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Family Offices Mull Cyber-Security, Cryptos, Upgrades - Conference

Tom Burroughes, Group Editor , April 6, 2018


How best to choose technology upgrades? What can be done to beat computer hackers and is the hype around blockchain and crypto-currencies justified? These were some of the technology issues aired at a recent FWR conference in New York City.

Third panel

The third panel featured Sonny Saksena, chief investment officer and MD of Maihar and Rik Willard, founder and MD, Agentic Group, and CEO of Global Blockchain Technologies. This panel was chaired by Tom Burroughes, group editor, Family Wealth Report. This panel’s theme was Seeing Beyond the Hype Surrounding New Technologies.

Willard talked about the rise of crypto-currencies of different types and how, at a time when confidence has been shaken in conventional government (“fiat”) money, such innovations were finding a ready audience. “It’s a massive opportunity,” he said. A world dominated by large, government currency systems in place for over a 100 years is being challenged, he said.

Saksena cautioned that central banks retain “ultimate control” on the monetary system.  CB confidence is high after preventing 1920s style great depression following the Great Financial Crises. The debate about crypto currencies and associated systems is taking place against a background of worries about economic viability, AML/KYC, governance, evolving regulation/laws, cyber-security and fraud. 

Willard, asked about blockchain technology that underpins crypto-currencies such as bitcoin, pointed out the use of such tech in areas as diverse as communication and audit of medical information, legal documents and intellectual property rights. Through blockchain technology, these applications have the ability to create new forms of peer-to-peer and “C2B” value, such as primary ownership of one’s own medical records and leveraging that ownership to create new personal revenue streams.

Saksena said there are limitations to crypto-currency and associated technologies: “Soon the world will find out that it is very hard for majority of these companies to succeed in their current form. There are commercial viability, management integrity, platform scalability and corporate governance issues. It is in the interests of central banks and of the IMF to control the monetary system and the medium of exchange.  Regulators across the world are paying attention and enforcement actions are increasing. ”

The panel also discussed the promise and potential threat of artificial intelligence. “It is easy to make mistakes with AI,” Willard said. Saksena, addressing automation developments in financial services, added: “Large family office investors don’t like to talk to a robot.”

Fourth panel

The fourth panel featured Martin Hartley, chief operating officer, PURE; Joe Levy, chief revenue officer, Rubica; Theresa Pratt, chief information security officer, Market Street Trust; the chair was Thomas J Demayo, principal, cyber-risk management, PKF O’Connor Davies. The panel was entitled Cybersecurity and the High Net Worth Family.

Levy started the discussion by noting that with many firms and business owners, the vulnerability starts when such a person is at home, rather than in the office. PURE’s Hartley agreed: “Cyber-security in the work environment is far higher than at home.”

Pratt said the unwelcome news for people is that the bad guys have the lead; it makes sense to assume that breaches will happen and to have a plan and set of processes to deal with them. “You cannot do enough training, you just can’t.”

Hartley argued: “There are steps you can take that will take you out of the limelight…..the situation gets very different if you are being deliberately targeted.”

There was discussion on the panel about ideas such as how organizations should disclose to the public if there have been breaches. One problem, panelists agreed, is that breaches might not be detected for months.

Alongside the panels were a number of presentations: SS&C GlobeOp Private Capital Group, talking about how this firm serves family offices; EY on recent tax changes in the US and implications for clients, and Mercury iFunds, addressing science and art in constructing alternative portfolios.

The conference also featured a keynote address by Peter J Scott, a futurist author who spoke about the threats and opportunities from the rise of artificial intelligence.

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