How can robotics support family offices today?
Currently, the best opportunities for family offices lie in the realm of RPA that automates repetitive, manual tasks performed by people interacting with computers.
An RPA robot operates exactly as a human would — logging in and interacting with applications, opening emails and downloading attachments, and storing files in well-defined locations.
These robots don’t automate entire processes, they fit seamlessly into existing processes and take on components that are low in added value. They effectively become part of the team, and RPA projects often result in more satisfied human employees and higher-performing work groups and outcomes are better because humans are freed up to focus on spotting issues, making decisions and analyzing data that is produced more quickly with fewer errors.
An excellent example is the preparation of tax compliance forms. Tax work requires judgment, but also, for example, seemingly endless cutting and pasting from system to system and values testing. RPA software frees the tax professional to focus on key decisions, while removing the strain of repeating tasks better automated, a burden that leads predictably to boredom and errors.
Emerging applications — dealing with information overload
In addition to RPA, there is also intelligent (cognitive) automation, which automates tasks such as speech recognition, natural language processing, and tasks that require judgment and perception.
One such application deals with the flood of incoming unstructured data that family offices are barraged with daily, including correspondence and emails and their associated attachments. These applications can be trained to take this information, understand it based on content and context, and then process it accordingly.
Responses might include filing, forwarding to a staff member for additional research, entering into a calendar or triggering an alert that informs management of a situation that requires their attention.
Similar benefits may be earned by family offices that subscribe to funds and invest in alternate investments and face a barrage of statements, covenants, Forms K-1 and the like, or family offices charged with receiving and preprocessing invoices.
Borrowing scale from institutional partners
The average family office has more than 25 external relationships with institutions, including banks, professional firms, investment managers and administrative services firms that cumulatively support tasks that smaller family offices typically cannot.
Each of these companies is likely in the process of adopting robotics automation within their own four walls, applying these to the client’s data, and creating service offerings based on processes built upon these capabilities.
For a family office interested in adopting robotics into its workforce, these trusted partners can bring institutional budgets and expertise, both of which may rest outside the smaller family office’s budget and scope.
These institutions are adopting not only relatively lower-cost RPA technologies, but also cognitive automation and full-blown AI.
What should you do next?
RPA and cognitive automation are rapidly being deployed throughout the world of financial services. It is expected that family offices will soon follow suit and adopt robotics processes for their own purposes. This has the short-term potential to help family offices achieve new levels of efficiencies in their often diverse and highly customized processes, while supporting them in creating services for the long view.
The emerging capabilities of AI and cognitive technology have enormous promise in helping families draw the rising generation into engagement with their legacy, but also of managing the uniquely long game of transferring a legacy that will endure for multiple generations.
This article was originally published in Tax Insights on 17 Aug 2017.