Could it be only a matter of time until Google, Apple or Amazon enter the robo-advisor space?
Steven Miyao, president of the research and consulting firm DST kasina, “definitely” thinks so.
“The biggest concern that the industry has is that Google or Apple decides to come into the financial services business,” Miyao told ThinkAdvisor. “They have the technology to do it. They have the relationship with the individual investor. They have to-date decided not to do that for multiple reasons, but that’s really the biggest fear for them to come in and say, ‘We’ll start a broker-dealer. We’ll start a robo-advisor.’”
Alongside Google and Apple, Miyao also considers Amazon a major threat. He envisions Amazon saying, “Everybody who is on Amazon Prime, we have a robo-advisor. And for the [$99] that you’re paying for Amazon Prime, you get it for free!”
But, is this a real possibility?
“I think [Google, Apple and Amazon] are definitely looking at those businesses and seeing the profitability of those businesses,” he told ThinkAdvisor. “I’d be surprised if they wouldn’t.”
During a recent visit to ThinkAdvisor’s office, Miyao discussed several technology innovation trends that he thinks could disrupt the financial services industry.
Miyao, who is a trusted advisor to some of the world’s leading asset management companies, formed his company kasina (acquired by DST in 2015) with the premise to help innovate the investment services industry because “we always felt that there was a lot of space for innovation.”
“This is a very, very slow-moving industry,” he said. “Over the years, I’ve thought, ‘Why is that?’ It attracts a sort of a very conservative bunch of people because you’re managing money and so you try to be very deliberate about that and so … it makes people not very innovative.”
Because the industry is so slow-reacting to innovation, it opens up opportunities for other people – like Google or Apple – to come in, Miyao said.
“We look at other industries where that has happened. You look at Blockbuster. They knew that there was Netflix. They knew that people were going to watch movies digitally,” he said. “They knew that that was happening and they could not get themselves to change. And they went bankrupt. There’s no more Blockbusters, nobody goes to rent a video in a store. That has just transitioned, that’s changed.”