Connected Corners

Data-on-wheels: Why connected vehicle data ownership & access matters (Part 1)

This article explores key connected vehicle data categories as well as the significance of data ownership & access in the development of connected propositions

In a bid to diversify their core consumer offerings (& revenue sources); automakers are increasingly making their entire vehicle lineup ‘data smart’

…by embedding always-on connectivity & computing features into every possible vehicular part (infotainment units, mechanical components, safety systems, et al.) to spew out valuable data that carries varying levels of intrinsic commercial value

Leveraging these data sets are a network of data controllers, processors and brokers (automakers, component OEMs, tech companies, et al.) who are concurrently developing a myriad of commercial services & propositions

This topic aims to briefly introduces key data-on-wheels categories as well as the significance of data ownership & access in the development of such connected services & propositions

Data-on-wheels

Virtually all connected vehicles will have the capability to continuously generate vast amounts of the next generation currency symbol – DATA!

Data sets (& insights thereof) collected from the vehicle’s various connected parts, systems, sensors and telemetry modules as well as the driver/occupants themselves form the foundation of most, if not virtually all connected vehicle services & propositions today

In fact, modern day connected vehicles fitted with vast array of onboard sensors, suite of cameras and active safety modules have the capability to produce mountains of diverse data sets that in turn yield commercially valuable insights

Connected vehicle data categories

Generally speaking, the vast data sets (& insights thereof) generated from connected vehicles could broadly be categorized as either vehicle derived or user derived

Key Data Categories - Connected Vehicle

1. Vehicular Data

Data points & insights created by, associated with and unique to the vehicle (VII – vehicle identifiable insights)

Data points created by or associated with the respective connected part, system, sensor & telemetry module housed within the connected vehicle (think: engine, wheels, transmission, battery, infotainment systems, HVAC controls, doors, lights and virtually any component)

The resulting VII – vehicle identifiable insights – becomes a key input into developing smart vehicle services & propositions (OTA software updates, proactive failure-recognition alerts, UBI – usage based insurance, et al.)

2. User Data

Data points & insights created by, associated with and unique to the vehicle’s user (PII – personally identifiable insights)

Data points created by or associated with the user’s (driver & occupants) interactions within the connected vehicle such as driving behavior (braking, acceleration, speed, etc.), infotainment usage (content, mapping, destination, etc.) and even vehicle settings (seating, HVAC, mirrors, etc.)

The resulting PII – personally identifiable insights becomes a key input into developing tailored user services & propositions (think: music subscription, for enabling seat heating/ventilation functionality) and everything in between

Data sets beyond connected vehicle

Data points created by or associated with the interactions from within the connected vehicle but with the user’s extended connected lifestyle ecosystem

These scenarios include users accessing their connected home (lighting, heating, etc.), connected business (mobile meetings, etc.) and even connected commerce (parking payment, fast food drive thru payments, etc.) through various aspects of their connected vehicle (infotainment screen, internet hotspot, in-vehicle voice assistants, et al.)

Role of data ownership & access

Businesses across the connected vehicle value chain (data controllers, data brokers, data processors) are looking to translate connected vehicle data sets (& insights) into unique commercial services & propositions

But is only possible if the said business has access to the required data sets either through direct ownership of connected components, OEM partnerships, user permissions and commercial agreements (or combination thereof)

Methods of data ownership & access

There are four key ways a value chain player (in this case an automaker) can gain access to the data sets (& insights) required to build & offer connected services & propositions

1. Data Owners – Direct ownership of connected components

As the sole owner of the connected components installed (e.g. engine, et al.), the automaker has unrestricted access to its related data sets

The resulting insights could be used to develop & offer corresponding connected propositions such as vehicle customization (think: subscription plan for enabling seat heating/ventilation functionality, OTA engine upgrades, et al.)

2. Data Partners – Partnership with OEMs that build their respective connected components

Automakers may gain access to required data sets from installed connected parts manufactured by 3rd party OEMs through partnership deals (think: revenue sharing, royalties, et al.)… which may also extend to aftermarket OEMs (e.g. aftermarket connected wheels & tires, et al.)

The partnership agreement may also allow the automaker to act as the primary data aggregator, developer and provider of related connected services & propositions (e.g. OTA software updates, preemptive parts replacement alerts, et al.)

3. Data Permissions – Request access to data generated by the user

Automakers may also request access to the myriad of data sets generated by or associated with the users’ in-vehicle interactions (PII) such as driving behavior, locations visited, in-vehicle interactions and more

This type of user agreement would typically be in exchange for the provisioning of resulting connected services as well as its associated benefits (monetary, convenience, value add, et al.)

4. Data Brokers – Purchase access from independent data broker companies

Automakers may also choose to purchase access to relevant data sets via data brokers… who in turn may either own or have access to said user data through various means

Having this comprehensive access to a full suite of VII + PII data sets (& insights thereof) enables value chain providers to benefit from offering an even wider range of enhanced value propositions

Furthermore, enhanced propositions also have the potential to present end users with myriad of extended benefits; typically involving a combination of monetary and/or convenience

Additionally, acquiring access to comprehensive sets of data via a combination of aforementioned methods also enables the value chain player to assume the industry coveted role of data aggregator

…which; further opens up the door to myriad of B2B/B2E&G commercial connected services (think: partnership with local council on urban planning & roadway development)

Hence data ownership matters!

Exemplifying with Insure-tech Scenario

Let’s explore a scenario of enhanced value proposition in the form of Driver Behavior Based Insurance (DBBI); which could be seen as an extension of current connected insurance solution – Usage Based Insurance UBI (vehicular data based value proposition)

Characteristics of existing UBI; which is based on actual usage of the vehicle itself & ergo derived predominantly from vehicle generated data sets (think: distance traveled, vehicle maintenance schedules, et al.)

…could be amalgamated with driver behavior insights derived predominantly from user generated data (think: driver’s acceleration style, braking response times, distraction/fatigue factors, et al.)

…to develop a hyper-personalized insurance premiums tailored to each individual vehicle as well as its drivers

…that can further be enhanced with the addition of a ‘real-time’ component, i.e. premiums adjustments based on near/real-time collection and analyses of aforementioned vehicle & user data points

The above scenario for enhanced value proposition is only possible when the solution provider entirely owns or has full access to the relevant sets of vehicle + user data points

Ford (& its Lincoln brand) for example has teamed up with U.S insurance providers to develop such an insure-tech program where the key value proposition is to saving their customers money by giving them the option to share their driving behavior via full suite of onboard connected technologies on their vehicles

So…

Data-on-wheels along with next generation connectivity (NGN/5G) form the key foundational pillars in building myriad of connected value propositions

Who owns and/or has access to What data sets (& insights) largely determines the types of connected services & propositions that will be developed and offered

But… those businesses with full access to both user & vehicular data sets are in a better position to develop and offer more advanced connected services & propositions

Furthermore the dynamics between data controllers, data processors and data brokers play a key role the complex journey to develop enhanced connected services & propositions

Not all connected propositions concepts may necessarily see the light of day… some owing to range of challenges such as investment costs, technological complexities, lack of consumer interest, long term viability and even stricter regional regulations (privacy, consumer, financial, et al.)

Forthcoming segments will aim to explore some of these challenges as well as the role of data controllers, data processors and data brokers within the broader connected vehicle services & proposition sphere

Stay tuned!

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