“Family offices are highly

primitivewhen it comes to technology. They operate off the back of spreadsheets and lever-arch folders, with papers, quite literally, scattered around theworld,” says Mr Console-Verma, a former investment bankerwhose family has run its ownoffice for decades. He set up his fintech business at the end of 2019, with the issues exposed by the pandemic accelerating his firm’s expansion. “The biggest issue family offices

face is that they are constantly firefighting and always operating on the back foot. But the pandemic has made them realise they have got to be proactive.” With markets moving very quickly, they need to be able to run portfolio scenarios, monitoring the effect of exposures on portfolio behaviour. The increased risk of sudden

family deaths has also becomea key concern, triggered by Covid- 19. 1fsWealth’s platform offers a succession-planningmodulewhich allows families to record all their assets and documentation, as well as the current will, with the system automatically sending an alert to prompt the patriarch to update it. Younger family members are

particularly engaged with the platform’s ESGmodule,which enables them to build sustainable portfolios in line with their values. Its philanthropymodule,which allows users to monitor the impact of their giving, has also been popular. The “genuine shift” towards

technology is likely to continue in the future, believes Mr Console- Verma. The cost of not transforming digitallywould imply greater inefficiency and cost burden. “Without a proper technology platform, familiesmay run the risk that they do not even knowwhich

assets they own,” he says, adding thatmany families do not have a full inventory.

CYBERSECURITY Oneof the greatestchallenges faced byfamily offices hasbeendealing with threats to cyber security, states BillWoodson,headofwealthadvisory andfamily office services at private bankBostonPrivate. “Familiesdonotappreciate

justhowmuchat risk they are, so theydon’t invest asmuchtimeand effort intoprotectingagainst cyber intrusion,”hesays. Family offices tendto believe that

anonymity,whichthey spendmuch timeandefforts to achieve, isgoingto protectthemagainst targetedcyber attacks,headds.Asaresult, theymay install cyber protocols, but theydonot educate theiremployeesonhowto engage.“Thegreatest risk for families andtheir businesses is notwhether theyhaveadoptedtheappropriate technology, butwhether they train theiremployees or familymembers properly, as this iswheremostfrauds happen,”hesays, explainingthat technology vendors should also offer consultancyandeducation services. TheCovid-19pandemichas driven

arapid acceleration of cyber crime. More thanaquarter (26 per cent) of family officeshave sufferedacyber attack,mostofwhichhappened within the past 12months, according to arecent survey conductedby BostonPrivateon200 family office executives at single-andmulti-family offices, primarily in theUS. Of these family offices, 57 per cent

see cyber risks asamajorchallenge (see Fig1). Threats comefromall directions, includingphishing, data theftandremoteworking. Historically, cyber security in family offices has focusedonfinancesand makingsuremoney is not transferred


Family related risks Cyber risk

Investment risks

Reputational risks Financial risks

Family office staff working remotely Employment related/insider risks Operational risks

0102030405060 Per cent

Source: Boston Private

mistakenly or fraudulently. But accordingtoarecentEYreport, as information hasmovedto the cloud andsocial media, “thewalls of these businesseshave expanded, opening manymore opportunities for attack”.

GREATERENGAGEMENT Onesilver lining of thepandemic is that digital communication, if done properlyandwiththe right tools, fosters andimproves engagement of familymembers,whichis the driving force of family business success. “Engagement keeps thefamily

connectedandthat connectivity is often foundin themost successful multigenerational family,where the family has shared values, approaches andhistory,” explainsMrWoodson. Achieving connectivity through

technology not only enables reaching familymembers across the globe, but also encourages dialogue with the younger generation,whichismore comfortable using technology to communicate. Bringing families together virtually

is currentlymuchmore realistic thanphysically, addsMrWoodson. “Itmakes itmucheasier to achieve educational or communication objectives in areas suchas investment management andphilanthropy,and facilitates making important family or business decisions.”


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