After the stupendous rise of Internet of Things (IoT) through 2015 and 2016, what does 2017 hold for this technology?
#1 IoT set to change the business models
IoT technologies are no longer limited to predictive maintenance or as a tool for additional efficiency, they have grown in sophistication. In 2017, the IoT is in for a major shift in terms of business model. Previously, it was only based on the provision of products, but in 2017 it may base itself on offering of services. It will also take up a profit sharing approach in B2B transactions, especially in the context of Industry 4.0 technologies.
In all probability, this shift will lead to new legal issues, since IoT sensors collect a colossal amount of information about customers’ personal data, as also trade secrets and confidential information of businesses. The legal issues may pertain to data protection, intellectual property, cyber security, and product liability.
#2 IoT technologies to the rescue of banks and insurance companies
Today, if banks and insurance companies are to survive, they cannot ignore connectivity, telematics, and digitization. For them, it is no longer an option, since innovation is the order of the day. FinTech and InsuranceTech may not be enough, the need now is to expeditiously bring the whole company into this mode.
IoT needs to be a collective effort through partnerships that facilitate inter-operability between technologies of various suppliers. The risk of compromising cyber security is always present. So, this makes cyber security policy and cyber risk procedure indispensable. It would also require implementation of a privacy by design approach and the performance of privacy impact assessment.
New legal issues are expected when FinTech and InsuranceTech meet IoT technologies. At present, banks and insurance companies delay addressing these issues. This puts added pressure on their legal department that finds itself out of its ‘comfort zone’. The management and the legal department need to work in tandem.
#3 Privacy by design will protect IoT businesses
New risks arise from EU General Data Protection Regulation on IoT technologies with regard to allocation of responsibilities between different parties involved and the regulatory obligations. Although it is difficult to remain 100% protected from potential cyber risks, the onus of proving compliance rests with the investigated party.
Both privacy by design approach and privacy impact assessment work towards putting businesses in a safe position due to the applicable data protection. However, it requires continuous review that not only includes new services and functionalities, but also development of technologies and security requirements.
The matter gets complicated with the usage of artificial intelligence technologies. The issues likely to be raked up are not only data protection and liability issues, but ethical ones too.
#4 Tussle for data ownership is likely for Industry 4.0 technologies
The value of data is slowly dawning on companies since this entails identifying techniques to preserve their value for business and at the same time ensure privacy compliance. The data generated by Industrial IoT technologies has led the suppliers and exploiters of these technologies to assess the best placed legal basis to protect its data. Fights over who owns the data generated by using Industry 4.0 technologies are inevitable.
In the light of European regulators plans to expand data protection and copyright regulations for covering what is generated or collected by IoT technologies, the question still remains whether it is more relevant to keep control on the data or have it aggregated to big data for ultimately gaining a better service. The answer to this question will be eagerly sought in the year 2017.
#5 Market may remain hesitant in accepting blockchain, an IoT resource
Although blockchain has proved useful in exploiting IoT devices, there are considerable concerns about its usage, due to BitCoin receiving negative publicity. Companies remain hesitant in shouldering the risks as they fear that the technology might get out of control of its exploiters. This will lead to the question of allocation of the relevant responsibilities. 2017 may be the year in which the adoption of ‘closed’ blockchains obviate the high level of security ensured by an open blockchain.