Key Takeaways
- • EY's inaugural WAM Risk Pulse Survey finds wealth and asset management firms are prioritizing AI for risk identification and monitoring, with 40% of AI/ML-using firms applying the technology to risk identification.
- • Technology-driven risks, including cybersecurity, third-party and Nth-party dependencies, and AI governance, are now viewed as among the most severe threats over the next 12 months, alongside traditional economic and geopolitical risks.
- • 69% of WAM firms expect to increase risk management budgets over the next 12 months compared with 2025, and 73% and 65% anticipate first-line and second-line risk headcount growth, respectively.
- • Firms are moving risk oversight into first-line committees (64%) and adopting hybrid models, with control design and risk event management each cited by 92% of respondents.
- • Operational efficiency priorities include AI use cases (93%), new internal tools (87%), and outsourcing (60%).
Summary
Ernst & Young LLP (EY US) launched its inaugural WAM Risk Pulse Survey to examine how wealth and asset management (WAM) firms are adapting risk functions to a shifting landscape. According to the survey, WAM firms are increasingly identifying, exploring and deploying AI, generative AI and machine learning use cases to digitally transform risk management. Among firms using AI and ML, 40% apply these technologies to risk identification, 33% to reviewing advertising and marketing materials, and 27% to improving training and knowledge management. Attention is also growing on data quality, accessibility and integration to support AI use at scale.
WAM executives identified technology-driven vulnerabilities as increasingly significant. While economic, geopolitical and political factors remain highly cited, cybersecurity, third-party and Nth-party dependencies, and emerging AI and AI-governance risks stand out as areas where firms anticipate the most significant disruptions over the next 12 months. Technology enablement across the risk lifecycle varies widely, with many firms still relying on traditional governance, risk and compliance (GRC) platforms. EY observed that leading firms achieve meaningful transformation by integrating legacy systems with emerging AI tools.
Governance and risk oversight are a top priority as AI adoption accelerates. Most firms are establishing dedicated plans, formal policies and staff training for AI risk, and are embedding monitoring and controls within existing risk, compliance, technology and business functions. Risk oversight is shifting toward first-line committees (64%), and hybrid first-line models blending dedicated risk teams with embedded resources are becoming common. Most firms have formally established a Chief Risk Officer role, though reporting lines vary, and many are implementing business-aligned risk officers within the first line.
Firms expect risk investment to grow, with 69% anticipating larger risk management budgets compared with 2025. Recent funding has centered on technology solutions and cybersecurity, alongside risk program uplift and business continuity. Looking ahead two years, WAM firms cite AI use cases, new internal tools and outsourcing as key efficiency priorities, though EY notes that AI adoption has not yet translated into expectations of reduced risk staffing. EY concludes that WAM firms are at an inflection point, increasingly investing in data, technology and AI-enabled risk capabilities to treat risk as an enabler of informed decision-making.
WAM executives identified technology-driven vulnerabilities as increasingly significant. While economic, geopolitical and political factors remain highly cited, cybersecurity, third-party and Nth-party dependencies, and emerging AI and AI-governance risks stand out as areas where firms anticipate the most significant disruptions over the next 12 months. Technology enablement across the risk lifecycle varies widely, with many firms still relying on traditional governance, risk and compliance (GRC) platforms. EY observed that leading firms achieve meaningful transformation by integrating legacy systems with emerging AI tools.
Governance and risk oversight are a top priority as AI adoption accelerates. Most firms are establishing dedicated plans, formal policies and staff training for AI risk, and are embedding monitoring and controls within existing risk, compliance, technology and business functions. Risk oversight is shifting toward first-line committees (64%), and hybrid first-line models blending dedicated risk teams with embedded resources are becoming common. Most firms have formally established a Chief Risk Officer role, though reporting lines vary, and many are implementing business-aligned risk officers within the first line.
Firms expect risk investment to grow, with 69% anticipating larger risk management budgets compared with 2025. Recent funding has centered on technology solutions and cybersecurity, alongside risk program uplift and business continuity. Looking ahead two years, WAM firms cite AI use cases, new internal tools and outsourcing as key efficiency priorities, though EY notes that AI adoption has not yet translated into expectations of reduced risk staffing. EY concludes that WAM firms are at an inflection point, increasingly investing in data, technology and AI-enabled risk capabilities to treat risk as an enabler of informed decision-making.
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