Unit II - Financial Technology

Internet of Things
Internet of Things
The
Internet of Things is the way of connecting dev
ices
to communicate, share information, anticipate
needs, solve problems and improve efficiency.
It’s basically inter-networking of physical
devices, vehicles, buildings and other objects,
embedded with electronics, software, sensors,
actuators, and network connectivity that
enables these “smart objects” to collect and
exchange data.
Internet of things
The “Internet of Things” (IoT) is fast gaining

recognition in many industries.

In the financial services industry in particular, which

has long capitalised on the intangible, the IoT offers

great opportunities for transforming businesses, and

IoT applications have great potential.

Internet of things

Although there is not one single definition of IoT, put

simply it is a suite of technologies and applications

allowing devices with embedded sensors to be
connected to the Internet and exchange data, using
the same Internet Protocol (IP).
 Such devices may be electronics, software,
pacemakers, kitchen appliances, and cars.
Internet of things
Given its vast potential, the Internet of Things has a wide variety

of uses in a broad range of industries. These include retail,

manufacturing, health, hospitality, waste management, and, of

course, financial services.

 These connected devices are used throughout the physical

world and seek to improve quality of life as well as making

industries more productive. The IoT network is building not only

thing-to-thing relationships but also people-to-thing relationships.

Internet of Things
Internet of Things

Internet of Things (IoT) devices support the expansion

of internet connection beyond the usual standard devices

like computers, laptops, smartphones etc.
These IoT devices are purely integrated with high

definition technology which makes it possible for them to

communicate or interact over the internet smoothly and
can also be managed and controlled remotely when
required.
IOT Device Lifecycle
 What Drives the Growth of IoT?
According to Gartner, the Internet of Things will explode
by 2020. More than 34 billion connected devices by
2020.
10 billion will be smartphones, tablets, and other
traditional computing services.
Businesses have been the first to adopt the IoT,
implementing it to lower their operating costs and
improve their productivity, which has enabled them to
expand into new markets or develop new product lines.
Simultaneously, consumers are adopting IoT
technologies to improve their quality of life, and
governments are increasingly using the IoT to reduce
spending the drivers of growth for the IoT.
 Urbanisation
Urbanisation is a key driver of IoT growth.
The growth of cities requires the development of efficiencies
and strategies for them to remain viable.
The IoT can make cities more sustainable and adaptable.
Placing devices on objects can help public security and safety
departments, transportation departments, and can be a
valuable aid in managing infrastructure.
The IoT can become very handy when managing scarce
resources, mainly water, power, natural gas, food, and
healthcare.
By using models that optimise the utilisation of these
resources, a city can improve its quality of life.
Smartphone Penetration Growth
By 2020, smart phone penetration is expected to reach
2.87 billion users, an increase of 54.3% from 1.86 billion
users in 2015.
Smartphone growth drives the Internet of Things.
These devices have three-axis accelerometers,
gyroscopes, magnetometers, compasses, and barometers
embedded.
Investment in smart phones ensures that the quality of
these components improves with every release, and the
IoT benefits from this.
Also, the smart phone is the logical remote control for all
connected devices, storing data from fitness trackers,
managing intelligent homes, as well as other uses.
Rising Demand for Connected Devices
Connected devices are being invented at a very fast
pace, and this drives consumer demand.
An estimated compound annual growth rate (CAGR)
of more than 24% until 2021 is expected as a result of
increasing smart phone and Internet use, industrial
IoT adoption and smart city projects across the world.
Government IoT initiatives and the growing number
of connected devices that generate and exchange a
greater amount of data, which also explain much of
the estimated growth.
Internet penetration of 54.6% is expected by 2020.
Increasing Need for Inventory Management
Inventory management is important for businesses as
it allows them to control their ordering and storage
costs and their use of products.
The real-time tracking of inventory using radio-
frequency identification (RFID), which uses the IoT, is
the next big thing in inventory management.
In fact, applications can help businesses track their
products in real-time by recognising the barcode label
of the product and using the embedded GPS location.
Therefore, organisations can instantly check their
product location and inventory levels and forecast
demand.
Cloud-based Platform Growth
Increasingly more businesses, governments, and
consumers are becoming connected, or expect things
to be connected.
In this context, cloud-based platforms gain a
competitive edge.
The Impact of IoT on Businesses
Firms are producing smarter and more
technologically advanced products. This impacts
IoT on businesses in several ways.
Perhaps the most visible effect is the business
landscape itself, as many industries are adjusting
or have already adjusted to the new norms.
The IoT comes with mainstream technology and,
from this point of view, some industries may not
be able to keep up with the new developments,
while others may simply follow the lead of others.
The Impact of IoT on Businesses
The logistics industry is one of the first areas
expected to face a lower demand for their services
due to the IoT automation.
The growth of the Internet of Things and the
proliferation of social networks, mobile operators,
and “smart” devices have changed business
models.
 Real-time Data
Digitisation of information as well as instant
exchanging and reporting of data between
interconnected devices facilitates control and
optimises processes.
Companies are now able to check their inventory
levels and report inefficiencies and will know if there is
a shortage or a surplus of a product.
In fact, the IoT shifts waste management to a new
level by introducing real-time control, thereby
lowering companies’ costs dramatically.
 Remote Access
As the IoT becomes increasingly popular and a
growing number of businesses start capitalising on the
vast network, cloud-based software will make it easier
to manage a production line or an entire business
remotely, leading to faster processing.
For example, a gas company needing to perform
regular checks on its tanks and spending enormous
amounts of money on travel and wasting hours sitting
in traffic can save on commuting and effectively
control business costs.
Ultimately, this could mean higher profits due to
lower operating costs and improved return on assets
(ROA).
 Increased Productivity
The IoT allows a business to be run remotely and more
productively.
In this context, real-time data, remote access, and
faster processing are likely to increase the productivity
of businesses using the IoT.
Although there is a cost for shifting from the tangible
to intangible, mostly related to the upgrade of the
business’ devices, eventually, the shift will pay off with
more efficiently produced products and services.
The IoT in Categories
There are roughly nine categories in which companies
are developing IoT
The wearable category captures any device that is
attached to the body, and these are mostly fitness
trackers and smart watches, although it includes smart
clothes and infant trackers such as smart socks
The connected home category is about digitalising the
home and covers lights, sound systems, heating,
opening doors, and even smart doorbells.
.
 The IoT in Categories
The infrastructure category looks at providing the right
networks and sensors so that devices can work properly.
The healthcare category deals with medical instruments
such as sugar level trackers, pacemakers, and
thermometers.
The utilities category deals with technology to track the use
of electricity, gas, and water to optimise its usage.
The IoT in Categories
The industrial category looks at uses for the IoT in
industries where expensive assets are required, such as
mining or agriculture.
The retail category focuses on creating more
interactive shopping experiences, using connected
sensors and mobile apps.
The drone category aims at using drones to become
more autonomous and helps to capture data for
construction and other projects
The automobile category uses IoT to transform the car
insurance market and improve driving habits.
 IOT Device Lifecycle
IoT has a very simple lifecycle of development.
Deployment followed by monitoring, servicing,
managing, which is followed by regular updates and
decommissioning at the end.
Combining IoT and Blockchain

IoT is often associated with Blockchain.

Blockchain can expand the use of cryptographic data
in the IoT space, making customer information more
secure and transactions faster.
Businesses can also capitalise on the digitalisation of
IoT to manage complexity and lower costs using
Blockchain, which has a proven record of virtual, cost-
effective, decentralised networks.
In doing so, they are more likely to build trust in
customer relationships, eliminate potential points of
failure, and ensure more flexible and secure
transactions.
Combining IoT and Blockchain
One concrete application for combining these technologies
is tracking a history of unique devices and the interaction
with others, which could help for auditing and insurance
purposes.
Another is empowering smart devices to become
independent agents that perform their own transactions.
A typical example is a vending machine managing its stock
and reordering, or a smart car that can identify when it
needs maintenance, schedule it, drive to the garage, pay for
it, and record its MOT.
Commonwealth Bank of Australia, Wells Fargo, and
Brighann Cotton have made the first global trade
transactions combining the IoT and blockchain technology.
 In the sharing economy of the future, the integration
of IoT and blockchain may enable the full automation of
day-to-day operations.
The IoT in Financial Services
The Internet of Things will transform the financial
industry in an unprecedented way.
Today’s chief financial officers (CFOs) are faced with
non-financial responsibilities, especially technology-
related, including IoT.
Remotely-accessed, comprehensive data embedded
into connected devices is used in insurance, peer to-
peer lending, and real estate
Insurance companies are adopting the IoT to integrate
Insurance

policies, premiums, and customers into

comprehensive, readily accessible database, which can
lower coverage costs.
Auto Insurance
The IoT is employed in the calculation of the actual
mileage covered and the driving behaviour of the
policyholder through a tracking device.
Home Insurance
 In home insurance, smart embedded devices can
detect fire, water leaks, or high levels of carbon
monoxide, thereby lowering insurance premiums as
the risk undertaken by the insurer will be lower.
 Insurance
Healthcare Insurance
 Large companies like Apple or Samsung are tracking
the health of individuals through sophisticated
monitoring devices, and Vitality offers rewards based
on the level of activity done by the policyholders.
The integration of IoT in the insurance sector and the
increasing number of fintech startups is expected
to further drive the growth in this sector, in new areas
including agriculture insurance, car insurance and
health insurance.
 Real Estate
Fintech startups are employing the Internet of Things
to create new opportunities in commercial real estate.
With IoT technology, startups collect data about
repair, maintenance, and energy use, thereby being
able to better assess the value of a property. Also,
through occupancy sensors, energy costs can be
regulated, and building maintenance can be lowered
up to 30%, especially in industrial zone areas.
 Should this data go public, it could create a trading
market, providing investors with higher transparency
and accuracy when bidding.
This means the involvement of IoT in real estate
could also revolutionise real-time bidding markets.
O2O and IoT in FinTech
Ecommerce giants such as Alibaba and Amazon
worked really hard to disrupt the retail industry.
However, after a while, they realised that operating
only online is not feasible for long-term dominance.
Amazon has started opening 2000 Amazon Fresh
stores, and Alibaba is investing more than $300 million
in a discount supermarket in China.
O2O and IoT in FinTech
Online-to-offline (O2O) commerce is a commonly used
business strategy seeking to shift prospective customers
from online stores to brick-and-mortar businesses.
With the correct software and by operating in the IoT
network, O2O identifies prospective customers online
through Internet advertising and email marketing
campaigns and shifts them to the offline business.
Hence, customers, who are more enticed in viewing the
actual product, visit the online store, select the product
they want and are directed to the brick-and-mortar store,
where they make the actual purchase.
Companies with both an online and offline presence
employ the O2O business strategy as a means to cross-
sell.
Challenges Faced by the IoT
High-Frequency Trading
Data Management
Successful IoT Use Cases in the Financial Sector
Ingenico group
MasterCard Start Path
VISA
AlfaBank
 Google Home Voice Controller

Google Home
Voice Controller is
a smart IoT device
which allows the
user to enjoy
featureslike media,
alarms, lights,
thermostats,
control the volume
and much more
functions just by
their voice.
 Features
Google home allows a user to listen to media.
Let’s the user to control TV and speakers.
It is capable of managing timers and alarms.
It can remotely handle the volume and home lights as
well.
It helps the user to plan their day and get things done
automatically.
 Amazon Echo Plus
Voice Controller
Amazon Echo Plus voice
controller is a popular
and reliable IoT device. It
is capable to run songs,
do phone calls, setting
timers and alarms, ask
questions, providing
information, checking
the weather, managing
to-do & shopping lists,
managing house
instruments, and several
other things
Features
Amazon Echo can play songs, connect to external
speakers or headphones.
It is capable of making calls and messaging on voice
commands.
Amazon Echo has around 6-7 microphones, good
technical specifications, and sound cancellation. It is
capable of hearing your voice from all directions even
when songs are played.
Controls compatible smart home devices including
lights, plugs, and more.
 Amazon Echo Plus
Voice Controller
Amazon Dash Button is
basically a device that
gets connected over
internet Wi-Fi and
makes sure that the user
does not lack important
household items like soft
drinks, grocery material,
medical and personal
care, kids and any pet
items ever again.
 Features
It allows the user to order products quickly and there
is no need to recall the message again and it also helps
to reduce the time frame for searching the required
product by the user.
Amazon Dash Button also allows the user to reorder
from popular brands – like Bounty, Tide, Cottonelle,
Glad, Clorox etc.
It does not accept fresh order if the prior order is not
complete unless the user allows multiple orders.
It is a good and reliable IoT product that is developed
for making the user’s lifestyle simple and easy.
 August Doorbell
Cam
August Doorbell Cam
is an effective IoT
innovation. August
Doorbell Cam allows
you to answer your
door from anywhere
or remote location. It
constantly checks
your doors and also
captures motion
changes in your
doorstep.
 Features
Doorbell Cam pairs with all August Smart Locks to
easily let guests into your home.
The integrated floodlight delivers clear, full-color HD
video even full-color.
It constantly monitors your doorstep and will click the
moments leading up to a motion alert.
Free 24 hour video recording.
It comes with a speedy and hassle-free installation
process.
August Smart Lock
August Smart Lock has
proven to be a reliable
security IoT device. It allows
the user to manage their
doors from any location
hassle-free. It helps the user
to keep thieves away and
family in your home.
 Features
Allows the user to know about each and every person
coming and going into your home.
Provides unlimited digital keys and no fear of stolen
key.
It gives the status updates of your door as it is properly
closed or not.
It has a good auto-unlock feature and as soon as the
user arrives near the door it opens automatically.
Easy installation and is compatible with most
standard single cylinder deadbolts.
 Kuri Mobile Robot
Kuri is the first sort of
home robot and most
popular too. It is
specifically designed for
entertainment. Kuri
interacts with the users
and captures moments all
around the house daily.
 Features
Kuri has capacitive touch sensors and HD camera.
It is integrated with gestural mechanics and
microphones.
It has heart light and speakers.
It includes integrated mapping sensors and drives
system.
It has a good processor and a smooth charging pad.
Thank you