# Investors ignore the tech revolution at their peril
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2017-04-04
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: Digital Disruption Risks for Blue-Chip Investments
Meta Description: Colin McLean, managing director of SVM Asset Management, warns of serious risks posed by digital disruption to traditional blue-chip investments in sectors
Tags: featured
Tag URLs: featured (https://financedigest.com/tag/featured)
URL: https://financedigest.com/investors-ignore-thetech-revolution-at-their-perilhtml

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**Comment from Colin McLean, managing director, SVM Asset Management:**

- Digital disruption creates serious risks for blue-chip investments
- Retail sector hardest hit by the growth of tech giants such as Amazon and Alibaba
- Challengers also threatening [traditional banking](https://www.financedigest.com/the-role-of-fintech-in-disrupting-traditional-banking-services.html "The Role of Fintech in Disrupting Traditional Banking Services") and insurance

“High-capacity broadband combined with cloud and mobile computing, big data and smartphones is disrupting many sectors and forcing new entrants to apply innovative business models. The [risk this creates for UK blue chips should ring alarm bells for investors](https://www.financedigest.com/p2p-investors-polled-on-their-thoughts-and-opinions-on-risks-vs-rewards.html "P2P Investors Polled on Their Thoughts and Opinions on Risks vs Rewards").

“The retail sector is being hit particularly hard, lagging the main [share indices across the whole of Europe](https://www.financedigest.com/germanys-scholz-queen-elizabeth-embodied-the-best-of-europes-shared-inheritance.html "Germany’s Scholz: Queen Elizabeth embodied the best of Europe’s shared inheritance"). On the UK high street activity continues to shrink, with speciality shops and restaurants that depend on footfall also [seeing weakness in retail](https://www.financedigest.com/uk-retailers-report-record-food-inflation-but-see-falls-ahead.html "UK retailers report record food inflation but see falls ahead") parks and shopping centres.

“The main [warning signs have been in the growth of tech](https://www.financedigest.com/europe-unveils-hi-tech-satellite-to-speed-up-extreme-weather-warnings.html "Europe unveils hi-tech satellite to speed up extreme weather warnings") giants such as Amazon and Alibaba. The only stores that appear to be coping with this onslaught are those with a strong online offering, such as John Lewis. The intelligence brought into [homes and everyday objects via the Internet of Things](https://www.financedigest.com/9-surprising-things-that-could-invalidate-your-home-insurance.html "9 Surprising Things That Could Invalidate Your Home Insurance"), and new services like Google Home and Amazon Dash, will see even more products circumvent bricks and mortar retailers.

“Other sectors are being disrupted too. Bank branch [closures are just one tangible sign of a change in customer demand](https://www.financedigest.com/plastic-caps-screw-caps-closures-in-demand.html "Plastic Caps & Closures Witness Strong Sales in Line with Convenience Packaging Trend; Screw Caps & Closures in Demand"), with many people now managing their accounts entirely online. On top of this, new challengers are using big data to compete with traditional banks, targeting niches of profitable customers with direct lending methods, and using [technology to monitor](https://www.financedigest.com/precise-remote-monitoring-to-steal-the-cell-separation-technologies-market.html "Precise Remote Monitoring to steal the Cell Separation Technologies Market") risk.

“Elsewhere, financial technology such as Blockchain could accelerate demonetisation and make way for competitors that are currently not even in the finance sector. New data analysis could [disrupt insurance](https://www.financedigest.com/the-road-to-digital-disruption-in-motor-insurance.html "The road to digital disruption in Motor Insurance"), with phones now used to gather data on lifestyle, preferences and risks. The biggest threats in this space are in Asia – Aliababa and Tencent Holdings have already moved into [digital banking](https://www.financedigest.com/how-fs-organisations-can-enter-the-new-age-in-digital-banking.html "How FS Organisations Can Enter The New Age in Digital Banking"), scooping up customers with astonishing ease.

“Investors need to consider the risks these [developments](https://www.financedigest.com/southampton-development-continues-to-excite-local-investors.html "SOUTHAMPTON DEVELOPMENT CONTINUES TO EXCITE LOCAL INVESTORS") create for their portfolios. The gaps in the high street, such as HMV and Blockbuster, are testimony to this.”


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