Consider how much of a family office’s email and text message traffic contains sensitive information. Then consider that 42% of companies with annual revenue between $50 million and $1 billion experienced a data breach in 2020, according to the RSM US Middle Market Business Index survey. That percentage has increased each year, up from 4% in 2014 in the inaugural survey and up from 29% in 2019.
Protecting those lines of communication and the devices that utilize them reduces risks while enabling mobility for family members and office employees.
Solutions include encrypted email, mobile device management, virtual private networks (VPN) and dual-factor authentication for transactions.
A VPN secures connections and protects data, an especially valuable safeguard given how the pandemic accelerated the transition to working remotely. Dual-factor authentication is more secure than entering only one password, especially if the secondary authentication involves a separate device.
Document storage and retention
Transition to a virtual office is prompting family offices to examine how they store and retain financial records.
Maintaining an inventory of papers in a filing cabinet is rife with risks, and it requires personal attention that employees and advisors could better spend elsewhere.
Instead, a cloud-based storage solution is easier to access remotely, faster to search and more capable of protecting and backing up documents. Programs such as Microsoft SharePoint, OneDrive, TeamDocs and Collaborate can create controls for storing documents, accessing records and sharing data with different generations of the family and various third parties serving the family office.
Human capital management
Human resources are commonly under-resourced in family offices, and shortcomings can result in administrative and compliance problems.
Human resource information system technology can automate payroll processes, for example. Even if a family office is not so complex that it needs automated solutions for performance management or recruiting and onboarding employees, the efficiencies gained by eliminating transactions on paper could be valuable enough for a small staff shouldering a big to-do list.
Man’s best friend
Technology supports people within family offices by creating efficiencies and reducing risk. From investing to accounting to compliance, digital solutions are now able to improve each of a family office’s operational components.
“Most of the family office employees I speak with are devoted to making the family happy, but they don’t have the people, the systems or the know-how to do it,” Churchill says. “They’re often in a position where they can’t be successful, as they don’t have the tools to evolve with the family. That’s the challenge.”
Fortunately, it’s not an insurmountable one.
"middle" - Google News
March 12, 2021 at 11:30PM
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How Technology Supports People in Family Offices - Middle Market Growth
"middle" - Google News
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