Next step in fintech innovation? Motor banking. Financial institutions are looking to add a payment functionality to cars, as more manufacturers are equipping automobiles with Internet access and they have seen the value in what this could mean for business in the future. bobsguide spoke to Alexander Nicholson, Co-Founder and Managing Director of AutoTrip about how fintech will move into the connected car industry and what risks there are to be expected.
Could you give a brief explanation of your company and its position on fintech?
Designed as a connected cars product, AutoTrip is a digital business mileage expensing service. In this sense, AutoTrip provides a type of fintech, designed for accountants and business advisors. It works in a similar way to products like Xero and KashFlow, applying an innovative, cloud-based approach to managing a significant proportion of an organisation’s cost base. 20 to 40% of mileage data is thought to be inaccurate and processing time adds significant costs and delays. By making this process more accurate and efficient, digitising mileage opens up a raft of possibilities for companies. Not least of these would be a more streamlined process, saving resources and allowing for resources to go where better used.
Do financial professionals currently use connected cars and which industries is it excelling in?
Almost everyone is already using connected car technology. It’s the most visible part of the Internet of Things. In fact, many of today’s cars have the computing power of 20 or more personal computers, featuring over 100 million lines of programming code and processing up to 30 gigabytes of data every hour. This is used throughout our day-to-day driving, from information regarding traffic to Bluetooth connectivity with our phones. Financial professionals are beginning to use this technology, particularly accountants and financiers interested in streamlining corporate fleets.
How secure are connected cars and how long before we see them being hacked?
Research into the security of car technology has been ongoing for at least five years already. There’s a lot of fear-driven hype around the potential for smart cars to be hacked, leading to brakes being ‘switched off’ or on-board security breached, but research currently shows that much of this leads back to relatively impractical methods – with remote access being far from easy. However, as Nissan’s Leaf app has proven, it’s not impossible. This highlights why manufacturers need to protect against all potential threats even those that seem unlikely.
What will be more important is the protection of data collected from the connected car. There’s a huge amount of information attached to our car usage – how fast we drive, how well we drive, how efficiently we drive, not to mention where we go and what we listen to. Whilst collected data will lead to better safety and customisation features, it also needs to be impersonalised when its gathered – unless otherwise specified, such as for insurance purposes. Moreover, in corporate situations, there needs to be legislation to protect personal data from business data.
Should we have the same worries about this new technology as we do for artificial intelligence?
This is an interesting question. Artificial intelligence has underpinned much of the research and development of autonomous and driverless vehicles. However, there’s a huge amount of machine learning to do before cars can fully understand the minute shifts in road conditions but it is developing. In all likelihood, this will start to come of age in the next few years. It will not take away from our driving experiences but augment it, helping with well-being, efficiency and time management.
One of the primary worries about artificial intelligence that has recurred over the last year or so has been the idea that it will take over jobs, replacing people with algorithms. With connected cars, this is not so much the case. We will likely end up as hybrid drivers – using connected technology as well as our own driving knowledge to get from place to place. The technology will be more about expanding and creating multiple options in order to complete these journeys, i.e. through cars, e-bikes, etc. Moreover, the idea behind much of the technology for businesses is to enhance the driving experience and increase productivity whilst travelling. Journeys will become faster, safer, more economical, and allow to driver to complete additional tasks whilst on the road.
Is this the next best step for IoT to take?
It is absolutely one of the most interesting areas for the development of the Internet of Things. Connected cars are a big industry already and it’s only expected to grow, from €13bn in 2012 to €122.61bn by 2021. Indeed, an estimated 80% of all mileage reclaims will be automated within 10 years as a result of connected vehicles and it is reasonable to argue that all cars will be fully connected by 2030.
What does the future hold for IoT in finance?
The Internet of Things is unstoppable. It will continue to grow. In finance, it has the potential to be as transformational as when the Web first went up. As many have pointed out, key developments will be in identification, authentication, instrumentation for risk management, and payments. Building new financial products for consumers on the basis of these things will mean all sorts of services can be improved. There will, however, remain a need for awareness when it comes to the safekeeping of key datasets, especially as the technology becomes an increasingly mainstream part of our financial lives.
Ultimately, the Internet of Things is about machines dealing with machines, M2M. This removes the need for human input, and indeed error, therefore allowing for a more affordable and efficient systems to be provided. Innovation will therefore be key in finance, particularly its infrastructure which needs to become more compatible with the Internet of Things. Arguably, this is why the Internet of Cars is so exciting for the motoring industry – change is already happening with increased connectivity speeding transport innovation and mobility financing into the future.