By: Frank Vesce
Chief Information Security Officer • Legal & Technology Risk Department
October 15, 2025
The private capital markets are increasingly exploring AI technologies, necessitating CISOs to adopt a continuous improvement mindset regarding AI governance and data security controls. Iterative risk management processes tailored specifically to meet evolving technological landscapes are critical to this process.
Continuous Controls Monitoring (CCM) is essential, allowing real-time assessment and adjustment of cybersecurity controls to keep pace with the rapidly changing AI and cyber threat environments. Through CCM, CISOs gain insights into control effectiveness, enabling proactive adjustments rather than reactive fixes.
Regular tabletop exercises specifically focused on AI-related incidents further support a robust cybersecurity posture. By simulating realistic scenarios such as AI-driven data breaches or AI model manipulation attacks, CISOs can test organizational response plans and update them continuously based on insights gained.
Embedding risk officers across business units helps private capital market firms maintain a frontline understanding of operational risks related to AI adoption. These embedded risk officers can relay timely feedback to the information security teams, facilitating informed, agile security decisions and ensuring AI controls evolve alongside operational needs.
Additionally, periodic penetration testing of AI systems helps uncover hidden vulnerabilities before attackers exploit them. Firms should invest in both automated and manual penetration tests to comprehensively assess their AI infrastructure, prioritizing identified risks for immediate mitigation.
As you continue to improve and enhance your controls, you also need to understand the risk of Shadow AI. As AI adoption accelerates across the private markets landscape, a growing concern for CISO’ and Technology leaders is the rise of Shadow AI. Shadow AI is the unauthorized use of AI tools by teams or individuals without visibility or approval from IT, risk, or compliance functions. In a sector where sensitive deal data, investor communications, and proprietary information are a significant part of value creation, the risks are present. Unauthorized use of AI platforms can inadvertently expose LP information, model financials using uncontrolled inputs, or even breach confidentiality agreements. The lack of oversight goes against core principles of fiduciary responsibility and regulatory compliance, particularly as AI related regulations begin to take shape globally.
For private market firms, detecting and mitigating Shadow AI starts with proactive governance, not reactive enforcement. Portfolio company CISOs, CIOs and CTOs should prioritize AI usage audits, integrate AI data loss prevention tools, and apply cloud access security brokers (CASBs) to monitor interaction with unapproved AI platforms. The solution is not to shut the door on innovation, it’s to enable it safely. C-suites should establish approved AI toolkits, develop clear usage guidelines, and align AI governance with existing cyber, legal, and compliance frameworks. By promoting responsible AI adoption and visibility, firms can protect sensitive assets while still empowering teams to leverage AI’s potential for improved diligence, operational efficiency, and investor engagement.
In conclusion, adopting a dynamic, continuous improvement strategy ensures that private capital market firms remain secure and competitive as they integrate AI technologies. CISOs who proactively evolve their cybersecurity strategies, incorporating robust governance, ongoing risk assessments, and agile response practices, will effectively safeguard their firms’ sensitive data in the ever-evolving AI landscape.
Talk to sales to learn more about Allvue’s front to back office solutions for the private capital markets, and how your firm can leverage secure AI solutions designed to drive scale and efficiency.
More About The Author
Frank Vesce
Chief Information Security Officer • Legal & Technology Risk Department
Frank has over 25 years of technology experience across several sectors including Financial, Insurance, and a Technology start-up from funding through IPO. Frank has a global perspective on driving growth and value creation. Prior to joining Allvue Systems as their CISO, Frank spent a combined 20 years at Goldman Sachs holding several senior global positions.
Frank is a Cyber Security Advisor to the Captain of the New York/ New Jersey Coast Guard and holds a Government Clearance. Frank has presented Cyber Security and Technology Risk at several Universities including Harvard, MIT, and NJ Institute of Technology. He has also presented at a few closed-door sessions at the NY Counter Terrorism Bureau and the FBI.
On a personal note, Frank is an advocate for Foster Care and other non-profits such as Year-Up. Representing Goldman Sachs, and on behalf of Casey Foster Care, Frank was asked to testify before Congress on the benefits of private sector firms working with non-profits such as Casey.
