The private bank's white paper explores how technology affects family-owned businesses' dynamics, including areas such as succession.

A majority of 113 family business clients interviewed by JP Morgan Private Bank in Asia are positive about how technology affects their firms and three-quarters of them think it will help with succession planning.

The findings are contained in a white paper produced by the private bank - Embracing Data, Digital and Disruptions: Planning Ahead for Succession. Of those surveyed, a third (32 per cent) are the current generation of family business leaders, while more than two-thirds (69 per cent) are the next generation of business leaders.

“Technology advancements continue to impact our clients’ businesses and wealth management plans,” Kam Shing Kwang, chief executive officer for the private bank in Asia and vice chair for investment banking, Greater China, said.

“Our clients acknowledge that technology is having a significant impact on their businesses. The way they manage their wealth has been similarly disrupted; However, only one in four family offices have integrated technological disruption into their strategic plans and are equipped to adapt,” Karen Tan, head of wealth advisory, South East Asia, said.

Respondents said that their top priorities are investing in new technologies (53 per cent) and professionalising management (41 per cent), thinking that technology will simplify processes by streamlining documentation, monitoring assets and optimizing decision making by using artificial intelligence.

The survey also showed different perspectives on the matter of control. Current business leaders (23 per cent) were less inclined to think of the patriarch or matriarch being the ultimate decision makers, compared with 42 per cent of the next generation in line for ownership of the business. The difference in perception could be due to the level of involvement in the family business.

“Perhaps it is time for the older generation to review their decision-making and governance frameworks and start involving younger family members who may bring fresh perspectives. This is also an opportunity for the older generation to coach and train – an important step to better prepare them for a smooth succession,” Tan said. 

Family business dynamics
Given external technological shifts, decisions concerning the main family business continued to be made within the family by the patriarch or matriarch (36 per cent), followed by the company board, or a selected few (34 per cent). Interestingly, businesses with $1 billion-plus revenue were disinclined to entrust non-family executives with decision-making powers.

Some 55 per cent of the next generation are ready for technological disruption in the family business, but a similar percentage also feel that they lack experience. A large majority (75 per cent) said that their business will be significantly transformed by technology, and an even larger majority (85 per cent), who say the family business has already experienced changes, believe that change is positive.