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IoT + Blockchain = Product Intelligence: An equation that delivers secure monetization opportunities

In the equation IoT + X = Intelligence, what role can blockchain play as the X factor?

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One of the many advantages of the Internet of Things (IoT) is that it has introduced additional revenue streams. But to truly capitalize on these, companies might need to rely on yet another technology: blockchain.

The linear transactions involved in a traditional economy typically mean that a company produces a widget at the end of a series of interlinked processes — a product that customers then buy. Supply chain vendor interactions and marketing strategies cater to this linear model with the goal of increasing efficiencies and revenues along the way. 

Case Study: Advancing Smart Manufacturing Operations Value with Industry 4.0 Platform

But the traditional economy is giving way to new ways of doing business, spurred in part by Internet of Things (IoT)-enabled devices. The sharing economy upends the notion of an asset and the end product — think Uber and how it uses vehicles as shared assets. 

IoT allows for a larger number of opportunities where intelligence can be monetized. The assumption is that IoT-embedded devices used in manufacturing or other operations can yield valuable information about how they are being used. These device manufacturers in turn can buy and leverage that intelligence to fine tune use cases and product capabilities.

A secure ecosystem for IoT

To facilitate such sharing of intelligence, enterprises need to enable external entities to dip in and out of the information data pool that IoT generates. 

The enterprise needs to build an ecosystem comprising the following building blocks:

  • Enable access to the intelligence through an application programming interface
  • Enable commercial transactions to facilitate data transfer

While the idea of information monetization is a tempting one, companies also need to ensure that they’re maintaining a strict firewall around proprietary data, allowing only authorized packets to be shared.

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This is where blockchain can be useful. “Blockchain introduces trust,” says Jagmeet Singh, Director, Connected Products, at Cognizant. Think of blockchain as a ledger of information points where each data point is linked to the previous set in a series, creating a chain. The handy aspects of blockchain technology is that it always points to a single source of truth. Data cannot be altered, only added to. Such powerful encryption makes blockchain technology especially useful to deploy in conjunction with IoT devices. 

Instead of having to authenticate each transaction, blockchain can be used at scale to make authentication of partners much easier and faster, Singh says. “Now that you have established trust between devices, the speed of granting permissions to access needed data can be faster. You don’t have to go through authentication very time you make a call to a new device for transmission of data,” he adds.

Singh cautions that IoT embrace of blockchain is still not a reality. Stumbling blocks include the difficulties in bringing together different stakeholders with varying objectives. “You have to clearly articulate what the development infrastructure is going to look like, you have to navigate compliance issues,” Singh says. 

Blockchain introduces trust (and therefore, security) and transparency into the IoT equation, thereby enabling operations intelligence at scale, Singh says. Enterprises are evaluating which IoT-enabled assets might participate in such a new shared economy and what the infrastructure for such a system might look like. 

[Download]: Real Estate Manager Goes Digital

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How to accelerate business change using data and AI

AI poses as many challenges as opportunities. Here are a few common characteristics we’ve seen among businesses that have realized success with data and AI.

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By Bret Greenstein

Most senior leaders would agree that adapting in real time to customer and market needs is vital for achieving their visions and goals. And to develop this capability, they’d also likely agree they need data and artificial intelligence (AI).

The examples are all around us. The city of Chicago uses 12 variables, including high daily temperatures, to prioritize which of the city’s 7,000 “high-risk” restaurants it should send its 35 food inspectors to. The AI solution found violations a week earlier than they otherwise would have.

We helped an insurer create an AI system that provides underwriters with more precise estimates of risk, as well as the likelihood applicants will accept a specific price quote. The insurer can adjust how the AI environment makes its approval and pricing recommendations to ensure compliance with changing corporate priorities around risk vs. revenue.

We’ve also seen AI help predict customers’ emerging needs as markets change. If the economy goes into a recession, informed analysis could help organizations not only cut costs but also provide the products and services customers might need in a downturn.

And, of course, there are the businesses that have used data and AI to create new revenue streams and business models that drive lasting competitive advantage. For game changers like Uber, data is at the core of the company and constitutes value, not cost.

Facing up to AI realities

But there’s another hard fact that would draw consensus from many business leaders today: the unprecedented effort required to move an enterprise in an AI direction. The fact is, AI-enabled business change requires as much alteration to corporate culture, organizational structures and processes, and workforce roles and skills as it does new technology.

For example, too many organizations still treat data as an expense and a security risk. Technical or organizational siloes make it difficult to pool information in flexible data lakes. Many businesses also lack the skills to manage AI-enabled analytics amid rising privacy and ethical concerns. Others are unable to provide audit trails on how AI decisions were made or deliver AI-enabled analytics quickly enough.

AI success factors

Here are a few common characteristics we’ve seen among businesses that have realized success with data and AI:

  • Senior leadership is passionate about the value of data. CIOs can play a big role here. They need to work with the CEO and business leaders to resolve the tension between business managers who want more access to data and the pressure to restrict such access to reduce cost and risk.
  • Data scientists embedded with business users. By working more closely with business users, data scientists can better understand the business context behind their requests. Business managers may say they need “X,” but what they really need is a solution to a problem, which may or may not be “X.”
  • The establishment of an AI oversight role. Because AI systems learn and improve, they can produce different results at different times based on the data they’re given and the algorithms applied. This means they require closer oversight than traditional systems that are coded, tested and summarily released – and then left alone.In some ways, managing an AI system is like raising a child. You need to be sure they’re not being trained with intentionally or unintentionally biased data or by malicious users. If a loan application is denied, for example, you need to know the decision was ethically sound.
  • Plenty of high-quality data. The more high-quality data, the better and more quickly the AI system can learn. To supply that data, organizations must refine their processes for ongoing data preparation, integration and pipelining. This essential groundwork is the hardest part in building an AI system.
  • Modernized infrastructure. An infrastructure based on application programming interfaces (APIs) and Agile development techniques makes it easier to quickly deliver new AI-based applications. This more flexible infrastructure enables organizations to better access needed data from outside the enterprise, and more effectively monetize the resulting insights by sharing them across the ecosystem.For instance, we worked with one of the world’s largest and busiest airports to revamp its technology infrastructure to increase airport efficiency and performance. The organization combined data and AI to unlock more capacity to serve airlines and reduce passenger misconnects.

Our final recommendation: Start now. AI can be difficult and complex, and it’s hard to catch up once you’ve fallen behind. Even modest successes will teach you a lot, and the real danger in digital is being a laggard.

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Financial Services

How BMO branch technology saves employees up to 30 minutes per day

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When it comes to banking, it comes as little surprise that customers are increasingly preferring tellerless interactions. 

A recent customer insight report from Mercator Advisory Group found that those who don’t like using mobile and online banking prefer to use self-service kiosks at physical branch locations.

Even back in 2015, a study by Source Technologies found that self-service retail banking kiosks improve operations, “reducing the time it takes to get an official check from nine minutes (using a teller) to 40 seconds – 13.5 times faster than a teller-conducted transaction.”

When banks invest in features like remote authentication and mobile deposits, it isn’t just customers who benefit — staff are able to better focus on more complex transactions, and developing relationships with clients.

“We see that more and more of our customers are migrating toward self-serve interactions, especially for the simpler, straightforward transactions,” explained Kyle Barnett, BMO’s chief operating officer for US personal and business banking, in an interview with PYMNTS. 

One of technologies implemented by BMO was a faster, real-time process for scanning and depositing cheques, saving customers from having to fill out a paper deposit slip. This has led to deposits clearing within hours instead of days. 

Another BMO implementation was its easy PIN authentication; instead of using a driver’s licenses or state-issued ID, customers use debit cards to verify their identities. The transaction is therefore accelerated, and data is aggregated instantly on the teller’s screen.

Both of these improvements were implemented in more than 500 branches by the end of 2019.

“If a customer walks in and opens up an account [during the] same interaction, they can actually leave with a fully functioning, embossed card that has their name on it,” Barnett said. 

And unlike before, when a customer was issued a temporary card and had to wait for the fully-functioning replacement to arrive in the mail, “they also get the PIN right there as part of the account opening, and can even set up a custom PIN if they want at the ATM.”

With the in-branch experience changing, and customers requiring fewer interactions with tellers, the result has been “really freeing up our branch bankers to have more time to dedicate to customers, and have better holistic conversations, and create more personalized recommendations.” 

One case study found that employees have saved between 15 and 30 minutes per day on processing forms. Multiply that by the number of employees within BMO, and you get a major win for efficiency and time saving. 

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Addressing cybercrime with passwordless authentication

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Cybercrime costs the global economy $2.9 million every minute, according to a RiskIQ report titled The Evil Internet Minute, adding up to $1.5 trillion in a year.

The cause? 80% of attacks are password-related issues.

Just think: How many times have you been prompted to change your password by your bank or email company? How many times have you heard the term “data breach” in the news? How many accounts do you have that require two-step authentication? How many passwords do you have, scattered across various accounts?

PINs, passwords, security questions are a daily part of our lives, but it’s typically nothing more than a hassle when we have to change them. For larger organizations, however, costs add up. Estimates show that nearly 50 percent of IT help desk costs are allocated to password resets.

Enter: Passwordless authentication — harnessing the power of technologies like AI and Machine Learning to save time and money.  

Cyber security is high on the World Economic Forum’s agenda, and in collaboration with open industry association FIDO Alliance, WEF’s whitepaper Passwordless Authentication The next breakthrough in secure digital transformation presents a framework for future authentication systems, illustrating five key passwordless technologies organizations can implement.

As part of Davos 2020, the paper — featuring lead authors Andrew Shikiar (Executive Director and Chief Marketing Officer, FIDO Alliance) and Adrien Ogee (Project Lead, Platform for Shaping the Future of Cybersecurity and Digital Trust, World Economic Forum) — outlines that “passwords are indeed at the heart of the data breach problem,” and presents facial biometric technology, hardware keys, and even QR codes and behavioural analysis as the future of passwordless authentication. 

“While company adoption of platform businesses is increasingly driving business valuation and growth, the problem of digital trust is growing equally fast and eroding confidence across online communities,” explains the introduction.

“Security enhancement is a continuous process, there is no magic bullet. Cyber criminals will adapt and develop new means of attack, but the alternative authentication mechanisms presented here provide greater challenge to them and greater security in the foreseeable future.”

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