How Technology and Instant Information Can Help Family Offices Achieve Their Goals and Grow Their Wealth
June 02, 2022
By: Varun Vig
Family offices as we traditionally know them have significantly transformed over the past decade. An increasing concentration of wealth held by families is rapidly fueling the tremendous growth in family offices. While the industry metrics are limited and vary widely, the family office community continues to grow in size and influence with a global footprint. Family offices differ substantially in their purpose, strategy, governance, investment policy, and risk management – each family office is different and has unique attributes.
One thing we all know is that family offices tend to operate like businesses, and they should be treated that way. Family offices are structures in various forms, but many single-family offices are structured like a typical fund with the exception that they invest their own money.
Family offices deal with a lot of personal information which is why they are at a significant risk of cyberattacks and privacy-related risks compared to other businesses. Recent statistics confirm that family offices are at a higher risk for targeted data breaches. The risk could be reputational risk or financial risk related to things like bank wire frauds.
Family offices face significant challenges when it comes to operating effectively. Successful operations require various kinds of information, including: financial data to support decision-making, portfolio data to confirm the effective oversight of assets, and continuous monitoring of processes to spot and mitigate risk and predict issues.
In today’s rapidly paced digital world, producing relevant information means that data must be collected and extracted from a pool of varied and sophisticated service providers and financial institutions. Technology plays a central and critical role in supporting this data analytics process for the ultimate decision making and effective planning.
Customized technology solutions provide several benefits to family offices:
- Offers flexibility to meet current needs and evolve as needs changeCreates a custom roadmap around people, processes and technology aligning with the family office’s strategic goals and objectives
- Provides transparency and better data-driven decision-making opportunities
- Assist with outsourcing strategy to free up family office resources to focus on growing the wealth and achieving the family office’s purposes, goals and objectives
It’s important to work with an expert in family office technology solutions who works with you to discuss specific needs and requirements. The technology to meet the family office needs and requirements can vary vastly from a single off-the-shelf product to a sophisticated high-powered engineered solution.