AFM Finds AI Use Accelerating in Asset Management as Governance & Controls Lag

Key Takeaways

• AI Adoption Outpacing Readiness: Asset managers are increasingly using AI, but investment, expertise, and internal controls are not keeping pace.
• Efficiency Driving Early Use: Firms are seeing operational and analytical benefits rather than immediate cost savings.
• Governance Gaps Persist: Many firms lack formal AI policies, especially for generative AI, and do not have dedicated ethical frameworks.
• Risk Exposure Growing: Weak controls increase exposure to data quality issues, bias, explainability challenges, and vendor concentration risk.
• Regulatory Expectation Rising: The AFM is calling for clearer policies, stronger oversight, and more explainable AI use across the sector.

Deep Dive

The Netherlands Authority for the Financial Markets has warned that artificial intelligence is being adopted rapidly across the Dutch asset management sector, but many firms are still falling short on governance, policy, and internal controls.

In a new report examining AI use across the industry, the regulator found that while adoption continues to expand—particularly in areas such as data analysis, price forecasting, and trading strategies, investment, oversight, and supporting frameworks are not keeping pace.

The findings point to a widening gap between ambition and readiness.

Adoption Rising, but Investment Uneven

According to the AFM, a growing number of asset managers are already integrating AI into their operations. Some firms are moving quickly, embedding the technology into core investment processes.

At the same time, many institutions are investing little or have allocated no formal budget for AI initiatives. Despite this, most expect spending to increase in the coming years as competitive and technological pressures build.

The regulator notes that this imbalance introduces risk. As AI capabilities advance, firms may find themselves relying on systems that outpace their internal expertise, processes, and controls.

Efficiency Gains Now, Longer-Term Strategic Potential

In the near term, firms see AI as a tool for improving efficiency rather than reducing costs. The main benefits cited include faster data processing, improved internal workflows, and enhanced analytical capabilities.

Over the longer term, the technology is expected to support more informed portfolio decisions and deeper market analysis. However, the AFM emphasizes that transparency toward investors will be critical as AI plays a larger role in investment processes.

Policy and Ethical Frameworks Lag Behind

The report highlights a clear shortfall in governance.

A quarter of institutions surveyed have no formal policy governing employee use of AI. For generative AI applications, more than two-thirds lack specific policies. In addition, over half of firms do not have an ethics handbook or code of conduct that explicitly addresses AI.

These gaps leave firms exposed to a range of risks, including poor data quality, algorithmic bias, limited explainability, and reliance on a small number of technology providers.

The AFM is urging firms to assess whether they are adequately equipped to deploy AI responsibly. This includes establishing clear policies, improving data quality management, conducting thorough supplier due diligence, and ensuring that models used are explainable and verifiable.

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