Risk management professionals’ awareness of the internet of things (IoT) is on the rise, although many are unaware of the specifics. According to this year’s Excellence in Risk Management survey from Guy Carpenter sister company, Marsh, and RIMS, 59 percent of respondents said their organization uses or plans to use IoT, although 25 percent were not aware of how it would be used. In 2017, 48% said their organization used or planned to use IoT technologies, despite outside statistics showing actual usage at about 90%.
At their core, IoT systems allow enterprises to make value-adding decisions in real-time, with increased flexibility regarding their approach to efficiency, cost reduction, and risk modification. Transportation companies, for example, regularly use IoT devices to monitor a vehicle’s location, the temperature of its cargo, the performance of its driver, and more.
“We track just about everything we can on a driver,” said the risk manager at a US trucking company. “We have cameras in all of our trucks. We have crash avoidance systems ... and we’ve built predictive analysis that accounts for all the data points and puts out a risk score for those drivers.”
IoT technologies are also used to simplify regulatory compliance — for example, sensors can control temperature in food storage areas and automatically generate compliance documents to help with required inspections. Organizations in many industries are finding that the data gathered from wearables is helping to refine safety programs and reduce workplace injuries.
It’s important to understand that IoT is a double-edged sword: It increases the loss potential from data security breaches as more sensitive data are being created and stored on networks. In addition, technologies that are not fully secured present the potential for manipulation of data and automated controls.