According to Taimur Hyat, COO of PGIM, technology is set to change the service sector, but established companies will prevail.

Mr Hyatt explained that while disruptive new entrants are expected to be found in parts of the services sector, “the Goliaths will beat the Davids”.

“Service disruption will actually increase the dominance of an elite group of existing technologically advanced operators – a very different path to the obsolescence and pain seen in other sectors,” Mr Hyat said.

This, he noted, was due to three main reasons.

"First, large parts of the service sector are suffering from 'technical momentum'especially areas that are highly regulated such as financial services and healthcare. New technologies present huge legal and regulatory challenges that can take many years to resolve,” explained Mr Hyatt.

"At a minimum, heavy regulation makes it difficult for start-ups to enter key parts of the service sector and really challenge incumbents," he noted.

Second, sticky service customer bases make customer acquisition costs prohibitive for new entrants.

"It turns out that people are more likely to switch their online grocery store than their realtor, doctor or local hospital," Mr. Hyatt pointed out.

Third, existing firms in the service sector are aware of the high cost of complacency.

"Information companies are now shedding legacy backbones, making large-scale investments in new technologies and supplementing internal development with strategic technology acquisitions," explained Mr. Hyatt.

"This cannibalizes their heavy investments in legacy systems, but sets them up for future success," he added.

As such, Mr. Hyatt concludes, "much more so than in manufacturing and retail, a select group of existing technology services firms will not just survive, but actually thrive, during the process of creative destruction in front of us."

Maja Garatsa Djurdjevic

Maya's career in journalism spans more than a decade in finance, business and politics. Now an experienced editor and reporter in all elements of the financial services sector, before joining Momentum Media, Maya reported for several established news outlets in South East Europe, looking at key processes in post-conflict societies.