Technology and the Family Office.


Technology and the Family Office.

It is said we are living in the midst of the fourth industrial revolution. That AI, robots, big data, the cloud and the ‘internet of things’ will change our lives in every way imaginable and many that are not.

So how should we, as families and business owners react to this changing technological landscape? How should we choose technology to communicate, make and execute decisions and run our interests more effectively?

Since the start of the century, in 20 short years, the way we interact with technology has changed beyond recognition effecting every part of our lives both at home and at work.

At the individual level, there is one piece of technology that has changed our lives more than any other. Our smartphone. In some ways this small, relatively inexpensive device, has come to represent what we expect from our interaction with technology. Access to real time data and information, seamlessly integrated into an experience that is intuitive and personal. The ability to communicate through voice, video, text and picture with people around the world instantly. A single window through which to access entertainment and information, to communicate and make decisions.

This ubiquitous device has created a level of expectation of what technology should be able to do in other aspects of our lives including business. This includes the family office environment where many are questioning how technology can help us do the things we to do. But do it better.

There is no ‘smartphone’ for the family office.

The danger of this expectation is that we place unrealistic demands on our technology infrastructure, or worse still, waste resource in investing in the wrong technologies in the hope they are the panacea to our current operational problems. There is no ‘smartphone’ for the family office. So, how do we choose the technology that is right for our family offices and businesses, and how do we ensure we get the best out of the technology that we invest in?

The challenge surrounding the identification, selection and operation of family office technology is exacerbated by the myriad of providers in the sector, claiming to solve all manner of problems. From consolidated reporting, to investment operations and risk analysis, to art curation and configurable inter-family communication and document storage. There are numerous platform and outsourced providers to choose from, many of which are excellent.

To help guide decisions surrounding the effective use of technology in family office operations it is useful to think about three core factors – your needs, data and integration.

Start with your strategic intent.

First and foremost, spending time really understanding your need is seldom wasted, but frequently overlooked. Start with your strategic intent. What do you want your office to provide your family, now and in the future? What activities do you need to conduct to achieve this intent? How are these activities currently conducted and where can you introduce efficiencies to execute these activities more effectively? Does technology have a role in introducing these efficiencies, or are there different ways of achieving a similar effect, such as through outsourcing?

This is not an exhaustive list, rather a guide to the types of analysis that can start to define the requirements of your family office – some of which may be matched by technological solutions. Remember, technology is a means to an end, not the end in itself.

If your data is not properly collected, organised and secured, the performance of any technology is going to be severely restricted.

Secondly, think about the data. It really is all about the data. If your data is not properly collected, organised and secured, the performance of any technology is going to be severely restricted. This is particularly true of investment data, where ensuring you can rely on the data provided by your custodians, your investment managers or your accountant is critical. Which data set should you rely on? Where are your ‘sources of truth’ that allow you to use the reporting, investment decision-making and risk analysis tools you need with confidence.

An effective system exists where the whole is greater than the sum of the individual parts.

Lastly, integration. An effective system exists where the whole is greater than the sum of the individual parts. New technologies used by a family office should integrate with existing tech already in place, the processes driving the family office and, most importantly, the people the office has been set up to serve; the family members themselves.

Ensuring this compatibility is crucial when designing the technological infrastructure that is suitable for what your family office needs now and moving forward.

Taking a considered approach to technology investment, along the lines highlighted above, can save time and money in the long run. More importantly it should ensure your family office invests in a technological infrastructure that is fit for purpose, agile and adapts as your needs change over time. Whilst, we may be some way from the smartphone-equivalent for the family office, with considered thought it is possible to get close.


This article was originally written by Point Group for the Global Family Office Community