A decade ago, only a thousand family offices existed across the globe. Today, the number of family offices is 10x that number, thanks to global economic changes. In the space of 10 years, family offices have evolved from being tiny agencies that managed single-family finances into large, sophisticated firms that can take on multiple clients and manage assets worth $500 million and more.
Apart from the shift in what family offices have to offer, there is also a shift in how they operate. There is now more focus on accessibility to information, real-time analytics, and delivering customized solutions. The result is the digital transformation of family offices. Though family offices have been operating within their ecosystems, they must now adapt to modern technology such as artificial intelligence and machine learning if they do not want to become extinct. 87% of respondents to UBS Global Report agree that artificial intelligence will be the next biggest disruptive force in global business. Powered by innovative tech family offices will be able to offer more holistic solutions.
Artificial intelligence and machine learning are not in their infancy. It would be safe to say that no industry is untouched by artificial intelligence. Family offices are no exception. As the number of uses of AI increases, family offices can proactively explore various opportunities that AI presents. As mentioned earlier, family offices that don’t stay ahead of the game will get outdated and find it difficult to create any kind of revenue impact.
Considering the number use cases of AI, here are some of the use cases that family offices can consider.
One of the biggest benefits of AI is productivity. But how does this play out for family offices considering their services are highly customized to meet their clients’ requirements. Well, if AI is implemented strategically, it can dramatically improve productivity.
AI can be used to automate repetitive or routine tasks such. This can free up employee time, lower costs, and promote better outcomes. For example, AI can be used to process unstructured data based on pre-determined rules. Other tasks include filing, forwarding processed data for review, notifying respective teams about issues that require attention.
In today’s digital world, everything is driven by data. Family offices are no different. To manage investment portfolios, family offices require access to high-level information, advanced metrics, predictive analytics, and data. This is something that traditional data tools cannot offer. However, modern AI tools like Brainalyzed Insight for family offices uses machine learning and artificial swarm intelligence to enable data pre-processing to derive in-depth insights. These insights are then used to configure or rebalance portfolios effectively.
As mentioned earlier, data is important to run a business effectively and profitably. For family offices that handle multiple clients, it is essential to create, structure, and store multi-generational wealth-related information. The biggest challenge with storing information is that it should be easy to sort and reorganize the data in whichever way it is required. This is where AI can be used.
Advanced portfolio management tools use machine learning capabilities to understand and learn from data and various factors that affect family offices. When this is paired with big data, advanced machine learning tools can help family offices identify potential market trends and make effective decisions that drive profitability for themselves and their clients. AI can be used to analyze securities and investment decisions to reduce errors and make accurate predictions.
Online businesses are vulnerable to cyberattacks. Nearly 20% of family offices have reported experiencing some kind of cyberattack or the other and consider it one of the top challenges to solve. The most common forms of attacks are phishing (76%), malware (33%), and social engineering (33%).
While traditional cybersecurity tools exist, they cannot quite keep up with the expanding volume of malware and malicious attacks that family offices encounter. Conventional cybersecurity tools aren’t enough. However, artificial intelligence can help thwart cyberattacks by using complex algorithms to recognize threat-prone behavior. It can also provide actionable insights and help fight cybercrime.
Brainalyzed Insight is an artificial swarm intelligence platform that helps family offices solve some of its key challenges such as
Brainalyzed Insight enables family offices to thrive with two of its product offerings:
Some of the benefits of using Brainalyzed Insight for family offices include:
A lot of answers to questions about trade recommendations depend on data. To derive insights from data is no easy task. Family offices today, tend to rely on traditional data analytics for insights which negatively affects their prediction accuracy and bottom line. Based on self-reported returns, family offices’ overall investment performance fell over the last year, with the average portfolio globally returning 5.4%.
Brainalyzed Insight is the perfect solution to this problem. It can sift through, structure, and analyze data in a matter of minutes and provide accurate insights and predictions regarding your investments.
As a family office and a wealth management firm, it is important that to generate alpha – to generate a higher return than what’s expected, in the long run. It is pretty much the ideal goal of any wealth manager. To do so, you need to go through data and gather insights. We know by now that the quantity of data accessible today is constantly growing. It’s humanly impossible to keep up with this kind of data growth and draw insights out of it.
That’s where Brainalyzed Insight can help you – to create alpha. You can not only quickly skim through data and find the insights you need to increase your opportunity to generate alpha.
Most family offices are still inclined towards legacy systems and methods of risk analysis. As mentioned earlier, it is impossible to keep up with the growing volume of data. With Brainalyzed Insight, family offices can identify known and unknown risks by automating data analysis.
Operational and investment costs take a toll on revenue. The culprit is data. The complexity and ever-growing data become blockers for the growth of revenue for family offices. Since Brainalyzed Insight’s architecture is built in the cloud, it enables an agile operating model for family offices. When this is paired with quick data processing, it results in reduced operational costs and powers innovation.
Family offices currently manage a sizeable chunk of the wealth of the world’s billionaires. Though this is as strong indication that family offices are trusted to implement only the best practices in trading or managing these funds, research shows that there is potential for family offices to handle funds better. This can happen when family offices fully embrace digitization and the opportunities that come with it.