Citisoft Blog

The Amazon Effect: Can It Disrupt the Financial Services Data Market as Much as It Has Disrupted My Life?

Written by Jenny Mynahan | Jun 3, 2021

My love for Amazon started in 2010 when I left the big city of Boston and moved to a somewhat rural area of Maine with a newborn baby. Before this time, I have no recollection of ever buying anything on Amazon. Not long after discovering the convenience of Amazon shopping, I shelled out $79 to become a member of Amazon Prime. For those that remember the heyday of Prime, everything was in fact delivered in two days and for most items, you could pay an additional nominal fee to get it overnight (I often can’t resist almost instant gratification).

Not long after joining Prime, Amazon offered some PBS Kids programming that came in handy with my Curious George and Elmo-loving toddler. Over time, their streaming content has improved, and I love the ease of ordering up Showtime or HBO for one month to get through the latest season of Billions or Succession. The years go by and my love for Amazon grows. Amazon buys Whole Foods and I get Prime discounts there, they offer me the Prime Visa Signature card that has no annual fee and gets me 5% back on Amazon and Whole Foods purchases (this almost equates to a third income in this household) and the most recent benefit, they roll out free Whole Foods grocery delivery (I absolutely despise shopping in person).

It’s safe to say that despite the lack of actually receiving any of my Amazon orders within two days since the pandemic started, Amazon has improved my way of life over the last decade+. So when I read an Ignites article at the beginning of May stating that “Amazon is entering the financial services data management market dominated by BlackRock’s Aladdin division…” I was immediately intrigued and hopeful that Amazon can do the same for the asset management data management space…(My second thought was: it’s difficult to state that any one vendor is dominating the space given the myriad vendor solutions that are offered in an increasingly complex asset management landscape).

If history tells us anything, it is that the asset management industry needs to see new technology proven out which may slow adoption rates (our COO, Tom Secaur shared similar sentiment in a recent Ignites article). Managers are going to need a compelling business case to shift their data ecosystems to a relative unknown regardless of Amazon’s track record of success in other industries. That said, one of the easiest ways to penetrate the asset management tech and data market is through alliances with established vendors. Snowflake has used this tactic with success; and despite Amazon claims otherwise, as of now, I’d consider them somewhat of a direct competitor, given they are also looking to solve the problem of leveraging data for analytics from disparate, non-standardized sources. Because Snowflake has established partnerships with many of the premiere vendors and service providers (including BlackRock Aladdin, State Street Alpha, FactSet, and many others), it’s unclear if there is room for another cloud data platform to enter via this means.

All that said, the Amazon brand is well known for disruption, innovation, and customer satisfaction, and Jeff Bezos himself spent his early years in the industry so my guess is that many asset managers will at least be curious and watching this closely. I know I will be, but Jeff—if you are reading this, in your last month as CEO, can you please prioritize getting us back to two-day delivery before trying to take the asset management industry by storm?