Part II will review the best ways for family offices to work with software vendors and will highlight fintech demos from leading vendors. FWR's US correspondent was there to report on the dialog.
 

When it comes to adopting artificial intelligence, family offices are starting from behind, according to Murali Nadarajah, CIO of Eton Solutions. “Very few family offices  have adopted AI,” Nadarajah said. Indeed, “It’s not unusual to see family offices use manual punch cards,” said Leanne Haupt, head of family offices for Corient. 

A big part of the problem is that 75 per cent of fintech software is not designed for family offices, said Alexandre Lin, co-founder and CEO of software firm SumIt. As result, QuickBooks and Excel are the most widely used software products used by family offices, according to Lin and other fintech executives.

But within five years, family offices won’t rely on spreadsheets, manual workflows, or delayed reporting, forum keynote speaker Alex Lee, founder and CEO of fintech accounting firm Truewind maintained. Instead, artificial intelligence will always be on to transform family office accounting from a back-office function into what Lee called a “strategic financial engine.”

Pros and cons 
Speeding autonomous operations is AI’s biggest benefit for family offices, Lee said. The new technology scored highest on providing operational efficiency, timeliness and multi-asset complexity, he reported, and lowest on trust and continuity.

Artificial intelligence also helps family offices rapidly process key data points, administrative tasks and statements, documents, capital accounts and tax data said Nadarajah. Processing K1 statements using AI saved his company 200 hours of work a year, Nadarajah estimated. As a result, staff  were able convert their time into “higher value” work, he said.

But artificial intelligence “can’t replace human judgement,” cautioned Corient’s Haupt. What’s more, family offices are at risk of losing “authenticity” if they rely too much on AI for written communication, warned Paul Freedland, a PwC partner heading the firm’s Wealth Compass unit. “Our value is where AI ends.” 

For all the caveats, family offices can’t ignore artificial intelligence’s ability to end the “document drudgery” of repetitive tasks, said Simran Sandhu, at Citco Fund Services. What’s more, AI’s  ability to put an analytical engine on top of foundational data will increasingly allow it to make “intelligent investment decisions” and construct portfolios, added Charles Anselm, co-founder and CEO of Osyte. 

Adoption best practices
So, what should family offices which are considering adopting AI do?

Know the office’s workflow before coming up with a solution, Lin counseled. Understand what the end state looks like and “make sure end users have buy-in,” added Ben Collins, senior director of growth marketing for Sage Intacct. One way to involve end users, said Corient’s Haupt, is by conducting focus groups among the staff to discover particular pain points.

Start using AI on a project  of “reasonable size,” Nadarajah counseled. Too often, family offices are “too ambitious,” he said. They also need to remember that AI accuracy can vary between 90 and 99 per cent, and must be carefully monitored by humans. “Think of AI as a platform, not a solution,” he urged the audience.

Design is critical for family offices considering implementing AI, Lin and consultant Wendy McCoy stressed. After gathering as much information as possible, family offices should identify the biggest pain points, they said.

It’s also useful for family offices to talk to their peers and compare notes before getting started. But they need to recognize that family offices will have different operating requirements and comparisons may not be apples to apples, cautioned Josh Kanter, founder and CEO of software firm leaflplanner.

Once the decision to implement has been made, “staying in front of the learning curve is super important,” said Jeremy Sisselman, founder and CEO of Bondway.ai. As an example, he cited Deep Research, a new feature of Chat GPT that displays  the reasoning behind its answers.

Sisselman also urged new AI users to improve their proficiency with using prompts when asking AI software questions. “Prompts are critical to getting the most out of artificial intelligence,” he said. “And practice makes perfect.”