Constant Connection

It is difficult to deny that the world we live in is constantly connected. Since its’ revolutionary emergence in the mid-90’s, the Internet has created a web of interconnectivity that allows us to access information in nanoseconds, technologizing everything from health care, to education, and payment methods.

Now that the hype of Internet has subsided, and its’ ground-breaking effects have reverberated into mainstream conduct, it seems we are for the next big technological boom: The Internet of Things.

What is the Internet of things?

What exactly is the Internet of Things, (or IoT)? The Internet of Things pertains to a network of physical devices, vehicles, and home appliances embedded with network connectivity. This connectivity allows for the exchange of information and data, and accomplishes tasks through Internet usage. This essentially means that any device with an on and off switch can be connected to the Internet. It is estimated that IoT will connect nearly 25 billion devices by 2020 with a nearly $2 trillion global economic benefit.

The Internet of things blurs the lines between the physical world and computers, as human effort becomes less necessary and wireless networks carry out tasks with greater efficiency and accuracy than people. The application of IoT devices is far-reaching. From collecting information on natural ecosystems to interconnectivity of medical devices, there is virtually no realm that has been untouched by this new phenomenon.

From Smart Phones to Smart Homes

Who hasn’t experienced the panic of leaving the house and suddenly questioning whether or not you turned off the stove? The advent of smart homes has now made it possible to control everyday household activities from both inside outside the home. Smart homes are entirely connected, meaning that everything from activation of electronic devices, to monitoring inventory in the refrigerator is regulated by wireless activity that can be accessed by users on the go. This is made possible by, you guessed it, the Internet of Things.

Smart homes can eventually lead to greater ease in oversight of appliance usage and energy conservation. Thanks to IoT, homeowners can virtually detect whether a light has been left on in the home, and subsequently switch it off remotely. This eliminates the stress of inadvertently wasting energy and money. Smart refrigerators can even send photographs to the homeowner of the appliance’s contents so they can determine from afar what is missing and stock up.

The Internet of Things and FinTech

Because the Internet of Things is essentially a mega data network, and financial technology relies heavily on analyzing data, there is an undeniable connection between the two. According to Eyal Nachum, managing director of financial technology company, Moneta International-Banking Solution, “The moment that Fintech will penetrate into IoT, we will see a huge push forward and a dramatic shift in accessibility”.

If Homes equipped with IoT can track energy consumption, financial technology can allow customers to pay for their precise usage without accidentally accumulating high bills due to oversight and human error. This concept is called pay-by-use. Pay-by-use allows users to pay based on the exact amount of a product they consume, rather than paying large monthly bills that are based on excessive and unnecessary usage.

Pay-by–use is not just for the wealthy or tech-savvy, and could be especially useful for the elderly or disabled populations. Let’s take an example of a man with impaired memory who forgets to turn off the air conditioning in the summer. Through IoT, he can be alerted to turn off the air, reducing the amount of energy being wasted, and therefore, lowering his monthly electricity bill.

Pay-by-use may also increase the quality of energy services being provided by associated companies. If the provider is aware that they will only receive revenue based on the high quality of service they provide, rather than profiting off of the negligence of excessive consumption, they will be more inclined to provide more accurate and thorough service.

The Internet of Things could just be the next big revolution. With its profound applications and far-reaching benefits, it has the capacity to change the way we live. There is almost no realm that has been unaffected by IoT, including Fintech. The next challenge is to make this technology accessible, so that like smart phones, we can all reap the benefits.