Driving Towards the Future

Automobiles of the future will be guided by cutting-edge technologies – a transformation that will have significant impact on financial services as well

As more and more vehicles become connected, new insurance services and business models are emerging, including data-driven usage-based insurance (UBI), which uses data to align driving behaviour and mileage with insurance premiums. Further, with the advent of AVs, there is the potential for the manufacturer or service provider to be the insured party as the industry looks to product liability insurance versus the driver-obligated liability and insurance model we generally see today.

Interconnection and autonomous vehicle (AV) platforms: The rate by which the digital automotive and transportation ecosystem matures depends on the ability for data to traverse across authorized internal and external systems, applications, and functions. Interconnection platforms represent the vendors that are investing in creating the interfaces (usually through APIs) and technologies that enable an ecosystem of new products, services, and capabilities. Interconnection platforms for vehicles exist in many forms including those that enable the provisioning and use of multiple cellular mobile networks; telematics systems that gather, normalize, and distribute data across multiple vehicle types; and open source code bases and tools that enable rapid software development. A new, emerging area of industry growth is the development of multi-OEM AV driving platforms that can be interfaced and integrated with tier 1 and OEM systems directly to deliver broad autonomous capability sets.
Data management. A data deluge continues to impact the automotive industry. This deluge results from the increased adoption of high-speed data-embedded connectivity in vehicles, onboard sensors, migration of analogue vehicle systems to digital (and “fly by wire”) control, and consumer demand for enhanced and immersive experiences. This data challenge (which will only increase for full self-driving vehicles) requires the technologies, expertise, and innovation provided by data management vendors. These vendors — typically coming from the world of cloud, database, integration, and marketplace services — are helping manage vehicle, edge, and cloud data. These vendors may also perform data normalization, labelling, compliance, distribution, third-party contracting, and monetization functions.
AI and machine learning: AI and machine learning vendors are focused on the development of systems and tools that leverage data models to improve on their own without constant supervision or solely relying on pre-planned algorithms. AI and machine learning is being applied to multiple operational and support domains including AV driving functions, traffic and pedestrian monitoring, predictive maintenance, and vehicle condition evaluation.
Electric and alternative energy vehicles: To align with aggressive pollution targets, as well as the increased electrical power consumption required by AV platforms, the automotive and transportation industry has placed increased focus on the development, commercialization, and scaling of electric and alternative energy vehicles and systems. These vendors must look at the impacts of this technology end to end including charging and refuelling infrastructure, energy management and monitoring technologies, utility interconnection agreements, as well as battery manufacturing, recycling, swapping, and salvage.

Applications and Services Applications and services represent the key and emerging use cases that leverage digital automotive and transportation hardware, software, data, and ecosystem relationships. These applications and service segments include well-understood ideas and markets (e.g., fleet management), as well as newer, near-term engagement and monetization opportunities (e.g., mobility as a service [MaaS]). Many of these markets also play a role in the emerging passenger economy.

Fleet management. Fleet management involves the development and deployment of a vehicle management service that collects, manages, optimizes, and documents individual vehicle performance and history, alongside that of other owned or leased vehicles. Fleet management providers can perform a variety of functions including supporting vehicle financing, maintenance, telematics (tracking and diagnostics), driver management, speed management, fuel management, and driver health and safety management. They may also help with the digitization of paperwork and processes needed for financials (e.g., accounting), as well as vehicle or driver compliance. Enterprise fleet management is often delivered leveraging purpose-built aftermarket hardware, but as increased investment in connected vehicle infrastructure opens up additional remote functionality and monitoring, the expectation is that eventually these solutions will be built on top of embedded vehicle software and interfaces.
Insurance services facilitate the financial protection of all that the vehicle may touch or interact with, including providing protection from damage, injury, and liability expenses. This includes potentially supporting the vehicle’s components, software, fleet provider, passengers, drivers, roadside infrastructure, and even pedestrians. As more and more vehicles become connected, new insurance services and business models are emerging, including data-driven usage-based insurance (UBI), which uses data to align driving behaviour and mileage with insurance premiums. Further, with the advent of AVs, there is the potential for the manufacturer or service provider to be the insured party as the industry looks to product liability insurance versus the driver-obligated liability and insurance model we generally see today.
Mobility as a service. MaaS refers to the transportation services that can be dynamically scheduled and transacted by a user through a smartphone application. At present, MaaS includes three main service categories of ridesharing (and ride hailing), car-sharing, and micro-mobility services. These service categories, which were originally developed on smartphones and tablets, are increasingly integrating the data from the vehicle and the transportation systems to provide a better customer and driver experience. Further, public transit agencies are starting to investigate how MaaS can be more tightly integrated into their transportation portfolios.
Remote diagnostics and over-the-air updates. Remote diagnostic applications and services monitor the vehicle’s mechanical, electrical, software systems, and components to ensure satisfactory performance and/or compliance. When a fault, abnormality, or noncompliance is detected, these services can trigger an alert to the vehicle operator, owner, fleet management provider service centre, and/or the vehicle manufacturer. Increasingly, vendors and manufacturers are enabling remote processes and capabilities to remedy these alerts through software and firmware over-the-air updates. The use of OTA updates, when successfully implemented, can help reduce the time and impact to resolve identified issues, deliver new features, and deliver an increased level of customer satisfaction and value.
Infotainment applications and services provide entertainment and information to the vehicle’s driver and/or passengers. Infotainment digital services can be delivered through an in-vehicle embedded device or a mounted hardware device, as well as through the handheld devices brought into the vehicle by the passenger. Examples of infotainment digital services include streaming radio, music, and videos; travel and location information (e.g., dining, traffic, fuel, and city information); and immersive services (e.g., augmented or virtual reality).
Authentication and payments. Authentication and payment services facilitate electronic transactions on behalf of the vehicle and/or its occupants. These transactions can be used to access personalization services and profiles, pay for goods and services consumed by the vehicle (e.g., gas and tolls), and engage with third-party cloud infrastructure and services (e.g., vehicle charging and garage access).
Mapping and location-based services. Mapping and location-based services are built on the foundational premise that a vehicle exists to move people and/or goods from a source to a destination. Mapping vendors are continuing to invest in improving how location data is being gathered, analysed, and distributed to be able to improve route efficiency, integrate more contextual data for advertising, map the contours and lanes of the roads (e.g., as in the requirements for AVs), and raise the use and importance of location in the delivery of operational and support services. As location context becomes more critical to vehicle and transportation management, the granularity for accuracy and fidelity continues to increase.
Safety services include the products, services, and monitoring capabilities that ensure the protection of the vehicle, its occupants, and others on the roadway. These services include onboard, brought-in (smartphone applications), or aftermarket hardware- and software-provided features such as crash avoidance and autobraking, construction and accident information, roadside assistance, voice-to-text translation, and driver and occupant monitoring.