Technology and the family office

How family offices are using technology to optimise their operations and performance.

Our research on Australian Family Offices, written in collaboration with The Table Club, looks at the role of Technology in the family office.

Family Offices have undergone a rapid evolution in recent years as they seek to adapt to the changing needs and expectations of their sponsor families and face new challenges and opportunities.

This report explores how family offices are using technology to optimise their operations and performance – from Excel to AI and everything in between.

To compete effectively for talent and resources in the future Family Offices need to think strategically about their tech strategy but:

• Most Family Offices have fewer than 5 employees.
• 33% are not measuring the financial benefits of technology use.
• Only 8% have started to use AI within the Family Office, with 46% examining potential use cases.
• Only 4% are using bespoke software; most rely on a combination of solutions. 

• Fit for purpose – Technology is essential for efficient and effective service delivery, but family offices need to take care to find the right fit for their problems.
• Planning and strategy – The role of technology in family offices requires careful planning before acquisition and implementation to understand the needs of the family office.
• Outsourcing – There is an increasing need for family office professionals to manage third-party outsourced service providers and to identify trusted independent advisers.
• Innovation – The skill set that designed ERP systems for operating businesses does not necessarily correspond to successful outcomes inside the family office. 
• Partnerships and performance – The “professionalisation” of the family office sector requires a full understanding of the capacity and capability of technology to drive out-performance – and the need to identify skilled partners.

• User audience – Technology utilisation and adoption is driven by those responsible for producing reports rather than those that use the data.
• Efficiency achievements – Technology drives efficiency and productivity, with 84% of family offices now relying heavily on technology.
• Increased use – The use of technology in family offices has increased five-fold in the past three years.
• Cloud vs AI – Cloud-based data storage is now nearly universally applied, but only 8% of family offices have started using generative AI.

• No ‘silver bullet’ – there is no single technology solution that would be capable of meeting the needs of all family offices or all of a family offices needs 
• Be flexible – Focus on what should be ‘insourced’ and ‘outsourced’ it pays to be flexible as to choices and remember to accept adaptation via the use of the Cloud 
• Planning – Make sure that all the users of technology, specifically the investment management team, are consulted as to their needs and the benefits they are looking to obtain
• Ownership – Appoint an ‘internal’ owner of the technology project or ‘outsource’ to a third party 
• Technology benefits – Family offices must embrace the benefits of technology, including AI to bridge the gap between available resources and expertise.