How the IoT Helps Business with Regulatory Compliance
Most stories that involve the Internet of Things and regulatory compliance are about regulating the IoT itself. But it’s worth focusing on how the IoT will help businesses, particularly smaller businesses, to demonstrate compliance with the mass of regulations that govern their operations—regulations that vary from jurisdiction to jurisdiction. Compliance costs are a significant expense for every business, requiring trained staff and constant attention, and the burden is only going to get worse.
The visionary technical people that bring us IoT innovations perhaps don’t hang out enough with the back-office types that worry about the costs of regulatory compliance, insurance, and litigation prevention. Because, while there are many benefits to having a clear view of a supply chain, from efficiency to preventive maintenance, a potentially key benefit is the ability to monitor compliance with government regulations, insurance requirements, and conditions that could lead to tort actions.
This may not seem exciting. On other hand, before you can accomplish something exciting, you have to stay in business. Reducing these costs, both in terms of mandatory paperwork and in terms of staying out of hearings, courtrooms, and discovery procedures, is essential to business survival and success. The benefits will be particularly great for small and medium-sized businesses, which face many of the same risks as larger businesses, but have significantly smaller resources.
By providing what is essentially a digital audit trail with precise timestamps, the IoT removes ambiguity, clarifies timeless, and serves as the foundation for prompt and accurate reporting.
Four examples will show how many different businesses can use IoT to minimize these costs.
Modern agriculture is financially complex, reflecting its riskiness and tight margins. RCIS, a crop insurer recently acquired by Zurich American Insurance, allows policyholders using Ag Leader’s SMS software or Trimble’s Farm Works mapping software to submit GPS-based data to meet the compliance and reporting requirements of their policies. In turn, RCIS can use that data to confirm with the Department of Agriculture’s Risk Management Agency that their insurance products comply with the appropriate standards.
Agriculture is already heavily penetrated by the IoT, measuring everything from soil moisture to plant-by-plant insecticide requirements. The ability to submit and adjudicate claims quickly is another benefit.
