The Internet of Things (IoT), a growing network of connected ‘things’ that can collect and exchange data using sensors, has revolutionised the way in which we do business, interact with our consumers, travel, eat out, and, in general, just get things going in our daily lives. According to BI Intelligence’s Global IoT Executive Survey 2017, the number of IoT devices are expected to go up to 22.6 billion in 2021, from 6.6 billion in 2016.

 

The more immediate way that IoT will affect each of us will be through the special group of devices now collectively referred to as “smart home” applications. From security monitoring devices to smart switches, beds, fridges, entertainment systems and even a smart laundry machine that folds your clothes, the range of devices that were introduced for your home, at this year’s Consumer Electronics Show 2017, at Las Vegas, was astounding. Let’s take a look at how these devices are transforming the way we live:

 

Energy-conscious living

 

Convenience is the key word when it comes to smart home and IoT. But it is also instilling and encouraging a new style of energy-conscious living among us. For instance:

· Remote access lighting that can be programmed to fit your mood, Wi-Fi enabled thermostats that regulate the temperature at home, or HVAC (Heating, Ventilation & Air-Conditioning) control systems that use sensors to turn lights and devices off when no one is in a room.

· With devices like Nest Learning Thermostat, one can automatically adjust temperatures in the house using location information and far-field sensors.

· Remember that time you fretted about whether you had switched off the stove, iron or toaster just as you got out of home? Smart plugs that are connected to your smartphones will come to your rescue now by letting you know exactly what devices are on and running, and what’s more, they can even be remotely switched off.

Although the aim is to conserve energy and save costs in the long run, most IoT devices in this category are priced steeply as they are just entering the market.

 

Enhanced home security

 

Smart home devices also protects you and your family from unwanted intruders. Smart locks are not just about remotely locking or unlocking doors without physical keys, they also allow you to track who is entering and exiting your house and report unfamiliar or suspicious activity. Like hotel room locks, digital keys can be issued to your kids, guests or trusted handymen who wouldn’t have to wait for you to leave work and be present physically to open the door for them. These features go a long way in being able to enter with ease at times of unforeseen events like medical emergencies.

 

Predictive maintenance

 

Every device needs maintenance and repairs at different points in its lifetime. With IoT technologies, we can now reduce the downtime in our devices and maximise their efficiency by knowing exactly when each device at our homes needs to be mended. Smart home devices use data to keep track of the wear and tear or damage that every device goes through and predicts its maintenance cycle. According to a study conducted by the US Department of Energy, predictive maintenance can reduce energy and maintenance costs by up to 30 per cent, eliminate breakdowns up to 40 per cent and reduce downtime by up to 75 per cent. By optimising a device, the energy it consumes can also be cut by 20 to 25 per cent.

 

Centralised automation

 

Now, what if we could control all these devices just by speaking to one master robot? For many of you, this may not come as surprise because Amazon Echo and it’s voice-activated assistant Alexa have been the talk of the town lately. You can connect all your smart home gadgets to Echo and manage them using voice instructions given to Alexa. Similar products are available by many other service providers like Google Home, Apple HomeKit and most recently Wink. All these devices are geared towards user convenience, comfort and energy efficiency.

 

Now for the downside!

 

Although all this may seem like a leaf out of a thrilling sci-fi book, these devices are not without its complications. The main problem? Security concerns. We will need heavy-duty technological infrastructure in order to manage the huge amounts of data collected from IoT devices and to ensure that they are not misused or tampered with. The other barrier that I see as of now is the high cost, which, I hope, should be pushed down with more affordable technologies and increasing scale of production owing to growing popularity of such devices.

 

Smart homes represent just a microcosm of how the IoT devices can revolutionise our lives. This can be used as a blueprint to scale this revolution up to smart cities and the like in the near future. The aim of technology is to make life easier and the beauty of IoT is that it makes this possible as seamlessly as ever.

 

References:

1. https://phys.org/news/2012-10-smart-technology-energy-home.html

2. http://www.businessinsider.com/internet-of-things-smart-home-automation-2016-8

3. http://www.businessinsider.com/the-us-smart-home-market-report-adoption-forecasts-top-products-and-the-cost-

and-fragmentation-problems-that-could-hinder-growth-2015-9

4. http://www.econais.com/applications/smart-home-applications/

5. http://www.greenpeak.com/Application/SmartHome.html

6. http://www.computerworld.com/article/2490360/consumerization/the-internet-of-things-at-home–why-we-

should-pay-attention.html

7. http://www.cypress.com/blog/internet-things-iot/home-smart-home-how-wiced-will-change-way-we-live

8. http://insurance.safeco.com/news/how-smart-homes-are-changing-the-way-we-live/

9. http://www.curbed.com/2017/1/12/14219800/smart-home-tech-ces-2017-trends

10. https://www.techuk.org/insights/news/item/10020-ces-show-report-part-3-the-smart-home-virtual-reality-and-drones

What could be the ‘Word of the Year’?

 

Demonetization.

 

From the addas of Kolkata to the high-end hotels of Mumbai, from my driver in Kochi to the Uber driver I met in Chennai, the discussion centered on one and only topic – how the high denomination cash ban is going to affect our economy.  The media too has been replete with stories of migrant laborers losing their jobs, and hotels reporting record cancellations.

 

In the midst of all these developments, a few companies, or rather financial startups, were seen having all the fun. Mobile wallets like Paytm, Mobikwik and Freecharge recorded all-time high transactions through its wallets. Vijay Shekhar Sharma, founder of Paytm, sold one percent of his stake in the company for a whopping Rs. 325 crore.

 

And I have had some exciting conversations too in the midst of all these developments. Over the last fortnight or so, many prospective entrepreneurs wrote to me asking whether they too can jump onto the fintech bandwagon. After brainstorming with some of them, here are three guidelines or trends that we need to keep in mind about the fintech industry:

 

 

1. Fintech is not just mobile wallets

 

Yes, this is what most people think. However, that is not the case. From alternative lending to crowdfunding, and enterprise finance to foreign exchange, there are around 11 broad categories of fintech companies (excluding cryptocurrency sector, whose legality is still being debated). So, if you want to start up in the fintech sector, find out where yours and your team’s strength lies. For instance, if your core team’s prowess is in programming, you could think of a startup in software for institutional investors or investment tech or banking tech.

 

Two good friends of mine do a roaring business in banking tech. Almost a decade back, they realized that core banking software solutions (CBS) developed by software majors were either too pricey for small banks or weren’t customized to their needs. With their rich experience in banking sector, they developed a CBS tailored to meet the needs of co-operative banks. And today, they claim that their solution is used by more than 200 co-operative banks in Kerala.

 

1. Fintech is here to stay

 

The potential of fintech market is growing exponentially, and has not been restricted to a year or so.

 

The Indian fintech market is forecasted to reach  $2.4 bn by 2020 from the current $1.2 bn, as per NASSCOM estimates.

 

Increasing smartphone penetration, easy availability of credit, burgeoning e-com sales and Government policies incentivizing card/wallet payments are set to further increase the absorption of fintech in India.

 

1. Is your fintech idea unique?

To illustrate, if you are planning another mobile wallet with almost the same set of features as your competitors, it will be hard to get a footing. There are a lot of well-entrenched mobile wallet players in the market who are heavily funded. And their marketing strategy is mostly focused on discounts and cash backs. So for a new entrant in the mobile wallet space, there will have to be unique partnerships, enormously simpler user experience, highly differentiated value proposition, and of course huge cash reserves to create the brand/market. In essence, you will have to research and find a unique pain that needs to be addressed rather urgently to be successful.

 

Take for instance, the Kochi-based startup Spenwise. The company is developing a prototype that will help parents provide a debit card to children, wherein the parents can decide as to where the debit cards can be used. In other words, it’s a parent-monitored debit card for children. The debit card market is a highly crowded one for sure. However, Spenwise team’s idea is unique and designed to reach an audience not much catered by the current set of players.

 

A year back, I wrote a blog for ‘Business Standard’ detailing the things one should evaluate before taking the entrepreneurial plunge. Fintech or not, these basic rules still apply.

 

Before I wind up, here are a few fintech sectors that will have a lot of potential in the years to come:

 

Peer to Peer (P2P) Lending

 

These are mostly online platforms which connect individual investors with borrowers in need for financing. In other words, it is a matchmaking site for loans.

 

The global market for P2P lending is expected to grow to USD 1 trillion by 2025. Even though India-specific growth figures are unavailable, I believe that close to 60 mn small businesses in the country will lead the demand for P2P lending.

Financial Inclusion

 

Recently, I read about the success of the startup, Novopay. In just 2 years, the startup has managed to serve close to 5 lakh customers. The reason for the runaway success – a unique idea in the financial inclusion space. Novopay helps migrant laborers and daily wagers electronically transfer money to their families back home.

 

So, if you have an innovative solution in the financial inclusion space (remittances, direct benefit transfers, digital identity, aadhar-enabled KYC, microfinance and so on), you have a fortune waiting for you.

 

Cyber Security

 

Cyber attacks are increasing by the day, and so are investments in cyber security. The global cyber security market is estimated to be $175 bn by 2020. So, if you are planning to start up in fraud detection solutions, iris/ voice/ visual/ fingerprint recognition services and e-KYC products, expect double digit growth rate in a few years.

 

Do you have any innovative ideas in the fintech space? I’m all ears. Tweet to me @kmukund7 or write to me at hello@mukundkrishna.com.

 

Reference

http://economictimes.indiatimes.com/small-biz/money/paytm-founder-vijay-shekhar-sharma-raises-rs-325-crore-by-selling-1-stake/articleshow/55886819.cms

https://assets.kpmg.com/content/dam/kpmg/pdf/2016/06/FinTech-new.pdf