The Family Office Insights Series
Digital Transformation of Family Office Operations, 2024
The latest edition of Deloitte Private’s Family Office Insights Series entitled, Digital Transformation of Family Office Operations, provides invaluable insights into family offices’ use of operational technology across their front, middle, and back office functions. As a notable 43% of family offices are developing or rolling out their technology strategy this year, this report is an invaluable resource, as it examines which areas of technology family offices are prioritizing their adoption of, which they are finding most beneficial in terms of improving efficiency, reducing costs, aiding in decision-making, and scaling-up their operations, and how they are leveraging artificial intelligence and data analytics to improve their functioning.
With nearly one in five family offices identifying inadequate investment in technology as a core family office risk, and nearly three-quarters admitting they are either underinvested or only moderately invested in the operational technology needed to run a modern business, now is the time many family offices are choosing to address their operational technology needs and risks to prepare for a brighter future.
This comprehensive report is informed by a global survey of 354 single family offices and 40 in-depth interviews with senior family office executives. The families represented hold an average wealth of US$3.8 billion and total estimated wealth of US$1.3 trillion, while the family offices have an average assets under management (AUM) of US$2.0 billion and total estimated AUM of over US$700 billion. This report has been designed to deliver an interactive experience which is accessible when opened in Adobe Acrobat and the report is downloaded to your computer.
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Key takeaways
A notable 43% of family offices are developing or rolling out a technology strategy this year. This comes as nearly one in five family offices (17%) identify inadequate investment in technology as a core family office risk, while nearly three-quarters admit they are either underinvested (34%) or only moderately invested (38%) in the operational technology needed to run a modern business.
Family offices’ number one focus is on utilizing technology to support their security and risk control processes, with 65% claiming moderate/extensive technology adoption, followed by technology to support their investment operations (49%), investments (47%), tax and wealth planning (35%), and client management activities (28%).
The most common types of technology family offices use are cloud-based applications/services (which 87% use), followed by virtual meetings (82%), mobile communication apps (71%), and identity and access management systems to safeguard one’s systems and data (61%).
Over half (55%) of family offices now use data analytics to a moderate or large extent in their investments, while 42% do so in their operations, to identify trends/patterns and support better quality decision-making.
As family offices see AI’s potential as a transformative technology, they are trying to grasp its future impact and how it can be operationally leveraged. Testing the water, over one in 10 family offices (12%) have begun to use AI-driven solutions to automate tasks, optimize portfolio management, enhance risk management, and more.
Family offices assert they are obtaining considerable value from their use of operational technologies that enhance controls/privacy and reduce risk (according to 38% of respondents), enable greater scalability/flexibility (30%), improve efficiency and reduce costs (30%), improve employee experience (29%), and enhance services to family members (25%). Those who claim to be moderate/extensive users of new technology are, on average, more satisfied with their systems than low-level adopters at 87% versus 66%.
