It is an unsaid truth. Most fund administrators would agree, but few say it publicly.

A meaningful part of the industry's reputation has been built on heroics around inefficient design, including late NAV cycles, reconciliations that nearly work, and reporting delivered because good people repeatedly stretch.

The effort is real and the outcomes are appreciated, but structurally it is friction. Being excellent at managing friction does not mean that friction should remain.

AI Is Not Incremental Automation

Previous technology waves helped teams move faster. What is emerging now is different.

Systems are increasingly designed to take an objective, such as reconciling positions, validating compliance, or completing onboarding, and execute the workflow within defined controls while escalating only true exceptions. This is execution rather than assistance.

Fund administration is well suited for this shift because it is rules based, data dense, audit driven, and operates with very little tolerance for error. It is not creative chaos. It is precision operations at scale.

The Constraint Was Architecture, Not Talent

Many firms say they are adding AI, but in practice this often means layering tools on top of fragmented infrastructure. This increases dependency on people instead of reducing it.

Digital workers require a clear foundation, including a single source of truth, deterministic processes, traceability, and systems that communicate natively with each other.

Without that foundation, AI remains a feature. With it, AI becomes the operating layer. That distinction is fundamental.

The Formidium Path

At Formidium, owning the platform has been about coherence rather than branding.

When accounting, investor data, and reporting operate on the same backbone, the nature of the work changes. Disagreements about numbers are reduced, breaks surface earlier, and reporting becomes a natural output of operations rather than a separate effort layered on top.

This reduces the movement of data, removes friction, and increases certainty across the process.

What Happens Next

The industry is gradually separating into two models. One relies on adding people to manage growth, while the other builds autonomous capacity to absorb it.

Only one of these approaches scales cleanly, protects margins as complexity increases, and reduces operational risk rather than adding to it.

AI is already present in fund administration. The question is not whether it will be adopted, but whether operating models are designed to support it or whether firms will continue trying to retrofit it into systems built primarily for human throughput.

Five years from now, fund administration may not look dramatically different on the surface. Reports will still be delivered and NAV calculations will still be completed. What will change is the extent to which those outcomes depend on manual intervention.

That is the shift underway.

Firms that move early will not only improve efficiency but will operate with greater control, consistency, and confidence. If this is something you are thinking through, you can get in touch with Formidium to continue the conversation.

About the Author

Mandar Mhatre is a Global Chief Revenue Officer at Formidium and leads the firm's European buildout. He was previously India CEO for EPIC Investment Partners and Apex Group. He began his career in equity research before moving into investment banking and later served as interim Head of Asia Strategy for JPMorgan Chase. Outside of work, he is a prolific investor, mentor, and published author.