IoT for financial services
It is easy to see how logistics, home automation, healthcare, automotive, energy, etc. have mind-blowing IoT use cases. However what about IoT and financial services? Since I live in the banking capital of the world – i.e. London – there must be something useful the City can do with IoT!
Personal insurance and IoT is easy
If a sensor can tell your insurance company when, where and how you drive then your car insurance will be able to offer insurance for actual usage and risk. If you are willing to wear sensors on your body then life and health insurance can be personalized. Share your mobile location with your insurance and travel insurance can be made into a dynamic one click service. House insurance can also go far better if sensors would measure risks, e.g. water damage can be reduced if your alarm system and your water meter would talk to one another.
Business insurance and IoT
What works for personal insurance also applies to business insurance. Logistics should pay for actual risk coverage. Health and travel insurance for employees can be tracked via sensors as well.
Linking insurance data to investment opportunities
If insurance companies anonymize and aggregate data then investment banks would benefit enormously. Delays in transatlantic shipping will delay sales and will impact stock markets. Knowing how many trucks left a car manufacturer’s plant will give you an excellent indicator of stock levels and future revenues. If lots of employees of Zara need travel insurance for some new countries, it is easy to predict investment in expansion is likely to happen in Inditex. Some use cases will require insurance customers to agree with data being shared. Nothing like a discount to accelerate this.
Other sensors and investment banking
Investment banking should invest in knowing weather and other easily measurable things milliseconds before others. High-frequency trading should not only happen inside black pools but could include storms that will delay ships, air traffic, etc. Banks that warn populations minutes or seconds earlier of a tornado, tsunami or earthquake will be seen as doing something good. That they will put their investments into safety or make some extra investments milli-seconds before the rest will be lost in the details.
IoT and retail banking
Retail banks always want to attract more savings and provide more credit. Knowing that your washing machine will break down in the next three weeks will allow them to offer a good credit deal first. Collaboration with home appliance and car manufacturers would be beneficial in this aspect. Also being able to predict how many appliances will need maintenance means that extending business loans to small businesses becomes a lot less risky.
IoT and other innovations
Adding block chain, machine learning, big data, cloud, etc. in the mix would open even a lot more use cases but let’s deal with those in another post…