By 
Cybersecurity and data protection compliance have emerged as the paramount technology-related concern for venture capital and mid-market private equity firms. This is according to new research commissioned by Ocorian, a leading global asset services provider. A significant 75% of executives identified it as their greatest challenge for the next two years. It surpasses even the complexities of AI governance (60%).
RELATED: New report advocates ethical AI governance and inclusive policies in East and Southern Africa
The study, which surveyed senior U.S. and Canadian executives managing over $335 billion in assets, reveals a sector grappling with a dual burden: rapidly evolving technology regulations and a critical shortage of skilled compliance professionals.
The Mounting Technology Compliance Burden
Beyond cybersecurity, the research highlights a suite of interconnected technology pressures straining firms:
- Legacy System Integration: Cited by 58% as a major hurdle.
- Cost of Compliance Tech: A significant challenge for 53%, referencing platforms and RegTech tools.
- Digital Infrastructure Rules: Keeping pace with these requirements pressures 52% of firms.
This technological complexity is compounded by the rise of AI, with 60% of leaders pointing to the challenge of adapting to AI governance and its use within compliance functions.
The People Problem: Talent Gaps and Regulatory Scrutiny
The human element of compliance presents an equally daunting challenge. The study found that 61% of firms believe recruiting and retaining qualified compliance professionals will be their biggest people-related hurdle, tied with navigating regulatory complexity in offshore jurisdictions.
Additional people pressures include:
- Cost of Internal Resources (45%)
- SEC Scrutiny & Enforcement Actions (42%)
- Reliance on External Counsel (26%)
A Strategic Shift in Partner Selection
Faced with these pressures, firms are changing how they select external support. The study found that industry reputation and regulatory track record (49%) now outrank cost (28%) as the most important factor when choosing compliance or technology vendors.
“The regulatory landscape is shifting faster than ever. Cybersecurity and AI governance are no longer emerging issues; they’re here, they’re complex, and they demand specialist attention,” said Howard Nurtman, Head of U.S. Regulatory and Compliance at Ocorian.
He added that outsourcing is increasingly viewed not as a mere cost solution, but as a strategic move to build resilience with partners who demonstrate credible expertise and integration capability.
The findings underscore that for VC and PE firms, navigating the future requires mastering both cutting-edge tech regulations and solving a persistent talent crisis.
