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In investment management, data security, operational resilience, and regulatory alignment are non-negotiable. As artificial intelligence moves from the fringes of innovative early adopters in asset management to a more centralized deployment across enterprises, those same rigorous standards must extend to the AI systems firms adopt.
Having third party approved compliance checks like SOC 2 Type II can act as a framework for assessing whether an AI partner will meet the same controls a company's internal systems already follow.
SOC 2 (System and Organization Controls 2) is a framework developed by the American Institute of CPAs (AICPA) for managing data based on five trust service principles:
Security, Availability, Processing Integrity, Confidentiality, and Privacy.
Given the scrutiny all financial decision making processes go through, including due diligence and compliance oversight, SOC 2 Type II offers a higher standard of evidence. It shows that systems aren't just designed to be secure — they're proven to operate securely in practice.
Investment management operates under a unique mix of regulatory scrutiny (SEC, OSC, FCA, etc.), fiduciary responsibility, and data sensitivity. AI solutions used in this context must meet strict criteria — not only in terms of accuracy and performance, but also governance and compliance.
For example:
As such, adopting AI without rigorous operational controls may introduce compliance risk.
A SOC 2 Type II certification should be table stakes for compliance, IT, and investment management teams to onboard an external AI tool.
Providers that are SOC Type II certified reduce friction in vendor due diligence by:
In practice, firms that use SOC 2 Type II-certified AI providers report shorter implementation timelines and fewer internal escalations. Gartner reports that 54% of organizations that use streamlined methods to screen for compliance uncover potential risks sooner than those that use exhaustive questionnaires.
At Boosted.ai, we have completed our SOC 2 Type II audit. The process included:
This certification has allowed clients — including hedge funds, long-only asset managers, and family offices — to adopt AI more confidently, with fewer barriers at the compliance review stage.
As the use of AI in finance expands, governance will become a differentiator. Investment managers are increasingly expected to show not just what tools they use — but why they trust them. A SOC 2 Type II report is not a silver bullet, but it’s a recognized signal of operational maturity and risk awareness. For firms handling sensitive portfolios and institutional capital, it should be a baseline requirement.
In investment management, data security, operational resilience, and regulatory alignment are non-negotiable. As artificial intelligence moves from the fringes of innovative early adopters in asset management to a more centralized deployment across enterprises, those same rigorous standards must extend to the AI systems firms adopt.
Having third party approved compliance checks like SOC 2 Type II can act as a framework for assessing whether an AI partner will meet the same controls a company's internal systems already follow.
SOC 2 (System and Organization Controls 2) is a framework developed by the American Institute of CPAs (AICPA) for managing data based on five trust service principles:
Security, Availability, Processing Integrity, Confidentiality, and Privacy.
Given the scrutiny all financial decision making processes go through, including due diligence and compliance oversight, SOC 2 Type II offers a higher standard of evidence. It shows that systems aren't just designed to be secure — they're proven to operate securely in practice.
Investment management operates under a unique mix of regulatory scrutiny (SEC, OSC, FCA, etc.), fiduciary responsibility, and data sensitivity. AI solutions used in this context must meet strict criteria — not only in terms of accuracy and performance, but also governance and compliance.
For example:
As such, adopting AI without rigorous operational controls may introduce compliance risk.
A SOC 2 Type II certification should be table stakes for compliance, IT, and investment management teams to onboard an external AI tool.
Providers that are SOC Type II certified reduce friction in vendor due diligence by:
In practice, firms that use SOC 2 Type II-certified AI providers report shorter implementation timelines and fewer internal escalations. Gartner reports that 54% of organizations that use streamlined methods to screen for compliance uncover potential risks sooner than those that use exhaustive questionnaires.
At Boosted.ai, we have completed our SOC 2 Type II audit. The process included:
This certification has allowed clients — including hedge funds, long-only asset managers, and family offices — to adopt AI more confidently, with fewer barriers at the compliance review stage.
As the use of AI in finance expands, governance will become a differentiator. Investment managers are increasingly expected to show not just what tools they use — but why they trust them. A SOC 2 Type II report is not a silver bullet, but it’s a recognized signal of operational maturity and risk awareness. For firms handling sensitive portfolios and institutional capital, it should be a baseline requirement.
In investment management, data security, operational resilience, and regulatory alignment are non-negotiable. As artificial intelligence moves from the fringes of innovative early adopters in asset management to a more centralized deployment across enterprises, those same rigorous standards must extend to the AI systems firms adopt.
Having third party approved compliance checks like SOC 2 Type II can act as a framework for assessing whether an AI partner will meet the same controls a company's internal systems already follow.
SOC 2 (System and Organization Controls 2) is a framework developed by the American Institute of CPAs (AICPA) for managing data based on five trust service principles:
Security, Availability, Processing Integrity, Confidentiality, and Privacy.
Given the scrutiny all financial decision making processes go through, including due diligence and compliance oversight, SOC 2 Type II offers a higher standard of evidence. It shows that systems aren't just designed to be secure — they're proven to operate securely in practice.
Investment management operates under a unique mix of regulatory scrutiny (SEC, OSC, FCA, etc.), fiduciary responsibility, and data sensitivity. AI solutions used in this context must meet strict criteria — not only in terms of accuracy and performance, but also governance and compliance.
For example:
As such, adopting AI without rigorous operational controls may introduce compliance risk.
A SOC 2 Type II certification should be table stakes for compliance, IT, and investment management teams to onboard an external AI tool.
Providers that are SOC Type II certified reduce friction in vendor due diligence by:
In practice, firms that use SOC 2 Type II-certified AI providers report shorter implementation timelines and fewer internal escalations. Gartner reports that 54% of organizations that use streamlined methods to screen for compliance uncover potential risks sooner than those that use exhaustive questionnaires.
At Boosted.ai, we have completed our SOC 2 Type II audit. The process included:
This certification has allowed clients — including hedge funds, long-only asset managers, and family offices — to adopt AI more confidently, with fewer barriers at the compliance review stage.
As the use of AI in finance expands, governance will become a differentiator. Investment managers are increasingly expected to show not just what tools they use — but why they trust them. A SOC 2 Type II report is not a silver bullet, but it’s a recognized signal of operational maturity and risk awareness. For firms handling sensitive portfolios and institutional capital, it should be a baseline requirement.
