New research from Clearwater Analytics finds that nine out of ten asset managers expect investors to demand meaningful AI budgets within three years. The report, "GenAI and the Data Divide," published August 6, surveyed insurance asset managers, hedge funds, private markets specialists, and general asset managers. Every respondent reported an increase in client questions about how AI is used.
Investors are asking about AI
The research shows the scale of client curiosity. More than two-fifths (43%) of asset managers say between a quarter and half of their client base asks about how AI is employed. Two-fifths say between 10% and 24% of clients investigate the technology.
Institutional allocators are increasingly scrutinizing how fund managers integrate AI, a pattern that mirrors broader adoption of AI for Finance across financial services. Many are more likely to invest in firms that allocate meaningful budgets to AI research and implementation. More than a third (34%) expect this trend to increase dramatically over the next three years, and 57% say it will increase slightly. Just under one in ten (9%) say it will stay the same.
Client confidence is high
Client sentiment toward AI deployment is largely positive. Eighty-five percent of respondents say their investors' perception of their AI use is positive, and 10% say it's very positive.
Asset managers also express confidence in their own capabilities. Thirteen percent say they are more advanced with AI than other firms, 71% believe they are quite advanced, 15% say they are comparative, and just 2% say they are falling behind.
What clients value most
When asked which AI areas matter most to clients, the majority of asset managers say data governance, accuracy, and enterprise security are paramount. Automation and human intervention ranked lower.
Agentic AI has become entrenched across the industry. Ninety-one percent of respondents say autonomous AI agents, capable of handling multi-step tasks with minimal human intervention, are important to their business, and 2% call it critical.
On client engagement, asset managers say these AI applications have had the biggest positive influence:
- AI-powered support and Q&A
- Automated client communication and reporting
- Personalization at scale
- Enhanced transparency and timeliness
- Sentiment analysis
Souvik Das, CTO at Clearwater Analytics, said: "AI is transforming the client-manager relationship from a periodic, product-led interaction into a continuous, data-rich partnership where transparency, customization and demonstrable analytical edge are key to winning and retaining institutional mandates. The technology is no longer just about improving performance; it's redefining what good service looks like. Institutional investors increasingly expect real-time insight, tailored solutions and explainable decision-making, raising the bar for the entire industry."
Why this matters for management
For managers, the research shows that AI budgets are becoming a visible signal to institutional clients. Data governance and security matter more to clients than automation itself, and clients are asking harder questions about how AI is used. Managers who can answer those questions clearly, and show results, have an edge in winning and retaining business.
The same principles apply to managers in any industry, and structured training in AI for Management can help leaders put them into practice. The full "GenAI and the Data Divide" report is available on the Clearwater Analytics website.
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