Don Previti, ACE IT Solutions’ Global Director of Business Development, was recently featured in Family Office Insights, a private invitation only, collaborative peer-to-peer community of single family offices, qualified investors and institutional investors.
In this Q & A, Don discusses the technology challenges family offices, and financial firms in general, face in the post-Covid Era.
Q. What are the key Technology & Cyber challenges facing Family Office firms in a Post COVID-19 Era?
A: It is easy to be distracted and overwhelmed by the range of technology available and the sheer pace of change. Covid and remote access have underscored the importance of a strong technology and cyber process that matches the risk profile of the firm aligns with the firms Business Goals and objectives. The SEC and OCIE are increasing its scrutiny on Cyber Security. Cybersecurity is recognized as the biggest non-investment risk to Family office firms.
According to Northern Trust’s 2020 Family Office Benchmarking Survey, Family offices are generally less regulated than traditional wealth and asset managers, and in these situations, it is not uncommon for Family Offices to have fewer formalized processes and procedures around data security and controls. These findings further support the very reasons cybercriminals pursue family offices. They go after entities with large sums of money that are perceived to have weak cybersecurity controls and operational process.
For our discussion, we will expand on why family offices should be more receptive to embrace new technologies and which emerging technology trends to look out for to protect your family name, capital, and reputation.
Q. What are the benefits for family offices embracing technology?
A: The benefits will vary for each family office; a common theme is better information for decision making and more proactive management to reduce risks. Technology can also improve interactions outside of the family office helping them work more efficiently with third parties. Working remotely from disparate home locations adds a higher degree of vulnerability and therefore increased focus on risk mitigation strategies.
Confidentiality & Privacy remains a priority and while it is always sensible to be careful about sharing access and data with third parties, family offices often find that vendors focused on this segment have superior security to themselves. While no firewall and security measures provide absolute assurance, typically technology providers work very hard to remain secure and deploy the latest tools and techniques for managing security risks. Because of this we are seeing more family organization be open to cloud platforms and all the benefits they have to offer.
Q. Why is there an increased focus on technology and Cloud integration by family offices?
Historically, the private wealth & family office firms have been slow to adopt technological change. Many still have legacy systems with outdated security features that are impeding performance and creating unnecessary risk.
Remote connection issues and technology troubleshooting will slow down productivity, and the move to secure, cloud-based applications can solve those problems. Unlike legacy systems that have a limited number of licenses available for access at a single time, web-based solutions have no such restrictions. Data updates in real time are another reason to move to new cloud-based technology. With efficiencies in turnaround time and reporting accuracy, family offices have information they need to make informed decisions faster than before.
Family offices are finding that new technologies can help free up their headcount to focus on activities that deliver the long-term strategy.
It is also important to remember that until recently, family offices were more hesitant to invest in technology because of the cost and complexity of implementing the software. However, there are now a growing number of bespoke family office Cloud/SaaS tools which are both more affordable and easier to implement.
Contact ACE IT Solutions at 646.558.6358 or firstname.lastname@example.org with your concerns about technology in the post-Covid Era.
About Family Office Insights
Don Pretivit and Warren Finkel will be speaking at a private Family Office Insights Webinar/Teleconference featuring ACE IT Solutions on Wednesday, April 21st, 2021 at 2:15pm-3:15pm EST. Family Office Insights is a private invitation only, collaborative peer-to-peer community of single family offices, qualified investors and institutional investors. Visit their website familyofficeinsights.com/ for more information.