Online security is now on the same level as data integration as a top technology priority of family office advisors and managers, according to a study by the Family Office Exchange (FOX), a global network of family offices and their advisors.
Security and software solutions that integrate financial data across multiple functions were the top two concerns for the 130 family offices that responded to the FOX survey of 130 single-family and multifamily offices.
In a similar FOX study three years ago, data integration was the chief concern and security ranked in the top five. Each was named by 22 percent as the top challenge this year.
The sensitivity to security applies to both the data and communication of the data, with most participants (71 percent) opting to not send financial information to clients' mobile devices. In spite of these concerns, 56 percent of respondents expressed confidence in their security practices.
A growing awareness of security issues accounts for the increase in concern about the issue, according to FOX.
The survey also found that the desire for a reporting solution that aggregates data across such key functions such as investments, taxes, accounting and philanthropy remains a key challenge for family offices. Most (88 percent) rely on Excel to serve as the bridge between software packages, according to the survey.
In spite of security concerns, 46 percent of family offices currently use cloud technology, the study showed.
In the wake of national disasters such as Hurricane Sandy, 97 percent have or are developing a process for disaster recovery and business continuity.
Twenty-one percent family offices have a dedicated IT professional on staff and technology accounts for 5 percent of the average family office budget, according to the survey.