Cognitive Internet of Things?

Internet of Things (IoT) represents the extension and evolution of the Internet, which has great potential and prospects for modern intelligent service and applications. However the current IoT is still based on traditional static architectures and models by our deep investigation. It lacks enough intelligence and cannot comply with the increasing application performance requirements. By integrating cognition into IoT, we present a new concept of Cognitive Internet of Things (CIoT) and its corresponding intelligent architecture.

Most of the current offerings from several point solution vendors for Internet of Things (IoT) focusses on how to connect devices to see, hear, smell the physical world around and report the observations. However, I would argue that only connectivity and reporting is not enough but capability to learn, think and understand both physical, social and contextual data and apply intelligence is the key. This requirement drives us to develop a new model called “Cognitive” Internet of Things. What is Cognitive? It is more appropriate to refer to “cognition” as an “integrative field” rather than a “discipline” since the study on “cognition” integrates many fields that are rooted in neuroscience, cognitive science, computer science, mathematics, physics, and engineering, etc.

Cognitive computing is one of the most exciting developments in software technology in the past few years. Conceptually, cognitive computing focuses on enabling software models that simulate the human thought process. More specifically, cognitive computing enables capabilities that simulate functions of the human brain such as voice, speech, and vision analysis. From this perspective, cognitive computing is becoming an essential element to enable the next wave of data intelligence for mobile and IoT solutions. Text, vision, and speech are common sources of data used by mobile and IoT solutions.

As per IEEE, Cognitive Internet of Things is a new network paradigm, where (physical/virtual) things or objects are interconnected and behave as agents, with minimum human intervention, the things interact with each other following a context-aware perception-action cycle, use the methodology of understanding-by-building to learn from both the physical environment and social networks, store the learned semantic and/or knowledge in kinds of databases, and adapt themselves to changes or uncertainties via resource-efficient decision-making mechanisms, with two primary objectives in mind:

  • bridging the physical world (with objects, resources, etc) and the social world (with human demand, social behavior, etc), together with themselves to form an intelligent physical-cyber-social (iPCS) system;
  • enabling smart resource allocation, automatic network operation, and intelligent service provisioning

The development of IoT depends on dynamic technical innovations in a number of fields, from wireless sensors to nanotechnology. Without comprehensive cognitive capability, IoT is just like an awkward stegosaurus: all muscle, no brains. To fulfill its potential and deal with growing challenges, we must take the cognitive capability into consideration and empower IoT with high-level intelligence.

Blockchain use cases for FinTech/Insurance

The World Economic Forum published a report entitled, Deep Shift – Technology Tipping Points and Societal Impact. By 2025, 58% of these experts and executives believed we would hit the tipping point for Bitcoin and Blockchain. This was defined as – “10% of global gross domestic product will be stored on Blockchain technology”. Blockchain has the potential to improve the way insurers’ record risk, increasing the speed, accuracy and transparency of our processes. Blockchain offers a decentralized register of ownership by recording every transaction in the system, from creation of a block and through any number of transfers made. Every computer tapped into the system stores a copy of this Blockchain, and before a transaction can be made the system checks that their version of the Blockchain is in sync with all other versions in the network.

The potential applications of Blockchain technology stretch from wealth to health. Financial institutions, including Barclays and Allianz, are now considering how this technology could revolutionize financial services by tracking assets, automating processes and recording the transfer of value.

Blockchain use cases for Insurance

  • Smart Insurance Contract – Smart contracts powered by a Blockchain could provide customers and insurers with the means to manage claims in a transparent, responsive and irrefutable manner. Imagine an insurance policy where claims are paid automatically as soon as a loss occurs and without the need for a claims assessor. Contracts and claims could be recorded onto a Blockchain and validated by the network, ensuring only valid claims are paid. Insurance companies spend over several billions each year on fraud and compliance. There is tremendous use of Blockchain to improve the claims process. Claims-handling could become more efficient and streamlined, resulting in an improved customer experience.
  • Counter Fraud – Fraud is a very real problem for insurance companies. High value assets can be fraudulently registered as stolen, insurance companies pay out, and then the asset registered with a new insurer for the process to be repeated. By using Blockchain to create a decentralized ownership ledger for these high value assets, registered using certificate number and laser inscribed ID number on the diamond itself, it will be possible to recover these items once they resurface.
  • Online digital deal-rooms that could considerably modify the way business are conducted globally. Digital deal rooms will define how documents can be securely shared and logged. A Blockchain-based deal-room would strip out the need to trust an intermediary while providing an accurate record of the documents shared by the deal’s participants. It gives you a database that’s unalterable and nobody owns. It’s a ledger of who sent what to whom, when, forever. That’s an important part [of the insurance process
  • Piracy prevention of Digital Assets – Piracy can also be combatted by tracking ownership of digital assets. Current DRM technology often requires that a song you purchased from iTunes can only be played through an Apple device. By using a decentralized ledger for ownership of digital content the ownership of digital assets can be authenticated across platforms, and can be transferred securely to new parties when sold.
  • Peer to Peer insurance – Blockchain will also give rise to P2P insurance in which policyholders’ pool together, based on a sharing economy concept, and support each other financially in the event of any claim. But instead of a policy managed by people who process applications for new policies and applicants for new claims, the peer-to-peer insurance would only be managed by smart contract code, significantly reducing costs and expediting pay-out thereby significantly increase policyholder experience. Additionally, Lower operating costs are the biggest beneficiary for insurers.

The possibilities are endless and it is for the insurance companies to invest, explore and experiment with the different use cases. The regulatory compliance will also be a considerate issue which will get addressed in coming years.



Blockchain for Dummies!

Many companies are accepting bitcoins, many are not. Here is a list. These include Target, Tesla, Whole Foods, Microsoft, Home Depot, Intuit, Dell, PayPal/EBay, Sears, and many others.  With many companies accepting the change and others getting ready to, bitcoins are an extremely fast-spreading currency. The crypto-currencies have multiplied in the market place in recent years. QR codes are the biggest help in real-world bitcoin transfers. Using a smartphone and a Bitcoin wallet app, a user scans a label and presses a small buttoned aptly named “spend.”

Every transaction that happens between a buyer and seller or a transferor and transferee or between 2 members on the network, is verified and validated by “miners” to ensure it is secured and there is no risk of double spending. These miners are similar to VISA or MasterCard or Amex of the credit card world that provides a platform to exchange, validate and authorize. The miner creates a block of records which holds a copied record of all the verified transactions that have occurred in the network over the past ‘n’ minutes. Each transaction in every block is made at specific time and linked to previous block of transactions. Digital records are lumped together into “blocks” then bound together cryptographically and chronologically into a “chain” using complex mathematical algorithms. This encryption process, known as “hashing” is carried out by lots of different computers. If they all agree on the answer, each block receives a unique digital signature. The groups/chains of these blocks of transactions is referred to as Blockchain. The Blockchain is seen as the main technological innovation of Bitcoin, since it stands as proof of all the transactions on the network. Blockchain, or distributed ledger, technology is more secure, transparent, faster and less expensive than current financial systems. The distributed nature of a Blockchain database means that it’s harder for hackers to attack it – they would have to get access to every copy of the database simultaneously to be successful. It also keeps data secure and private because the hash cannot be converted back into the original data – it’s a one-way process.

In short, Blockchain is a method of recording data – a digital ledger of transactions, agreements, contracts – anything that needs to be independently recorded and verified as having happened. The big difference is that this ledger isn’t stored in one place, it’s distributed across several, hundreds or even thousands of computers around the world. In 2015, some of the leading financial institutions such as Visa, Goldman Sachs, Citi and other Wall Street incumbents joined venture capital firms to pour $488 million into the industry. In a World Economic Forum report released in September, “Deep Shift: Technology Tipping Points and Societal Impacts,” 58% of survey respondents said that they expected that by the year 2025, 10% of global gross domestic product will be stored on Blockchain technology. If banks started sharing data using a tailor-made version of Blockchain it could remove the need for middlemen, a lot of manual processing, and speed up transactions. If banks and other financial institutions are able to speed up transactions and take costs out of the system, it should mean cheaper, more efficient services for us.


Start your Internet of Things ‘IOT’ project

IDC estimates that as of the end of 2013, there were 9.1B IOT units installed. IDC expects the installed base of IOT units to grow at a 17.5% CAGR over the forecast period to 28.1 billion in 2020. The number of connected devices is growing at an astronomical rate these days as more and more manufacturers jump into the fray. From Nest thermostats to water sensors to connected home, it’s no surprise that firms like Morgan Stanley are predicting the number of connected IOT devices will approach 75 Billion by 2020. So what makes up this IOT market?

  • IOT Platforms
  • IOT Sensors – Connected Home, Connected Auto, Connected Work, Connected Life, Connected Consumer
  • IOT Devices, Monitors, Controls, etc.
  • IOT Applications and Mobile Apps
  • IOT Network and Connectivity
  • IOT Analytics
  • Social Business
  • Weather Data
  • Consumer data – Health, Locational, Interactions, etc.

But what does this all mean for the manufacturer? What do they need to consider when laying out their connected device strategy.

The IOT is still at an early stage; the connected market has started over a decade back to monitor and control every information from physical and social environments. In the past, most of these units were hardwired together into a complex system but with wireless connectivity, mobile/telematics, cloud, analytics, intelligence and other technology advancements, the birth of IOT took place. For example, the Nest Learning Thermostat performs the basic function of an ordinary smart thermostat: It monitors, adjusts and maintain as per predetermined configuration. But the Nest also senses humidity, activity, and light, and its built-in intelligence “learns” how and when the user likes to adjust the temperature. It can even optimize the house’s temperature for energy efficiency. All this, together, still doesn’t make the Nest part of the IOT. But when it’s connected to an insurance company or the Nest Account (hosted by Google, Nest’s parent company) through a home Wi-Fi network, it has far greater value. That connection allows people to monitor and change the temperature from their smartphones, modify the heating schedule, and analyze their home heating activity. It also allows insurance companies to offer incentives for precautionary and timely alerts preventing losses.

Organizations are now accumulating terabytes and petabytes of data from various devices – machine, mobile, user, web logs and cookies, social media, etc. The challenge is not in storing this information, but in actually using this data for competitive advantage. Organizations are rushing to store this wealth of information fearing missed opportunities. This takes us back to the key questions: what, where and how do I start?

The key to winning the race to competitive advantage is not by storing all or most of the data, but by deriving value and insight that can be tied to a business outcomes, ROI and profitability. Here are the high level steps I recommend to begin your big data journey:

  1. Identify business use cases tied to business outcomes, metrics and your IOT roadmap
  2. Identify business champions and sponsors of your organization that can lead the IOT as business initiative
  3. Select right set of people, processes, technology including platform, solutions for your IOT project
  4. Build a lab – IOT Lab that can prototype different solutions and integration points. Use point solutions for speed to market and cost considerations but plan to build or buy or rent the underlying IOT platform before the system becomes overly complex with many point solutions
  5. Be Agile. Execute your project/POC in sprints or short projects with tangible and measurable outcomes that either increases efficiency, enhance customer experience, reduces cost, prevent losses or increase revenue
  6. Plan for the security and privacy of the data. Consider and simulate the risk of data breach.
  7. Build on small successes and integrate with your data platform and operational applications that will empower your field sales and customer representatives to use the insight to delight your customers

This is a journey and not an end or a destination. Improvise your processes, technology and finally train your people as ‘Connected World’ is here to stay and grow.

The Big Data Institute – Top Ten 2016 Predictions

 customer experience predictions

Here are our predictions for 2016 that The Big Data Institute sees shaping your businesses:

1. Customer Digital Experience will take the center stage for companies competing to win mindshare and share of wallet. Majority of the customer transactions will be initiated through mobile platform – smart phones, tablets, phablets, wearable devices, etc

2. Analytics will become secret weapon for many companies with Big Data and Internet of Things projects on rapid rise. Data Management and Advanced Analytics will become more sophisticated but more business user friendly.

3. Privacy and Security will continue to be top priority for companies as consumers behavior and new laws will drive corporates towards compliance requirements.

4. Consumers will start monetizing their own data using various mediums.

5. Leadership ranks and roles will be transformed with primary corporate roles as – Chief Data Officer, Chief Analytics Officer and Chief Intelligence Officer becoming dominant roles driving IT and Business.

6. Artificial Intelligence, Robotics, Cognitive Computing will be at the top of Hype Curve as companies start exploring and piloting AI, cognitive solutions while Big Data and IOT move towards plateau.

7. M&A on the rise with several acquisitions in IOT, Digital/Mobile and Security solutions.

8. Cloud will become the new standard and will become first choice in many cases for platform.

9. Businesses making IT purchase decisions (solution, software, and project) will be on the rise. In some companies, IT may get decentralized to address the speed and agility requirements.

10. Industry will move more towards pre-packaged/prebuilt solutions include point solutions building towards transformation project instead of large in-house builds.

Internet of Things – a game changer in Insurance industry!

The “Internet of things” (IoT) is becoming an increasingly growing topic in industry forums and boardrooms. It’s a concept that not only has the potential to impact how business interact with consumer but also how consumer interacts with business and business to business. Gartner research reveals the Internet of Things (IoT) as one of the most active areas for innovation in many industries. IoT is a game changer for insurers that embrace and position itself to leverage it. These leaders stand to realize concrete business benefits including increased operating efficiencies, improved customer experience, better risk management, more profitable underwriting / pricing, fast / more accurate claims payout, and accelerated innovation in the traditional insurance transactions.   There are challenges ahead, but the payoff is expected to be substantial for both the insurers and their customers.

The Internet is evolving to connect people to physical things and also physical things to other physical things … all in real time. It’s becoming the Internet of Things (IoT): Billions of interconnected smart devices measuring, moving, and acting upon all the bits of data that make up daily life. As per IDC, 41% of decision makers surveyed say their organizations plan to collect and process IoT-related data close to the point of creation. By 2020, Internet of Things spending will rise to $3 trillion and nearly 30 billion devices. McKinsey estimates that the Internet of Things has a total potential economic impact of $3.9 trillion to $11.1 trillion per year in 2025.

Earlier this year, IBM made an announcement to invest $3B in Internet of Things over the next four years to help clients and ecosystem partners build IoT solutions. IBM now offers IOT solution on its Bluemix platform through cloud that can rapidly compose and extend apps that take advantage of data and analytics from your connected devices and sensors. IBM Internet of Things Foundation is a fully managed, cloud-hosted service that makes it simple to derive value from Internet of Things (IoT) devices.

In June, Microsoft struck a deal with American Family Insurance, the eighth-largest home insurer in the US, in which both companies will fund startups that want to put sensors into smart homes and smart cars for the purposes of “proactive protection. An insurance company would gladly subsidize the costs of installing yet another sensor in your house – as long as it can automatically alert the fire department or make front porch lights flash in case your smoke detector goes off.

Goldman Sach’s research report on the Internet of Things showed their focus on five key verticals where the IoT will be tested first: Connected Wearable Devices, Connected Cars, Connected Homes, Connected Cities, and the Industrial Internet.

Gartner - IOT

The cost of sensors, processing power, and bandwidth to connect devices has dropped low enough to spur widespread deployment. Innovative products like fitness trackers and Google’s Nest thermostats are demonstrating the potential for both consumers and enterprises. Connected Homes are perhaps the clearest next proving ground for the IoT, combining both the potential to spawn new lines of products and services in areas such as security cameras and kitchen appliances, and the chance to reduce energy use and costs through smart thermostats and HVAC systems.

Gartner Says By 2020, a Quarter Billion Connected Vehicles Will Enable New In-Vehicle Services and Automated Driving Capabilities. During the next five years, the proportion of new vehicles equipped with this capability will increase dramatically, making connected cars a major element of the Internet of Things (IoT). European officials have considered requiring all cars entering the European market to feature a built-in mechanism that allows the police to stop vehicles remotely. As both cars and roads get “smart,” they promise nearly perfect, real-time law enforcement. Instead of waiting for drivers to break the law, authorities can simply prevent the crime. In April, Apple patented technology that deploys sensors inside the smartphone to analyse if the car is moving and if the person using the phone is driving; if both conditions are met, it simply blocks the phone’s texting feature. Intel and Ford are working on Project Mobil – a face recognition system that, should it fail to recognise the face of the driver, would not only prevent the car being started but also send the picture to the car’s owner (bad news for teenagers). In the near future, Google will be the middleman standing between you and your fridge, you and your car, you and your rubbish bin, allowing the National Security Agency to satisfy its data addiction in bulk and via a single window.

In a survey of over 450 business and IT leaders, Gartner discovered that 40 percent were looking for the IoT to boost sales and cut costs for their organizations within three years. Less than a quarter of those polled had IoT leadership in place, in the form of either a single business units or multiple groups taking up the cause. Gartner’s data reveals that the IoT is very immature, and many organizations have only just started experimenting with it by adding IoT-enabled gear to their production environments. As per Gartner Research, successful IoT initiatives don’t have to fall squarely on the shoulders of a CIO or other top executive but it will be LOB led initiative from several business units.


  1. “The Internet of Things: Mapping the Value Beyond the Hype”, McKinsey Global Institute, June 2015
  2. “IDC MaturityScape Benchmark: Enterprise Mobility in the United States”, IDC, May 2015

Connected Home – Driving Innovation for P&C Insurance Carriers!

The connected car, home and lifestyle are driving innovation for the P&C and life Insurers. Sensors and Devices along with M2M communication is creating new business models for insurers. By 2016, the global connected home market is expected to reach $235B. P&C Insurance carriers are trying to find the right entry point in this complex ecosystem. As smart home technology evolves, insurers may have the opportunity to use real-time telemetric data for the assessment of risk and prevention of loss. Home automation or “smart home” technology is making inroads through popular consumer solutions and already provides opportunities for underwriters to recognize lower risk factors among customers. The smart home represents a significant market opportunity

  • Customer Retention and Cross Sell /Up Sell
  • Better risk management and loss prevention
  • Value Added services
    • Catastrophe Response and Alert
    • Preventive Care and Maintenance
    • Repair and Restoration Services
    • Home monitoring
  • Underwriting Optimization
  • Claims Optimization and Fraud Prevention

Most carriers are still in the early stages of IOT – smart Home market. Within the connected home, insurers are focused primarily on these different data sources

  • Home Security and Monitoring – Alarms, Smart Carpet, Video, Smart Door, etc
  • Utility Companies – Electricity, Gas, Water, Cable companies
  • External Weather – Flood, Hurricane, Tornadoes, Hails, Snow, Earthquake, Lightening, etc
  • Connected Appliances – Refrigerator, Oven, Microwave, Dishwasher, Washer-Dryers, etc
  • Solar Panels
  • Thermostats
  • Smoke and Fire
  • Smoke / Carbon Monoxide Detectors
  • Climate Control Systems
  • Pet Monitoring Systems

Both Google and Apple have moved aggressively into this space. The
market is in an early adoption phase and it is unclear which brands will win out. The market is breaking out from niche solutions for the wealthy, e.g. monitored security systems, to the mass market. Google’s Nest has established partnerships with American Family Insurance and Liberty Mutual Insurance to offset the costs of a Nest Protect smoke detector, and establish a monthly discount for homes that link their Nest smoke detectors to the insurance firms. The application and integration of these new data sources with underwriting and claims application will be bring tremendous value to insurance industry. The carriers will be looking for data aggregation platform that will provide the data mashup and services that can be consumed as API in their current application portfolio.

Consumers will likely see the connected home as a set of possibilities—expanded entertainment options, greater physical comfort, a connected lifestyle, and reduced risk—and use it to seek broad solutions to everyday tasks and big life events. As they embrace propositions that seamlessly combine these possibilities, consumers will blur existing market boundaries. Players such as AT&T are even linking connected car and smart home technologies so users can control their homes from a vehicle dashboard. Very soon like auto industries, very soon, home builders will offer smart home and integrated capabilities.

Compared to the connected car, the connected home is a less mature, less certain, and more complex insurance market. Carriers and telcos already have expanded from competing with security monitoring companies such as ADT into smart home offerings such as Comcast Xfinity Home, Time Warner Cable’s Intelligent Home, or Home by SFR in France. And AT&T’s Digital Life offering is building on open standards and protocols to integrate with products from many companies, not just their own.

A USA State of the Smart Home Report in May 2014 based on data from more than 900 U.S. adults, found that:

  • 86% ranked property loss protection as a top reason for a smart home system
  • 78% of consumers ranked energy management as one of the top features that matter most in the smart home
  • 67% ranked personal and family security as the number one reason for using a smart home system
  • 52% of pet owners listed pet monitoring as one of the top five most important reasons for using a smart home service

A 2013 report from Berg Insight estimates that North America is the most advanced region in the world for smart home solutions with an installed base of 3.5 million systems at the end of 2012. Between 2012 and 2017 the installed base is forecasted to grow at a compound annual growth rate of 55.0 percent to reach 31.4 million smart home systems.

The next logical step for insurers will be to move beyond knowing that devices are in place, to monitoring the data real-time from such devices. This would be similar to telematics from cars. Limited amount of private information will be expected in order to offer a premium discount. Premium discounts will not just depend on knowing a device is there, but on actual intelligence from the device. Insurers will also monitor use of the house to see if certain behaviors lead to increased risk. The insurance will be usage based like utility model. The monthly premium charged will in some cases become a variable figure, based on behavior that month and perceived risk incurred. This will incentivise the homeowner to modify home use, as has happened with car telematics.

In order to offer these products and services, either device data will need to become ‘open’ so that anyinsurer can use it, or insurers will need to forge strategic partnerships with major players in the connected home arena. If the former, customer loyalty and switching will be an issue. If the latter, picking the right partner will become key.

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