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3 Best Practices When Integrating Family Office Technology

Date:
Publish Date Feb 22 2023

Entole is transforming the Family Office Industry, one family at a time, through increased transparency and interoperability for wealth owners and their trusted advisors.

Every day, technology becomes a greater part of our lives. Everywhere we look, computers and technology are at work: the phones in our pockets, our watches, the wireless speakers that connect to Spotify, the servers that power our accounting software, digitized thermostats, agricultural equipment that measures temperature and humidity, and industrial control systems for energy and water supplies.

When we look at the technology in our lives, solutions that make things simple usually do so by integrating multiple pieces of technology together. Here we will explore the role of integration, an example of how the complex can simplify our lives, and three best practices in integrating technology together inside of a Family Office.

Technology Integration in Family Offices

Integration is an essential part to experiencing technology that works well. When considering its application to the Family Office industry, well-built integrations can improve many facets of a Family Office’s operations, such as the following:

  • Improve user experience,
  • Automate activities,
  • Streamline cross-organizational collaboration,
  • Provide increased transparency,
  • And reduce the chance of manual errors.

One vital point to consider in planning is that as technology in and outside of the Family Office space evolves, expectations from wealth owners and team members increase. These result in continually growing expectations from users to achieve the same perceived quality of experience. This means that finding the right technology partners to drive a continual improvement in experience is essential.

Integration in Action: How Technology Integration Streamlines a Car Drive

Every day, millions of people step into a car and open Google Maps to plan their route. Nostalgia aside, this is universally considered a better experience than just having a digital version of a map. Why?

A digital map is an early form of digitization that just offers a new medium to showing or sharing information. In contrast, a modern navigation system leverages deep integrations and automation to streamline your experience. For example, your location is identified by using a GPS technology that is integrated with your navigation system. This shows your location in real-time on the map.

Additionally, your smartphone integrates with Google’s cloud servers to find a route to your chosen destination. Behind the scenes, the servers integrate with thousands of devices to predict traffic and suggest routes. The servers then return this information to your smartphone, allowing you to select the route you’d like to take. As you drive, using the same integrations, traffic data is provided with real-time updates to your smartphone about potential delays and alternate routes.

Throughout the whole trip, you can use one application to manage guiding you from your starting location to your end destination. Numerous integrations work behind the scenes to provide an experience that we could only dream of 20 years ago.

Best Practice 1: Ensure That Integration Is Part of the DNA of the Technology Offering

Not every technology is built to integrate and not all integrations are built the same. Part of selecting a good technology partner is ensuring that they have a plan about how their solution will interconnect with other appropriate solutions. Some key questions to ask about a technology solution are the following:

  • Does it support integrations to third parties?
  • Does it support integrations to the software I use or want to use?
  • What is the level of effort required to utilize the desired integrations?
  • What does it take to maintain the integrations?
  • Who maintains the integrations?
  • What happens if something goes wrong?
  • Does this solution support standards-based APIs (Application Programming Interfaces) in case I want to change or add new software later?

Best Practice 2: Select Technology Partners That Align with Your Goals and Objectives

Understanding why you are doing something is the starting point to achieving results. Outlining clear goals and objectives will help ensure that the right technology is selected to work towards these goals and objectives. This will also frame context for any maintenance or future optimization that needs to be done. The goals and objectives guide the activities around technology to create value in your Family Office, and ultimately, the family members served. Using these goals and objectives will help you more clearly identify who will make a good technology partner. The following are two example goals:

  • Example Goal #1: Maximize operational efficiency with technology. To support this, you will want to find technology partners that have modern technology stacks and have implemented a culture of innovation.
  • Example Goal #2: Simplify the technology points of contact through a trusted consultant. To achieve this, a Family Office should look for technology partners that have a defined partner ecosystem for other technology consultants.

Best Practice 3: Maintain Data Security and Privacy

Each time a new technology and/or vendor is selected, it is imperative to ensure that appropriate controls and safeguards are in place to secure your Family Office’s information. Five key actions to take are to:

  • Perform a vendor due diligence process to ensure appropriate safeguards, controls, and appropriate data privacy protections are in place.
  • Ensure that appropriate controls are in place to protect data in transit and at rest.
  • Limit access to sensitive information to only the appropriate parties.
  • Include confidentiality and data protection clauses in your contracts.
  • Review to ensure that any applicable regulations to your organization are followed, such as SEC Cybersecurity Risk Management rules or the Insurance Data Security Model Law.                                                                           

The importance of integrated technology continues to grow both in and outside of the Family Office space. We recommend three best practices surrounding technology integration in your Family Office. First, disciplined integration is part of the DNA of the technology partners you engage. Second, that you clearly identify your Family Office’s goals and objectives and ensure that you have the right partners to support them. And third, that security and privacy are maintained with the addition of a new technology offering to your ecosystem. By following these three best practices, you will improve your Family Office’s user experience for both wealth owners and team members and select more effective technology in your Family Office.