Fraud & risk

On the Internet of Things, no one knows you’re a fridge!

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The Internet of Things (IoT) has attracted enormous attention in recent years. In essence, the IoT is made up of sensors and activators connected by networks to computing systems. And, it’s likely to have a major impact on our lives and our economies. The McKinsey Global Institute predicts that linking the physical and digital worlds through devices in our homes, offices and cities could generate up to $11.1 trillion a year by 2025.

The IoT ranges from personal healthcare monitors to smart cities and industrial plant management. But, what are the risks and benefits of connecting our physical and virtual lives? And, what impact will these billions of interconnected devices have on the world of identity as we know it today?

How ‘new’ is the IoT anyway?

The ideas behind what has become known as the Internet of Things go back a surprisingly long way. In 1926, inventor and engineer Nikola Tesla stated:

When wireless is perfectly applied, the whole earth will be converted into a huge brain, which in fact it is, all things being particles of a real and rhythmic whole… and the instruments through which we shall be able to do this will be amazingly simple compared with our present telephone. A man will be able to carry one in his vest pocket.
Nikola Tesla, Inventor and Engineer, 1926

It took another 70 years for the term ‘Internet of Things’ to appear. In a presentation to Proctor & Gamble, Kevin Ashton, Executive Director of the Auto-ID Center at the Massachusetts Institute of Technology (MIT) argued that “radio frequency identification (RFID) tagged objects could be connected to the Internet (Editor’s note: a red-hot topic at that time) to improve operational efficiency across P&G’s entire supply chain”.

Today, the IoT is a familiar concept in business. Aruba, a Hewlett Packard Enterprise company, surveyed 3,100 corporate decision makers across 20 countries. The findings revealed that 85% of businesses expect to have a full IoT strategy by 2019. The primary use quoted was the remote monitoring of operations, including energy use and asset tracking.

It’s getting personal

From an identity perspective, what happens when the Internet of Things crosses over into our homes and personal lives? We’re already familiar with WiFi-enabled voice sensors that speak directly to our favourite retailer. But what about the wireless kettle that recognises that our favourite TV programme is over and is ready with a hot drink? It’s not uncommon to see remote healthcare activated by sensors and wellness monitors but what about wearables that can ‘talk’ to one another? Our clothes could become indicators of our identity, transmitting information about our health, location, interests or aspirations.

We all have a responsibility to consider how we protect our privacy – and our identity – over the Internet of Things.

There’s such a thing as over-sharing

We know that our world isn’t going to become less connected. Consumer demand for ‘always on’ service and an effortless experience isn’t going to diminish. The IoT can enable this but there is growing concern over the lack of understanding among users and business leaders about how we secure not just devices, but the data they produce.

As more devices become Internet enabled, we open up increased access to our home networks. There’s a danger of offering criminal gangs or opportunistic fraudsters an easy way in. We all have a responsibility to consider how we protect our privacy – and our identity – over the IoT.

Who pays the price?

We’ve become used to the financial implications of identity theft. As a result, we’re likely to be less concerned over the loss of a credit card or a fraudulent transaction on a bank account. The banks or credit card company accept the liability – and on we go. But who’s responsible if criminals steal highly personal data by accessing our networks through wireless-enabled light bulbs or the latest smart fridge?

Worse still, what if the light bulbs themselves are hacking us on behalf of rogue operators? To quote David Birch, Director at electronic transactions specialists, Consult Hyperion: “If my toaster takes down PayPal, I don’t care – and neither will the people who made the toaster”.

Data, data everywhere

Digitisation generates more and more data but companies find it increasingly difficult to extract meaningful intelligence from it. So, they simply continue to stockpile it and increase their exposure to the risk of a breach.

While GDPR may change some behaviours, we need innovation and disruption around capturing and verifying identity data. The challenge lies in understanding what's being generated and identifying what's required to conduct any particular transaction safely. Organisations behind review websites, like Yelp or TripAdvisor, don’t need to know a guest’s personal data. They just need to know that they were a genuine customer. The same applies to adult websites. The site operator doesn’t actually need to know full personal details, just that the customer belongs to a category of people who meet the required age criteria.

The answer may lie in new technologies, like blockchain. In an earlier edition of Inside, we explored how blockchain could be used to keep information private by storing personal data and identity attributes across multiple, dispersed ledgers on the Internet.

And this is just the start

Companies that use IoT technology will play a critical role in developing the right systems and processes to maximise its value. The digitisation of machines, vehicles, and other elements of the physical world is a powerful concept. Even at this early stage, the IoT is starting to have a real impact on our lives. It's changing how goods are made and distributed, how services are delivered and refined, and how doctors and patients manage health and wellness.

Achieving the IoT’s full potential will call for innovation in technologies and business models as well as investment in new capabilities and talent. New regulations are needed to encourage interoperability, ensure security, and protect privacy and property rights. With these in place, the Internet of Things can flourish, especially if business leaders truly embrace data-driven decision making.

The Internet of Things suggests futuristic images of connected homes and smart gadgets. In India, a digital network is monitoring a different kind of valuable asset: cows – often an important part of a household’s economic well being.

Across India thousands of cows are being allocated a unique 12-digit identification number. Each animal will be tagged with a small, tamper-proof RFID device. This catalogues name, birth date and biometric data like breed, colour and horn shape. The system can also monitor the cow’s health, milk output and reproductive history.

Owners can use their smartphone to access a tagged animal’s data from a central database which will enable them to manage the health of their livestock more efficiently.

Penalties for harming the revered animal are high and the programme aims to reduce illegal transportation and abuse of cows throughout India.

Pilot programmes for tagging and digitally identifying cattle have been under way in some areas for about a year. The Indian government looks poised to support a nationwide registration programme in the near term.

The push for bovine digital identity is part of a broader Digital India programme. Various ‘smart agriculture’ technologies have emerged in recent years. Chitale Dairy in Bhilawadi, for example, partnered with Dell on a ‘cows to cloud’ programme to increase milk yield. And one of India’s largest fertiliser companies has built a digital ID system for farmers to track and confirm fertiliser deliveries via mobile devices.[2]

[1] Thanks to David Birch of Consult Hyperion for the title
[2] This article was first published on the One World Identity blog

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