Technology is infiltrating nearly every industry and at a stunning speed, we’ve yet to experience. The financial industry is no exception. Keeping up with financial and technology advancements is crucial for the family office firm as it seeks to expand holdings, grow assets, and keep private data safe. In this article, we’ll discuss the four primary ways that technology can bolster financial investments, as well as the ways it can derail strategies.
One of the biggest ways that technology has positively affected finances is the access to better, real-time data. This leads to more informed decision-making and the ability to be more proactive, through tracking and mitigating risks across the portfolio. Real-time data combined with cloud and Saas (software as a solution) tools then aggregates performance, exposures, and risks into thorough reports.
One step further is robotic process automation (RPA). By setting rules, the automation can perform repeatable tasks at a much faster rate than a human. Examples of this can be seen in form population and account reconciliation. When paired with artificial intelligence, the capabilities expand to learned data gathering, data entry, and analytics. Timely tax forms can be filled out in a flash.
In a recent survey, nearly 60% of financial firms plan to increase automation through RPA and AI. Increasing operational efficiencies leads to a better and more seamless client experience. What would once take hours and many members of a family office can now be automated, freeing up more time to focus on activities that contribute to the office’s long-term strategy.
Financial and technology partnerships exist beyond the portfolio. As technology bridges a gap in communication between the family office members and third parties. An example of this is the Google suite of products. Documents, spreadsheets, contracts, and more can be easily shared (and protected) while encouraging collaboration. In fact, commenting, tagging, and assigning within documents helps to solicit answers and feedback more efficiently, leading to a smoother workflow. And since changes are made in real-time but can be reverted, this then replaces the multiple versions of documents and massive files taking up valuable hard drive space.
Staying Secure and Relevant
Advancements in technology that enable storing and retrieving data in real-time also attract cybercriminals. Privacy is always a top priority when sharing sensitive data, so it’s important to be selective in the software and third-party vendors used with family offices. The good news is there are plenty of vendors in this arena that lead by example with standout security measures. By working with these vendors to combat cybersecurity, family offices can stay on top of the latest threats, deploy innovative tools, and implement a system of checks and balances. Regular spot checks and audits test and improve the systems, lending to the strongest possible data security.
4 Ways to Leverage a Financial and Technology Strategy
Stableford takes advantage of technology in four key ways that benefit both clients and the integrity of the firm.
- Implement cost-effective cloud and/or Saas tools to automate data delivery and reporting.
- Develop complementary partnerships that boost the deliverables of your family office.
- Identify and investigate new and emerging technologies that will enhance services while staying relevant, such as with cyber security.
- Create a strong investment firm culture and mold the next generation of leaders
The greatest pitfall in adopting new technology is not staying objective. Not every technology platform or tool will help a family office and it’s easy to get distracted by technology trends and shiny new software that may not help you achieve your goals. For a family office to get the most from technology, planning ahead and staying focused on the overarching strategy will reduce surprises and costs in the long run. To do this, apply a couple of guidance questions when facing new technology.
- What challenges does this solve?
- How will this help the family office be better, faster, or safer?
- What are the potential risks or downsides to implementation?
There are pros and cons to every tech tool, so research and a clear, objective perspective should narrow down the field.
From Clients to Firm Culture
Technology can be viewed as a disruption or an opportunity. Family offices that are prepared for the digital transformation are then in a prime position to leverage investments, adapt, and “meet the moment.”
Leveraging technology to enhance investments and returns is a key philosophy in the Stableford Way. Continuous innovation and technology allow for more transparency with our clients and more openness amongst our leadership. We make it easy for clients to communicate with us and a priority for us to communicate with clients.
It’s important to keep in mind that no matter how advanced the technology is, it can’t fix bad data or broken processes. Strong client relationships and a unique investment philosophy laid the foundation to leverage a financial and technology strategy for a flourishing family office.
Are you using leveraging technology as much as possible to benefit your investments, or are the trends overwhelming and pushing you away from your strategy? Contact Stableford Capital online for a complimentary 15-minute consultation or call 480.493.2300.