Reimagining Family Office Cybersecurity and IT Excellence
November 10, 2021
If your family office is still using on-premises IT infrastructure, such as in-house servers running your applications, you probably are taking significant unnecessary security and compliance risks. You're also wasting precious time and resources that could be better spent adding value for your family.
Consider the following analogy. In his book "The Big Switch," Nicholas Carr writes about the transition of businesses from on-premises electrical power plants to the use of third-party electrical grids. There was a time when many companies operated their own electricity departments, complete with electrical architects and managers. The transition to outsourced power allowed companies to dramatically reduce capital costs, improve power reliability, and refocus labor, management time, and other resources on better running their core business.
Unlike other businesses, many family offices have not made IT a priority. Too often, the result has been a lack of best practices in maintaining cybersecurity, business continuity, and disaster recovery. Today, cloud computing offers family offices an opportunity to remedy this situation. Like the companies of old transitioning to third-party power grids, family offices need to tap into today's advanced cloud IT infrastructure to reduce their risks and improve operational excellence.
The shift to a complete cloud-based infrastructure may seem daunting for family offices. However, in today's increasingly digital world, family offices simply must raise their game and utilize modern IT infrastructure to support secure and certified operations. They must demonstrate that their clients' highly confidential data is secure and that their operations support best-in-class disaster recovery and business continuity.
Family offices running their operations on servers in the closet are often a disaster waiting to happen. When something goes wrong, offices may find out their backup systems are not working correctly. They might discover the person who "knew all about it" is no longer at the company. By then, it's too late. It can take many months and a great deal of pain and embarrassment to recreate lost data and get back on track.
The right cloud architecture allows a family office to utilize true enterprise-level infrastructure, process maturity, and certifications that ensure greater efficiency and operational excellence. It allows them to make those capabilities available to their family.
However, simply taking a traditional server system and making it accessible through the cloud, often called "cloud-washed," will not address these requirements. It will not provide the fundamental architectural change needed to exploit cloud-native capabilities fully.
The graphic below illustrates the power of an integrated platform, such as AtlasFive, for not only transforming family office workflows and processes but the underlying IT infrastructural excellence to ensure best-in-class security, reliability, performance, and recovery.
The benefits of this architecture are far-reaching:
- IT infrastructure functioning as a utility
- Flexibility in expanding or decreasing infrastructure services
- More predictable costs for IT
- Moving IT staffing from infrastructure support to application support
- Increased security and reliability
- Built-in disaster recovery and business continuity
- Single sign-on to all applications
- More granular determination of user access rights (Family and family office users on the same platform)
- Ability to display data securely to any device Ability to accommodate "Bring Your Own Device" (BYOD)
- Ability to create a family office ecosystem available to the family, the family office staff, and any advisors
In 2020, Boston Private conducted an online survey of over 200 executives at single and multi-family offices, primarily in the US. According to their report, entitled "Surveying the Risks and Threats to Family Offices," the study uncovered "some worrying approaches to the risks family offices face, particularly cyber risk, family related risk, investment risk, and employment-related/insider risks." One major challenge in solving these problems is what the report calls "misalignment of vendor services and a lack of relevant experience in working with family offices."
According to the report, "The most common challenges for family offices are not knowing where to find good external risk vendors and a lack of external vendors with tailored approaches for family offices."
Understanding the nuances, having "lived" them, defines the effectiveness of any solution. AltasFive was built by a family office for the family office. It has been vetted by some of the world's largest and most sophisticated family offices and banks. As the iceberg image above conveys, what AtlasFive delivers "below the waterline" is a critical part of how we are enabling the family office of the future and ensuring greater cybersecurity and reduced risk.
Rehumanizing the Family Office
The idea of machines overthrowing and displacing humans has long been feared. This fear dates to at least 1872 in Samuel Butler's literary work Erewhon. Then, machines were mere metal gears, yet this fear still festered. The fear was driven by comparing the rate of the evolution of machines vs. the pace of the evolution of humans. Butler states, "What I fear is the extraordinary rapidity with which they are becoming something very different to what they are at present. No class of beings have in any time past made so rapid a movement forward."
Islands can be ideal vacation destinations. However, data islands (or data silos) cause significant problems when managing a family office. Created by using the wrong tools and work processes, data islands result in work duplication, reporting delays and errors, and families wondering about the true status of their affairs.
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