Gartner, Inc. forecasts that 4.9 billion connected things will be in use in 2015, up 30 percent from 2014, and will reach 25 billion by 2020. It is prophesied that it would change the way we live our lives and most importantly the way we do business. The discussions on internet of things have primarily centered on personalization and predictive analytics, and the use cases centered on preventing disasters or intelligent automation. But very little is being discussed about how would these billions of devices alter / impact the financial industry.
According to a Gartner research manufacturing, utilities and transportation will be the top three verticals using IoT in 2015 – all together they will have 736 million connected things in use. By 2020, the ranking will change with utilities in the No. 1 spot, manufacturing will be second and government will be third, totaling 1.7 billion IoT units installed. “Government will take the No. 3 spot as it invests in Smart Street and area lighting for energy saving reasons, Utilities will move to the No. 1 position because of investment in smart meters.”
Though financial services is investing only 13% on sensors amongst the top industry vertical (ref:Digital IQ Survey by PWC) but this is set to change as more insurance and banking corporations recognize the importance of iOT in their Customer facing offerings and employee facing offerings. The typical use cases where insurance and financial industries can benefit from iOT could be
According to a Gartner research manufacturing, utilities and transportation will be the top three verticals using IoT in 2015 – all together they will have 736 million connected things in use. By 2020, the ranking will change with utilities in the No. 1 spot, manufacturing will be second and government will be third, totaling 1.7 billion IoT units installed. “Government will take the No. 3 spot as it invests in Smart Street and area lighting for energy saving reasons, Utilities will move to the No. 1 position because of investment in smart meters.”
Though financial services is investing only 13% on sensors amongst the top industry vertical (ref:Digital IQ Survey by PWC) but this is set to change as more insurance and banking corporations recognize the importance of iOT in their Customer facing offerings and employee facing offerings. The typical use cases where insurance and financial industries can benefit from iOT could be
- Usage of wearables and smart monitoring devices for preventive health management – The scope could be as complex as medical stents emitting information that could predict and prevent a potential heart-attack to as simple as monitoring dietary habits through wearables. This is also getting converged under the mHealth initiatives and iOT would probably also facilitate greater collaboration between payers and providers.
- Smart home appliances like water leakage detector, air purifiers etc. could bring down property claims drastically and in turn bringing down the loss ratio further. Complex natural disaster predictive sensors for tsunamis, earthquakes etc. could reduce the causality and property loss, thus leading to less insurance claims
- Sensors that monitor electricity, gas and fuel usage could help a customer monitor and cut down the monthly outgo on utilities and sensors in refrigerators and ovens could help consumers keep a track of their consumption patterns and then provide the best deals proactively for buying daily use items.
- Air pressure monitoring equipment also known as smart TPMS devices can help prevent accidents and causalities and active weather and road condition monitoring devices can predict what could go wrong on which turn thus preventing accidents and respective claims. This in all would bring down accidents and also a more satisfied customer
- Fire safety sensors could proactively detect a short circuit in a house or within an enterprise enabling either shutting down of respective units or calling the fire safety teams thus reducing the overall damage to life and property and in turn less number of claims
- Some of the use cases could go up to identifying the weather conditions and letting a customer based on his health advice what precautions he/she needs to take because of allergies, diseases like flu etc. thus reducing the overall medical claim.
There could be many more use cases that could be thought of, but what needs to be developed is a common platform and protocol wherein data/ information could be stored and transmitted securely as this would be very key to maintain the confidentiality for an individual in financial industry