Published jointly by the Center for Audit Quality and KRC Research, this Institutional Investor Survey on AI Use finds that AI is becoming a mainstream investment research tool, with 68% of institutional investors reporting extensive or moderate use and 83% expecting their use to increase over the next two years. Investors are using AI most frequently to analyze earnings calls, while 41% regularly use it to analyze company filings such as Forms 10-Ks and 10-Qs. When reviewing filings, investors most commonly use AI to summarize MD&A and risk factors and extract financial or operational metrics, as well as to compare companies, identify inconsistencies, and flag anomalies or red flags.
The findings also suggest that human oversight remains an important part of investors’ use of AI: 54% take a “trust but verify” approach to AI-generated insights and 60% say AI informs investment decisions with human oversight. Data quality and reliability remain investors’ biggest concerns, even as two-thirds report that AI has improved their firms’ investment performance over the past year.
This post first appeared in the weekly Society Alert!