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Key trends in Family Office Technology

An existential question with which family offices often struggle is "to innovate, or not to innovate?"; if the latter, they risk going the way of Blockbuster or Sears, and if the former, they face risks and the unknown.

Trend # 1. Single Family Offices are slower to adopt new technology than Multi-Family Offices.

While SFOs are more likely to select advanced technology for its ability to increase communication with their family members, it is moreso the MFOs who are looking for technology that can help them scale, states Seth Brotman, CEO of artificial intelligence software provider Canoe Intelligence.

Trend # 2. Technology should provide a frictionless experience.

There is a tremendous amount of friction around manually extracting and populating all the necessary data sources, especially related to alternative investments, notes Brotman. The purpose of innovation, therefore, should aim to reduce friction by providing things such as straight-through processing for marketable securities, daily book pricing on a T+1 basis, and leveraging artificial intelligence to reduce the effort needed for reconciliation.

Trend # 3. ESG is an emerging focus.

Investment in ESG (Environmental, Social, and Governance) is a growing trend- wealthy families are discovering that there's more to do with your money than just earning a return, noted Jonathan Hudacko, CEO of investment firm Just Invest. Social responsibility is extolled now more than ever in history.

With these trends in mind, remember that innovation isn't always synonymous with a 180 degree flip in process, operations, or culture; strategic innovation is leveraging the right technology to improve what you’re already doing well.

Source: Family Wealth Report, "Three Trends in Next Generation Family Office Technology"

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