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Help keep your family office secure and productive during COVID-19: cyber and technology considerations

Danielle Valkner Family Office Leader, PwC US May 26, 2020

Almost overnight, the COVID-19 pandemic thrust many family offices into a remote working environment — one that most had not widely embraced because of confidentiality and security concerns. Here are some points around cyber and technology to consider as your family office adjusts to remote working for the short and long term. 

Working from home securely

Ensuring that you had the capabilities to work remotely  — and quickly — made it critical to focus first on the applications most necessary to do so. As you get up to speed, however, think about the long term, since remote working may become more commonplace. Consider options like software-as-a-service (SaaS) and cloud technologies that can grow and shrink with your needs. These technologies can allow for greater flexibility that won’t stress your internal infrastructure. 

Cyberattacks have been increasing amid COVID-19’s spread, so it’s critical to protect your company from  heightened risks, as described in our recent publication on How to Protect your Company from Rising Cyber Attacks and Fraud . The rush to set up remote operations may have meant putting some security measures on the back burner.  PwC recently released leading practices and tips for making remote work productive and secure.  If your company took short-cuts to expand remote connectivity, you should consider doing an assessment that reviews access, the current controls in place (established for a different world) and the threats your remote workers may inadvertently be creating. Your environment is now fundamentally different.  What was good just a few weeks ago may not be adequate today. 

As you establish a strong foundation for security and privacy, however, it’s important not to create overly burdensome compliance requirements. For example, while dual authentication with a single-use token or password is highly recommended, explore options for single sign-on capabilities so personnel don’t have to repeat the log-in procedures for each application. Also think about your password reset policy and procedures in order to achieve your security goals without creating onerous requirements for your staff. Be practical and strike a balance. Evaluate your controls and increase awareness and communication so employees know what’s expected of them and the reasoning behind it.

Consider your options for both near-term and long-term solutions. Some temporary workarounds may be required while you work on the longer-term optimal solution. Prioritize your actions and create a roadmap for the future. It’s important to define the goal line and understand what it will take to get there. For many, this will be an evolution and a journey.

Capabilities and information for effective decision making

Now is also the time to identify your critical data needs to help drive decisions and risk management. Many family offices are finding that the previous status quo around data and reporting is no longer sufficient. More transparency is needed, and real-time data is fast becoming the expectation. 

In today’s volatile environment, it is critical to have a real-time picture of your business and portfolio. How to compile and sort through the vast amount of data from multiple sources can be a challenge, however. Automated dashboards highlighting key risk and performance metrics can help you focus on the data you need so you can better understand your risk exposures and highlight where to take corrective actions, if needed. Explore data aggregation, auto reconciliation and automated business intelligence reporting tools that can significantly reduce manual activities and pain points as well enhance the accuracy and timeliness of the reporting process. Many new solutions have come to market in recent years that are more user-friendly and easier to implement and maintain, warranting a fresh look.

Additionally, automation tools, such as robotics process automation (RPA) and workflow/collaboration applications, can help reduce time spent on manual processes and tasks, lowering the risk of human error and in turn helping keep data more accurate, up to date and secure. For example, areas such as accounts payable, fiduciary responsibilities and investment lifecycle can benefit from automated, paperless approvals and automated audit trails. RPA has been successfully deployed at family offices in areas such as gathering documents and data for processing, document management, file downloads and uploads between systems and service providers, reconciliations, and running, formatting and distributing reports. Automating these repetitive rules-based tasks has eliminated hours from daily tasks and improved overall accuracy and timeliness.

There are a number of focus areas and opportunities to think about around data, reporting and analysis that have become essential in the current environment:

  • Document/data management and collaboration tools

  • Risk management reporting incorporating trend analysis and key risk indicators to manage enterprise and consolidated portfolio risks

  • Enhanced investment analytics and performance analysis to understand your net worth and the current and forecasted economics of your portfolio

  • Supervision and evaluation of investment managers

  • Scenario planning and advanced models for cash management and budget planning 

  • A deeper understanding of cost structure and levers for managing the bottom line

  • Secure mobile accessibility/communication portal for sharing information with family members, staff and advisors

The key question: Do you have the data you need when you need it? It is important to identify the “golden source” of your data (e.g. one source of truth) and to have the processes and controls in place to validate, aggregate, report and distribute critical information efficiently and on a timely basis.

The current environment will surely test your capabilities, but take the opportunity to challenge yourself to be strategic even in the short term. How? Focus on your immediate needs, but also plan a longer-term solution by asking if there is a better way to accomplish your needs with technology and automation as you think about what returning to work will look like for your family office. Take the time to inventory your pain points, gaps and requirements now as they are fresh in your mind — this can help create the roadmap for the future. 

Leading family offices are charting a path where there is less reliance on spreadsheets and manual processes, data and document management is streamlined, automated and controlled, and near real-time automated reporting is a reality in order to enable better risk management and decision-making. During these uncertain times, a continuous improvement mindset is important in order to emerge stronger in the future.

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