Your DNA isn’t anonymous anymore.

Chances are you have heard of the companies 23andMe, Ancestry or MyHeritage. They are all consumer DNA testing companies that provide users with their personal genetic profiles. This business is booming, with companies like these masking a customer base of over 12 million people who are curious about their genetic makeup. So how exactly does it work? Well, consumers provide these companies with a sample of their saliva taken at home using a do-it-yourself kit and send it to the company’s lab.  In return they get sent several reports about their ancestry, wellness and genetic health risks. Customers can also chose to add their results to public genealogy websites. These companies have gained considerable notoriety as of late due to their part in piecing together family trees, helping people find long lost family members, and even leading the police to capturing the infamous Golden State Killer.

So what exactly is so bad about sharing your data with these companies? Well, your putting your DNA in the hand of third parties. Your DNA is uniquely yours, until its not. MyHeritage announced earlier this year that millions of their user accounts had been hacked. None of these companies guarantee the security of your data and there are numerous reasons why hackers want to get their hands on it. They could try to sell your data back to you for ransom, threatening to share your data with insurance or loan companies, employers, or the police. This could affect your health insurance premiums, your possibility of getting a loan, and much more. Unlike a credit card or social media account hack, you can’t cancel your DNA, it’s with you forever.

What more, you don’t even need share your DNA with one of these companies for you to possibly be identified through one of these genealogy databases. New research has found that over half of the US population is now identifiable thanks to the DNA data shared by others. If sensitive data exists, there is a way to exploit it, and genetic testing is no exception. Knowing your DNA is the most important data you own, would you share it?

Sources:

https://www.sciencealert.com/dna-testing-service-exposed-92-million-customers-in-huge-data-breach

https://www.cnbc.com/2018/06/16/5-biggest-risks-of-sharing-dna-with-consumer-genetic-testing-companies.html

https://gizmodo.com/23andme-is-getting-lots-of-money-from-big-pharma-to-sha-1827891890

https://www.fastcompany.com/40580364/the-ftc-is-investigating-dna-firms-like-23andme-and-ancestry-over-privacy

https://www.theverge.com/2018/6/6/17435166/myheritage-dna-breach-genetic-privacy-bioethics

https://www.wired.com/story/genome-hackers-show-no-ones-dna-is-anonymous-anymore/

https://www.23andme.com/en-eu/dna-reports-list/

Digital innovations and changes in consumer needs and expectations have fostered the disaggregation of the traditional financial services value chain. This disaggregation has given rise to numerous new options for consumers, one of them being the automation of their investments. One of the latest trends, namely robot based advisory, is gaining traction in the wealth management sector.

So, what are robo-advisors exactly? Robo-advisors are online investment platforms, that automatically perform many of the tasks of traditional financial advisors, with the use of computer algorithms. A consumer answers several detailed questions about their currently financial status, investment timeframe, goal, and aversion to risk. With this information, a robo-advisor is able to recommend an allocation of assets that best fit the consumer’s needs. Additionally, once a portfolio has been created, the platform manages it for you. Not only does it execute trades and rebalance the portfolio itself, but it also offers tax-loss harvesting, low minimum investments, and can often be accessed from several different devices.

Robo-advisory is democratising financial management. Because of the low cost of taking on new clients, robo-advisors are able to serve those with little savings, who couldn’t have afforded a financial advisor in the past. Furthermore, its consumer friendly and the platforms are able to serve everyday people with little understanding of the complexities of financial decision making. These robo services are also helping to avoid conflicts of interest and the potential distrust of human advisors who may just be vying for their own commission.

However, it’s hard to say exactly how these robo-advisors will do in the long run. Due to their recent introduction, robo-advisors haven’t experienced a stock market crash or recession, and it’s hard to say exactly how they would react if they did. Never the less, Business Insider Intelligence predicts that by 2020 robo-advisors will be behind 10% of all global assets under management. What more, we as millennials and Gen X:ers, with our notoriously ‘low’ trust in financial institutions, still accumulating assets, and love for anything digital, are their main target. So what do you think? Would you let a robot manage your money?

Sources:

https://www.businessinsider.com/4-reasons-robo-investing-growing-2017-1?international=true&r=US&IR=T.

http://knowledge.wharton.upenn.edu/article/rise-robo-advisor-fintech-disrupting-retirement/.

https://www.nerdwallet.com/blog/investing/best-robo-advisors/.