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Ahead of the Curve Auto Supplier
Blogs | April 7, 2015
3 minute read
Ahead of the Curve Auto Supplier

Privacy and the Internet of Things: Building Consumer Trust is Key to Marketing ‘Connected’ Vehicles

One of the hottest topics in technology these days is the so-called Internet of Things, or IoT. The concept is fairly simple: with the increasing accessibility of broadband Internet, the cost of connecting is decreasing, making it possible for our devices (or components of our devices) to connect to the Internet. Information collected from these devices can help improve the devices themselves and maybe improve how we work and live. Goldman Sachs calls it the next technology megatrend and predicts that, in the not-so-distant future, the Internet could be connected to as many as 28 billion “things” – cars, homes, cities, clothes, etc. By 2020, cars with built-in connectivity are expected to make up 90 percent of the market.

Many pundits talk about the advantages of the Internet of Things. For example, your vehicle could self-initiate a diagnostic test, determine that a part is failing, report the failure to the owner and maybe launch a program that schedules a repair appointment. The IoT may even help us create “smart cities” that, among other things, can report on traffic congestion, accidents, driving conditions and parking space availability to help drivers plan their daily commute.

Will consumers embrace the Internet of Things? Already, there is plenty of evidence they will. Smart phones already connect millions of people to the Internet nearly anywhere they travel and provide useful apps that rely on an individual’s specific location. Moreover, many people seem to see advantages in devices like the Fitbit, which can track progress toward meeting physical fitness goals by collecting information on an individual’s physical movements throughout the day and even how restfully the person sleeps at night.

In the auto industry, many analysts predict that the IoT will represent the biggest transformation in vehicles in a century, creating a seismic change in the way cars are manufactured, sold and used.

While the Internet of Things holds a great deal of promise, there are also many concerns as to whether these devices are secure. For example, “60 Minutes” recently ran a segment on how hackers could potentially wreak havoc with vehicle operating systems. Manufacturers have to get security right on these vehicles or consumers may not buy them. As evidenced by the National Institutes of Standards and Technology’s recent release of a discussion draft on a cyber-physical systems framework, many manufacturers are working very hard on this issue.  The auto industry has been at it for years.

Even if manufacturers appropriately secure these devices, they still need to win over consumers on privacy issues. For many people, the Internet of Things triggers concerns of invasive marketing and fears of “Big Brother” consumer surveillance, as reflected in recent articles about televisions with voice recognition and dolls that converse with children.

To avoid consumer backlash and regulatory penalties, companies that bring IoT devices to market need to establish trust with consumers. This means being transparent about the data each company collects, how the information will be used and with whom it will be shared. Burying these details in lengthy privacy policies and failing to offer meaningful choices on these issues won’t win over consumers. Moreover, successful companies connected to the Internet of Things must extensively train employees on their own privacy policies and procedures in order to prevent data leaks.

We may only realize the full potential of the Internet of Things if we pay attention to the very important privacy issues that concern consumers.