Family offices worldwide are accelerating their digital transformation to meet the evolving demands of wealth management in today’s complex market landscape, according to Deloitte Private‘s survey.

The firm said in its “Family Office Insights Series: Digital Transformation of Family Office Operations” report that 43 percent of family offices are developing or rolling out technology strategies that emphasize security and risk control.

Meanwhile, 17 percent view inadequate investment in technology as a core risk, underscoring the importance of digital adoption across the sector.

Based on a survey of 354 single family offices and in-depth interviews with 40 senior executives, the global report examines how family offices use operational technology across front, middle and back-office functions, and the extent to which this drives efficiency and strategic value.

Despite overseeing an average of $2 billion in asset under management (AUM), these family offices operate with lean teams of around 15 staff to manage complex initiatives, often without access to institutional-scale infrastructure used by larger financial institutions.

“Family offices have been a hot topic drawing increasing interest in Hong Kong, thanks to the government’s announcement of policy measures to strengthen the SAR as a global family office hub in 2023,

“A growing number of wealthy families are establishing family offices in Hong Kong, with an accompanying influx of high-net-worth individuals and capital under the Capital Investment Entrant Scheme,” said Anthony Lau, Deloitte Private Hong Kong leader.

“Despite this expansion in the family office space, digital transformation seems to be less attended to, as around 70 percent of family offices admit they are either underinvested or only moderately invested in the operational technology needed to run a modern business, which explains the sharpened focus on technology noted in our report,

“As more family offices embrace technology to enhance wealth management, risk handling and client relationships, their competitiveness will depend on how well they integrate innovation while preserving the core values of discretion and personalized services,” he added.

The report showed that integrating technology to support security and risk control is the top priority for family offices, with 65 percent reporting moderate to extensive adoption.

Nearly half (49 percent) use technology for investment operations, while 35 percent focus on improving tax and wealth planning and 28 percent emphasize client management activities.

“Technology can link portfolio management with tax and fund accounting, improving performance analytics and reporting,

“A centralized system offers a full lifecycle view to identify investment opportunities and strengthen cybersecurity,” said Allen Wong, Hong Kong consulting leader at Deloitte China.

“Although family offices commonly implement technology upgrades in an ad hoc manner, a broader technology strategy ensures seamless integration, scalability, and efficiency across business functions,” he added.

Despite advances in technology, family offices still struggle to find tailored systems that meet their requirements, said the report.

Suitable service providers are not always accessible due to cost or limited functionality.

Identifying a simple, effective financial reporting system to support tax and compliance is a key challenge.

Moreover, some struggle to find integrated information technology (IT) providers suited to their specialized operations.

“Family offices are modernizing and enhancing their digital capabilities quickly—but the ones who do it right will take a holistic view of the process,

“High-quality data needs to be integrated into every part of the transformation, laying the foundation for the future generations of analytics, operations and AI,” said SC Yau, Asia Pacific (APAC) head of market specialists at Bloomberg.

It is noted that cloud-based applications and services are the most common technologies used by family offices, with 87 percent relying on these for data storage and software as a service (SaaS).

Virtual meeting tools (82 percent) and mobile communication apps (71 percent) follow close behind, supporting remote collaboration.

Additionally, 61 percent deploy identity and access management to safeguard systems and data, and 50 percent use on-premise applications and services.

“Although essential technologies form the backbone of operations, advanced solutions are gaining traction,

“55 percent of family offices use data analytics to identify trends and patterns for better decision- making, while 12 percent adopt AI for task automation, portfolio optimization and risk management,” added Wong.

“Like other businesses, many family offices are still evaluating AI’s full potential, so adoption remains limited,

“However, there are substantial opportunities for family offices to use AI to enhance client intelligence, personalize content, automate rebalancing and improve self-service capabilities,” he noted.

For family offices embarking on digital transformation, success lies in a strategic approach, said the report.

Rather than focusing solely on technology, it noted the first step should be defining the core challenges they need to solve.

It also highlighted that selecting the right technology, managing vendors effectively and establishing a clear data conversion plan are critical steps.

A well-structured timeline is equally important, ensuring clear milestones and adequate resourcing to keep the process on track and prevent delays, it added.

“As digital transformation accelerates, family offices that effectively harness technology will be best positioned for success,” said Wong.

“Whichever technology they choose to adopt, the focus should be on seamless integration to improve efficiency, drive better decision-making and boost client engagement,

“Ultimately, the ability to reimagine wealth management, risk strategies and client relationships through technology will determine family offices’ success in the digital age,” he concluded.

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