Clearwater Analytics: Fund manafgers fear they are spending too much on AI
A striking investment paradox is emerging at the heart of the asset management industry's AI revolution, new global research from Clearwater Analytics reveals.
One in four (25%) fund managers believe their organisation is still not investing enough in AI, but a striking 66% say they fear their firms are already over-investing. Together, these findings expose a fault line running through the industry: for all the conviction that AI is essential, there is no consensus on what the right level of commitment looks like in practice - and for an industry where capital allocation decisions carry significant weight, that lack of consensus carries real risk.
While AI budgets across the fund management industry are growing at an extraordinary pace - with 63% of firms increasing AI spending by more than 50% in the past 12 months and not a single firm reporting a budget decrease - the industry is deeply divided about whether it is spending the right amount.
Contrary to the narrative of an industry playing catch-up, the research reveals that AI adoption in asset management is more mature than commonly assumed. The majority of fund managers (56%) began integrating AI four to five years ago, and a further 34% started their journey two to three years back. Only 9% have begun AI integration within the past year.
This means the industry is not at the beginning of its AI journey - it is in the middle of it. The challenge is no longer whether to adopt AI, but how to scale it effectively, govern it responsibly, and calibrate the right level of investment to deliver measurable returns.
The research found that fund managers are using AI across all of their key operations:
- Investment Decisions: 43% of managers now use AI for 25–49% of their investment decision-making; 10% rely on it for the majority of their investment calls
- Risk Management: 38% apply AI to 25–49% of their risk processes; 8% use it for the majority of risk assessments
- Operations: 34% integrate AI into 25–49% of operational decisions; 6% use AI for over half of their operational workflows
Some 178 senior executives working for asset management firms were surveyed.
