Over the past five years, as Simple has conducted the annual family office software review, one consistent finding is that new family office technology is on the rise and the number of service providers continues to increase. While the use of Excel spreadsheets persists, technological advancement and shifts in intergenerational culture are accelerating the move to family office digitisation. This insight explores growth drivers, legacy players, and new innovators, offering guidance on partnering with software providers for family offices.
New family office technology: Understanding the drivers of growth
Three major factors are driving the growth of software providers in the industry. The first is cloud computing. It has made software development faster and more affordable, allowing new entrants to enter the space. It has also enabled family offices to benefit by digitising their operations quickly. Instead of creating custom software from scratch, offices can now lease Software as a Service (SaaS) platforms from providers and pay for them on a subscription basis.
Secondly, generative AI is playing a significant role in driving growth. When McKinsey estimated that AI would add $13T to the global economy in the next decade, most companies jumped at the opportunity, switching from data-driven to AI-driven to remain competitive. This year, Simple’s 2023 Family Office Software review report found that 80% of providers have implemented AI functionality or plan to do so in their products or services.
Thirdly, the entrance of millennials into family office operations is ushering in a new era in investments. The younger generation is driving demand for socially responsible wealth management and tech solutions, prioritising impact investing and sustainability.