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The rapid rise of Artificial Intelligence (AI) in investment operations has continued, with a new study saying as many as 70% of buy-side firms are employing AI to support their front office.

This is according to a study commissioned by technology company SimCorp. The number marks an increase from last year’s report, which showed that only about 10% of respondents were actively exploring AI tools.

“At the time, 75% recognised AI’s potential, but they still needed guidance on how to integrate it,” said SimCorp.

The 2026 InvestOps Report drew on responses from 200 executives at asset managers, pension funds and insurance companies worldwide. The respondents were surveyed by WBR Insights to identify their technology priorities and challenges heading into 2026.

“AI adoption has shifted from pilots to business-critical applications in the front office,” said Peter Sanderson, Chief Executive Officer, SimCorp.

“I’m not surprised to see 58% of firms in this survey choosing vendor and platform consolidation as a technology initiative."

Sanderson said that advancements in AI could deliver value for investment professionals in several ways, including enhanced decision-making and efficiency, especially when underpinned by good central governance and a unified data layer.

The report said that consolidating technology vendors and platforms (58%) and modernising technology architecture and data infrastructure (54%) are the top technology initiatives for buy-side firms.

“I’m not surprised to see 58% of firms in this survey choosing vendor and platform consolidation as a technology initiative,” said Sanderson. “It's the first step toward bringing all their data together so they can have better control, trust their information, see their entire portfolio clearly, and use AI to gain insights.”

Private markets – the driver?

The report said the rapid uptick in investment in private markets by investment companies and fund managers could be part of the reason for the adoption of AI.

It said that total portfolio visibility across illiquid and liquid holdings was now considered important. “With private markets becoming core allocations, insurers need consistent, real-time views across the whole portfolio to support asset-liability matching, risk measurement and performance analysis — something fragmented systems struggle to deliver,” it said.

A 2025 study said that over half of fund administrators (55%) were struggling with data acquisition and governance due to the rapid growth of private markets. The report from service providers Accelex and FactSet said the rapid growth of private markets is intensifying data challenges for fund administrators.

“The objective is to build end-to-end processes from the outset that cover operations and governance controls through this growth period."

Private markets have come into favour because the business models that have dominated asset management for years have nearly run their course, said Bain & Company in a paper on “riding the wave” of private markets. It urged companies to develop new front-to-back-office capabilities to deal with the operational strain of private assets. “This can be accomplished through Salesforce training, onboarding product specialists, and redesigning operations, technology, risk, and legal processes.”

Fund operator specialists have spoken recently about how important getting a private markets strategy correct is, and how new tools could be the most beneficial way of doing so.

“The objective is to build end-to-end processes from the outset that cover operations and governance controls through this growth period,” said Gavin Lau, Managing Director, Head of Private Credit Fund Management, Macquarie Asset Management, last year to Fund Operator.

Managing this might just be where the rise of AI is coming from.

What happens next?

SimCorp said evolving operational models will develop, including more hybrids.

“As insurers confront manual processes and operational bottlenecks, newer hybrid models that combine internal control with managed services help maintain data ownership while unlocking capacity for value-creating activities,” said the report.

Looking ahead, they added, respondents ranked AI, generative AI, and advanced analytics (72%) as the area offering the greatest opportunity for technological innovation.

Another area poised for innovation is within alternative investments, where operational complexity and fragmented data often result in limited automation.

Funding for AI companies totalled $47.3 billion globally in Q2 2025, the second-highest quarter on record and the third straight quarter above $40 billion.

Worldwide AI spending was thought to total $1.5 trillion in 2025.

Financial services companies were projected to spend $58.3 billion on AI solutions by the end of 2025, according to data from Stocklytics, IDC, and the IMF.

Whether this works remains to be seen.

 

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