IoT in Business

By: Jayesh Shah, EVP & Head, Technology Initiatives at DHFL Financial Services Group

Is the IoT (Internet of Things) hype, like many other technology trends in the past or is it a reality that is here to change the way we do business and live our lives? This is a question many are asking and looking for the right answer. One thing is certain; IoT is changing business models and organisations are working on ascertaining the benefits they can derive out of this latest technology innovation.

The rate at which devices are getting connected on a daily basis is mind boggling. According to Gartner, 5.5 million new things will get connected every day in 2016 and the number of connected things in use worldwide will hit 6.4 billion in 2016. This huge volume of connected devices, in conjunction with SMAC (Social, Mobile, Analytics, Cloud) technologies, is an opportunity for business to improve efficiencies, rationalize costs and provide a better experience to their customers.

One finds IoT being used in the unlikeliest of places. This year, the Wimbledon tennis tournament is taking advantage of IoT. Cameras in the stands will take pictures that will be instantly analysed to determine preferences of fans. This information will be used by Wimbledon for target marketing its merchandise.

According to a survey conducted by 451 Research on 1015 respondents, around 70% said they collected data and the majority of data comes from machine sensing, the rest comes from biological sources, such as humans and animals, and environmental sensing. Interestingly, 66% of those who said they collected data felt that business risk was reduced, 63% said operations were optimised, 33% said it helped in development of new or enhancing existing products or services, and 21% said it benefited them to enhance customer targeting. However, around 30% said they do not gather any data, the biggest barrier to this being security.

How does the Financial Services industry deal with this phenomenon? Do we have use cases where we can improve service delivery to our customers? Motor insurers are already experimenting with telematics to monitor driver behaviour. Life insurers too, can use data from wearables to improve products and services. ATMS, kiosks, cards and other back office functions will see uses for IoT.

Having said this, let’s try to understand the IoT architecture. We know it is all about connected devices transmitting feeds to distant computers that analyse the data to make sense out of it. The figure below gives the functional view of the IoT:

As one can see, connecting everyday objects to networks, allowing them to send and receive data, is the key to IoT. The low data rate (LoRa) mobile communications network is a critical component in connecting objects that may not be able to link up Wi-Fi networks to gain Internet access. This has a range of around 15 kilometers with a high capacity and long battery life.

Estimates of the size of the IoT market vary. According to Gartner it will be to the tune of $1.9 trillion by 2020. IDC estimates that it will generate nearly $9 trillion. However, it is important to seize the opportunity from one’s company perspective.

The next big thing after the Industrial Revolution is here and it is the IoT. It is changing the way we live and work. Companies are tying-up for product innovations that are unheard of; recently, MasterCard released an app exclusively for Samsung refrigerators for ordering groceries. Fitbit, a wearable fitness tracking devices company, acquired a mobile payment startup Coin, and plans to use NFC (Near Field Communication) technology to allow the wearable to be swiped for making purchases. IoT is sector agnostic and businesses had better start taking it seriously and putting in place, strategies to take advantage of it; they can ignore it only at their peril.