A majority of private equity firms will hire top tech talent over the next five years, according to research by Intertrust.
In a survey of private equity professionals polled in September, 86 percent believe private equity firms will appoint senior technology leaders at C-suite level or equivalent with a mandate to drive change, according to the fund services firm’s Disruptive Technology in Financial Services report.
Emerging technologies such as blockchain, robotics and artificial intelligence are increasingly top of mind for private equity professionals, the survey found. This reflects growing interest in using AI for handling large volumes of investor queries more effectively by recognising questions being asked and recommending responses.
Other technologies that will disrupt the sector include virtual reality, 3D printing and internet of things.
Respondents in the survey also said that in five years’ time smart contracts will replace manual processes, with 56 percent saying digital innovation is having the greatest impact on the efficiency of the back-office systems.
Meanwhile cybersecurity and data breaches remain the biggest technology risk for private equity firms.
“The fact that cybersecurity has been identified as the biggest risk when assessing target companies is not surprising given the impact on reputation and potential consequences such incidents can have,” Michael Johnson, director of fund services at Intertrust, said in a statement.
“The impact of systems being unable to cope with regulatory change should not be overlooked as a real threat and firms need to ensure they are using the correct tools to prepare for emerging regulatory pressures.”