The Internet of Things and How to Manage Data ... The Challenge Looms
Data lakes may help to tackle the IoT challenge.
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The Internet of Things. Big Data. Data Lakes. We've written a fair amount about these topics.
Earlier this year I wrote a story about the Internet of Things. In the November issue of Waters my feature will look at the growing popularity of data lakes in the capital markets. And big data ─ a term that has grown somewhat tired, though most everyone understands it ─ seems to touch on every topic in the fintech world.
When writing about data lakes and how they differ from data warehouses ─ and why they should be used in combination with data warehouses, and aren't opposed to data warehouses ─ the topic of IoT jumped to my mind.
Data lakes are used to take in massive amounts of raw, ungoverned data. It's a repository of data that will either eventually be refined, and then used for any number of analytical purposes, or that will sit in the lake until a later date down the road when it might be needed. A data lake is a potential answer to the question: If I want to be able to gain value from the quandary of "big data", where do I start?
But data lakes aren't the only answer, and the fact is that the definition of data lakes is still evolving, as is the idea of how best to collect, store and analyze these huge datasets that are being created. IoT is only going to add stress to the challenges and needs that capital markets firms are facing today.
I find the Internet of Things to be a fascinating topic. The concept ─ where millions of devices or sensors are "communicating" with one another to automatically make something happen, or alert someone that something needs to happen ─ will categorically change the way that we use technology and what we will come to expect from technology.
As I tried to highlight with that feature in the July issue of Waters, capital markets firms aren't quite sure how to prepare for the promise of IoT. It's a big data play ─ at this time, banks aren't going to be investing in the actual devices and sensors of IoT ─ but there's a looming question as to how will they gain value from these mind-numbingly huge datasets that will be created in the years to come?
To put this in perspective, Cisco estimates that there will be 50 billion devices connected to the internet by 2020. Research firm IDC says that there will be 30 million IoT endpoints by 2020.
IBM says that 90 percent of all data generated by devices such as smartphones, tablets, connected vehicles and appliances is never analyzed or acted on. And as much as 60 percent of this data begins to lose value within milliseconds of being generated.
But as for the rest of it, it's a crazy-huge challenge that banks are desperate to get ahead of, because data will create the competitive advantage in the world to come as human touch becomes less important.
So I'd be interested to hear from you: What are the greatest challenges that you see developing for banks and asset managers as IoT takes greater form in the coming years? What's the potential? What are the pitfalls? And what investments can be made today to capture the potential of tomorrow?
Send me an email or give me a call (646-490-3973). I'd love to hear from you.
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