Looking ahead, the AFM emphasizes the need for clear responsibilities in AI development and implementation, along with stringent monitoring of AI applications. As asset managers navigate this complex landscape, how will they balance innovation with the ethical considerations that come with AI?
Original source: https://www.regulationtomorrow.com/2026/04/use-of-ai-by-asset-managers/