The Eton Solutions platform, AtlasFive®, is a game-changing, comprehensive enterprise management system for family offices. It is a cloud-native application suite which facilities end to end family office management and has capabilities that include entity management, data aggregation, investment reporting, general ledger accounting, partnership accounting, transaction initiation and document management.
We all know that data equals knowledge. It provides a way to measure and is a basis for decision-making. In any organization, knowledge enables individuals to respond to challenges before they become full-blown crises.
Data allows organizations to measure the effectiveness of a given strategy and determine the cause of problems. Effective data collection and analysis will enable you to direct scarce resources where they are needed most. In family offices, data helps you explain (both good and bad) decisions to your family stakeholders. It allows you to establish baselines, benchmarks, and goals to keep moving forward. But perhaps the most significant impact of data is that it enables you to know what you are doing well, allowing you to replicate areas of strength across the office. Data analysis will support you in identifying high-performing programs, service areas, and people. This is the nexus, the impact of data: the connection where data drives positive action.
A New Purpose for Family Office Data: Beyond Historical Reporting
The focus of data in the typical family office has been on creating historical reports, but it should be about much more.
At least part of the reason historical reporting has been the focus in family offices relates to the technology being used. Using technology platforms that are not integrated and consist of numerous functional silos leads to scattered data across multiple systems. Because the data from those disparate systems must be reconciled and normalized before it can be used, typically by using spreadsheets, family offices spend an inordinate amount of time generating these historical reports. There’s too little time left to realize the full potential of insights buried in the data.
As family offices embrace technological advancements, staff time spent on historical reporting will decrease, and employees will be empowered to use the data in new ways, yielding deeper analysis. Driven by new thinking, new technology capabilities, and the move toward digital business interactions, data usage is changing radically in most organizations. And this is impacting the family office world. Furthermore, outsourcing historical reporting is becoming commonplace in family offices, which offloads this burden from employees as well.
Soon (or even now!), family offices will need to consider data as a “living” thing. Frozen, time-bound reports showing information from a month ago won’t support family members’ goals. Data as an experience is a new concept for family offices, but growing demand from families for relevant information to be delivered rapidly anywhere, anytime across devices will force offices to look at improving this vital customer experience. This will be one crucial area where the family office of the future will demonstrate value.
The technology is available and ready for family offices to embrace. Using data to train software applications through machine learning (ML) or artificial intelligence (AI) is already a mainstream method to solve complex business problems, automate mundane tasks, and facilitate efficiency. However, the ability to act on data-based insights in real-time will be a change agent in family offices. It will be what wealth owners demand, especially as younger generations rise. The mindset must change to view data as a strategic asset for the office. The historical look back is no longer acceptable.
When you think of appropriate technology for a successful data-first approach in a family office, transparency, control, and a single data source need to be priorities. The latter is essential to implementing any type of AI or ML—without data reconciled, standardized, and in one place, AI and ML can never be achieved. Data, and family offices’ approach to it, can have a dynamic and measurable impact on critical family office processes and workflows when embedded in an integrated technology platform. These changes can only come by family offices realizing the value in their data. The right technology can be a platform for moving forward, rather than just a historical tome.
Start using your clients’ data to look forward – not backward – and reimagine the value your office can achieve.