The Future of WealthTech – Part Two The Future of WealthTech – Part Two


The Future of WealthTech – Part Two

Part two of a three part series.

This is the second blog post in a series on the future of technology in the wealth management space. The following questions were part of a panel discussion from recent Family Wealth Alliance WealthTech Summit of which I was a part of on the future of wealth management in the technology space.

We hear a lot of about artificial intelligence (AI), blockchain and machine learning. How can family offices use this technology and what should firms be aware of?

There is lots of talk about artificial intelligence (AI) and machine learning. TV ads and movies present AI as something that will either transform humanity or ruin it. However, AI’s actual impact on family offices will be far less dramatic.

Attracting and retaining talent is one of the biggest challenges facing the industry today. Talent retention is especially important for family offices as they deal with sensitive information and prefer human capital over technology. The challenge of a tight job market with the growing complexity and increased expectations of family members results in a lot of stress on a firm’s operations and people. It is no longer sustainable for firms to throw bodies at problems.  This is where AI and machine learning can help.

Firms of all types need technology to create scale. To scale means freeing up staff from mundane and repetitive tasks.  It allows staff members to focus on higher value functions and to be more client facing. We all need to do more with less. This is where AI and machine learning will have its biggest impact in the short term. It will allow firms to create scale by automating mundane and repetitive tasks. For example, AI will be used to normalize alternative investment data and process high volume, low dollar recurring bills. Staff will be freed up from manually entering data and processing transactions to providing higher levels of analysis and spending more face time with clients.

Blockchain is another emerging technology that will revolutionize family offices. Today, Blockchain is often associated with cryptocurrency such as Bitcoin, but it is a concept that goes far beyond digital currencies. Blockchain refers to a decentralized, distributed digital ledger of record. It allows multiple systems to share information and to keep one version of the truth. It can apply to accounting information as well as other records such as documents and key processes.

All family office employees are knowledge employees. Often that knowledge is stuck in someone’s head versus codified in systems and processes. Jill Creager was also on the panel. Jill is the founder of iPaladin*, a digital family office management solution that uses blockchain technology to manage knowledge and workflow across disparate systems. Jill  described how one family office using their blockchain technology was able to onboard a new tax attorney within days versus months as she knew what tasks were in queue and where each task stood in terms of process and workflow.

Too often firms are overly reliant on the human blockchain. Sometimes these blockchains get sick, take a vacation or leave the firm. Employing technology can help manage the important tasks that family offices complete in an efficient and consistent manner. All too often this information is stuck in email and in people’s head. Jill’s firm estimates that employees will spend 40% of their time searching for the latest and most complete information.

The amount of information and the complexity of tasks require firms today to look at how firms can better leverage technology and create operational alpha.

For Part One, click here.

For Part Three, click here.


*iPaladin is not affiliated with Datafaction.