Joan Zerkovich, Sr. V. P. Operations, Aais (American Association of Insurance Services)
The Internet of things (IoT) is no longer just a vision of the future. While futuristic home and personal uses of IoT devices are at the forefront of many conversations, a recent McKinsey report estimates that industrial uses will account for at least half of IoT uses in the future. This is no surprise to so many businesses where IoT is a being implemented today to improve manufacturing processes, to collect data for improved customer experiences, and to monitor devices to mitigate risk and sometimes to get better insurance rates.
CIOs are already developing infrastructure and data analytics to accommodate these new data streams, working with internal business units to improve operational efficiency and with customer support teams to provide new services. This wave of IoT expansion is as challenging as the early days of the Internet when CIOs struggled to keep up with the explosion of personal computers connecting to local area networks and then to the outside world. Many of the networking issues from the past remain the same but are now complicated by unique security and data trust issues.
Similar to the early days of personal computers, IoT device manufacturers are focused on the development of proprietary hardware and software to optimize new capabilities, capture market share, and to embed their products into business infrastructure. There are numerous communication and data standards for IoT devices, determined by the type of network, nanonetworks to extensive area networks; topology, from line to mesh; and application, proprietary or open. Each business will need to make strategic decisions around network architecture, communication protocols, data standards, and data security today with a design that optimizes flexibility and a rearchitecting as consolidation of communication and data standards occur.
Data management and security
Much of the power of IoT devices reside on their ability to monitor and collect data from devices throughout an organization and across geographic locations. Data is often relayed to centralized monitoring systems or other repositories for analytics across corporate networks or the open Internet with all of the same issues we have today with data security, trust, and assurance the data provides an immutable record of activity.
Each IoT device communicating across the network has the potential to be compromised and used as an entry point into enterprise networks. This risk will increase as the computing power of devices increases; software functions become more sophisticated, residing on IoT devices, and communication across networks expands. New types of cyber risk will emerge in hardware, software, and communications protocols that will require monitoring, patching, and business continuity planning. In the case of a data breach, insurance claims processing will require forensics on each of these components to determine where liability exists.
New technology always brings risks to those who use it, especially early adopters. Companies that understand these risks can work with IoT vendors today to mitigate risks and then drive customer demand for critical enhancements in the future. Here are a few questions to ask IoT suppliers as you invest in this new technology.
• What are your plans for scalability and interoperability with other devices? What standards are your vendors following, and who are the other manufacturers they are working with on integrated management platforms?
• What is the roadmap for expanding data management capabilities on the remote devices, including the use of AI to minimize the data that is transmitted to remote monitoring systems?
• What hardware and software security mechanisms are deployed in the IoT devices to ensure data is secure, trusted, and an auditable record? Will the IoT hardware incorporates immutable identifiers that authenticate data transmissions. Are you considering blockchain as a technology to provide these features?