The global market for the Internet of things (IoT) reached $100 billion in revenue for the first time in 2017, and forecasts suggest that this figure will grow to around $1.6 trillion by 2025.
With such a prognosis, the technology is predicted to step far ahead than anyone can possibly imagine. But with the rise in popularity of IoT devices, there will be a rise in IoT app development as well as security challenges and issues.
In October 2016, a hacker found a vulnerability in a specific model of security cameras. Nearly 300,000 Internet of Things (IoT) video recorders started to attack multiple social network websites and brought down Twitter and other high-profile platforms for almost two hours. This attack is just an example of what can happen to IoT devices with poor security.
In October 2016, a hacker found a vulnerability in a specific model of security cameras. Nearly 300,000 Internet of Things (IoT) video recorders started to attack multiple social network websites and brought down Twitter and other high-profile platforms, for almost two hours.
This attack is just an example of what can happen to IoT devices with poor security.
It is not only video cameras, but anything with an internet connection, from a refrigerator, smart locks, thermostats, lightbulbs, vehicles, and even smart toys.
Using them always poses IoT security challenges and risks to overcome.
IoT Security Challenges
Now, it is not only us with our computers, but there are also “things” that interact with the Internet without our intervention. These “things” are continually communicating with the Internet, a fridge sending an update of the food inside or our vehicle transmitting messages to the mechanic to inform its oil levels.
IoT is wonderful in many ways. But unfortunately, technology has not matured yet, and it is not entirely safe. The entire IoT environment, from manufacturers to users, still have many security challenges of IoT to overcome, such as:
Manufacturing standards
Update management
Physical hardening
Users knowledge and awareness
Top IoT Security Risks
Returning to what happened in 2016, the lack of compliance on the part of IoT manufacturers led to weak and unprotected passwords in some IoT video cameras, which, in turn, led to one of the most damaging botnet attacks, the Mirai malware. There are many IoT security threats, but we will be highlighting the most important.
The following security issues with IoT can be classified as a cause or effect.
1) Lack of Compliance on the Part of IoT Manufacturers
New IoT devices come out almost daily, all with undiscovered vulnerabilities.
The primary source of most IoT security issues is that manufacturers do not spend enough time and resources on security.
For example, most fitness trackers with Bluetooth remain visible after the first pairing, a smart refrigerator can expose Gmail login credentials, and a smart fingerprint padlock can be accessed with a Bluetooth key that has the same MAC address as the padlock device.
This is precisely one of the biggest security issues with IoT. While there is a lack of universal IoT security standards, manufacturers will continue creating devices with poor security. Manufacturers that started to add Internet connection to their devices do not always have the “security” concept as the crucial element in their product design process.
The following are some security risks in IoT devices from manufacturers:
Weak, guessable, or hard-coded passwords
Hardware issues
Lack of a secure update mechanism
Old and unpatched embedded operating systems and software
Insecure data transfer and storage
A smart thermostat
2) Lack of User Knowledge & Awareness
Over the years, Internet users have learned how to avoid spam or phishing emails, perform virus scans on their PCs, and secure their WiFi networks with strong passwords.
But IoT is a new technology, and people still do not know much about it. While most of the risks of IoT security issues are still on the manufacturing side, users and business processes can create bigger threats. One of the biggest IoT security risks and challenges is the user’s ignorance and lack of awareness of the IoT functionality. As a result, everybody is put at risk.
Tricking a human is, most of the time, the easiest way to gain access to a network. A type of IoT security risk that is often overlooked is social engineering attacks. Instead of targeting devices, a hacker targets a human, using the IoT.
Social engineering was used in the 2010 Stuxnet attack against a nuclear facility in Iran. The attack was directed to industrial programmable logic controllers (PLCs), which also fall into an IoT device category. The attack corrupted 1,000 centrifuges and made the plant explode. It is believed that the internal network was isolated from the public network to avoid attacks, but all it took was a worker to plug a USB flash drive into one of the internal computers.
3) IoT Security Problems in Device Update Management
Another source of IoT security risks is insecure software or firmware. Although a manufacturer can sell a device with the latest software update, it is almost inevitable that new vulnerabilities will come out.
Updates are critical for maintaining security on IoT devices. They should be updated right after new vulnerabilities are discovered. Still, as compared with smartphones or computers that get automatic updates, some IoT devices continue being used without the necessary updates.
Another risk is that during an update, a device will send its backup out to the cloud and will suffer a short downtime. If the connection is unencrypted and the update files are unprotected, a hacker could steal sensitive information.
4) Lack of Physical Hardening
The lack of physical hardening can also cause IoT security issues. Although some IoT devices should be able to operate autonomously without any intervention from a user, they need to be physically secured from outer threats. Sometimes, these devices can be located in remote locations for long stretches of time, and they could be physically tampered with, for example, using a USB flash drive with Malware.
Ensuring the physical security of an IoT device begins with the manufacturer. But building secure sensors and transmitters in the already low-cost devices is a challenging task for manufacturers nonetheless.
Users are also responsible for keeping IoT devices physically secured. A smart motion sensor or a video camera that sits outside a house could be tampered with if not adequately protected.
5) Botnet Attacks
A single IoT device infected with malware does not pose any real threat; it is a collection of them that can bring down anything. To perform a botnet attack, a hacker creates an army of bots by infecting them with malware and directs them to send thousands of requests per second to bring down the target.
Much of the uproar about IoT security began after the Mirai bot attack in 2016. Multiple DDoS (Distributed Denial of Service) attacks using hundreds of thousands of IP cameras, NAS, and home routers were infected and directed to bring down the DNS that provided services to platforms like GitHub, Twitter, Reddit, Netflix, and Airbnb.
The problem is that IoT devices are highly vulnerable to Malware attacks. They do not have the regular software security updates that a computer has. So they are quickly turned into infected zombies and used as weapons to send incredibly vast amounts of traffic.
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What is more, a botnet can pose a security threat for electrical grids, manufacturing plants, transportation systems, and water treatment facilities, which can threaten big groups of people. For example, a hacker could trigger a cooling and heating system at the same time, creating spikes on the power grid; in case of a big-scale attack, hackers can create a nation-wide power outage.
6) Industrial Espionage & Eavesdropping
If hackers take over surveillance at a location by infecting IoT devices, spying might not be the only option. They can also perform such attacks to demand ransom money.
Thus, invading privacy is another prominent IoT security issue. Spying and intruding through IoT devices is a real problem, as a lot of different sensitive data may be compromised and used against its owner.
On a basic level, a hacker might want to take over a camera and use it for spying. Still, one should not forget that many IoT devices record user information, whether it is health equipment, smart toys, wearables, etc. On an industrial level, a company’s big data can be collected by hackers to expose sensitive business information.
Some countries are starting to ban specific IoT devices with security problems. For example, the interactive IoT doll with a Bluetooth pin, which gave access to the toy’s microphone and speaker to anyone within the 25-30 meter radius. The doll was labeled as an espionage device and was banned in Germany.
7) Highjacking Your IoT Devices
Ransomware has been named as one of the nastiest malware types ever existed. Ransomware does not destroy your sensitive files — it blocks access to them by way of encryption. Then, the hacker who infected the device will demand a ransom fee for the decryption key unlocking the files.
Here is how a ransomware notice looks like:
Ransomware is evolving, and IoT devices with poor security can become targets as well.
Just before the Trump inauguration speech, about 70% of the Washington DC surveillance cameras were infected with ransomware, leaving the police without the ability to record for several days.
The cases of IoT devices being infected with ransomware are rare, but the concept is quickly becoming a trend in the black hat hacker world. Still, wearables, healthcare gadgets, smart homes, and other smart devices and ecosystems might be at risk in the future.
Here, there is good news, and there is bad news. While this malware might not have valuable data to lock down because most IoT information is stored in the cloud, it can lock down the entire device’s functionality. Imagine that your vehicle will not start unless you pay a ransom fee — or your house is locked down, with the thermostat set to the maximum.
8) Data Integrity Risks of IoT Security in Healthcare
With IoT, data is always on the move. It is being transmitted, stored, and processed.
Most IoT devices extract and collect information from the external environment.
It can be a smart thermostat, HVAC, TVs, medical devices. But sometimes these devices send the collected data to the cloud without any encryption.
As a result, a hacker can gain access to a medical IoT device, gaining control over it and being able to alter the data it collects. A controlled medical IoT device can be used to send false signals, which in turn can make health practitioners take actions that may damage the health of their patients.
For example, a hacked medical IoT device can report a fully charged battery to the maintenance station while, in reality, the battery is about to die. Worse, there are risks of IoT security in healthcare devices like pacemakers or the ones making the insulin shots. The vulnerabilities found on St. Jude Medical’s implantable cardiac gave access to hackers, enabling them to alter the pacing or shocks, or even worse, deplete the battery.
9) Rogue IoT Devices
We might already know about the rapid growth of the number of IoT devices, which is predicted to reach 18 billion by 2022, according to Ericsson. The problem with this number of devices arises not only in the BYOD (Bring-Your-On-Devices) approach in enterprises but also in home networks.
One of the most significant IoT security risks and challenges is being able to manage all our devices and close the perimeter.
But rogue devices or counterfeit malicious IoT devices are beginning to be installed in secured networks without authorization. A rogue device replaces an original one or integrates as a member of a group to collect or alter sensitive information. These devices break the network perimeter.
Raspberry Pi board
Example of rouge IoT devices can take the form of the Raspberry Pi, or WiFi Pineapple. These can be turned into a rogue AP (Access Point), thermostat, video camera, or MITM (Man in the Middle) and intercept incoming data communications unbeknownst to users. Other variations of rogue devices may also emerge in the future.
Interestingly, the horror movie “Child’s Play” was inspired by the conceptand can serve as a curious example. In the movie, controlling other devices in a smart home system, Chucky is a rogue IoT device that has become a high-level threat to people’s lives.
10) Cryptomining with IoT Bots
Mining cryptocurrency demands colossal CPU and GPU resources, and another IoT security issue has emerged due to this precondition — crypto mining with IoT bots. This type of attack involves infected botnets aimed at IoT devices, with the goal not to create damage, but mine cryptocurrency.
The open-source cryptocurrency Monero is one of the first ones to be mined using infected IoT devices, such as video cameras. Although a video camera does not have powerful resources to mine cryptocurrency, an army of them does.
IoT botnet miners pose a great threat to the crypto market, as they have the potential to flood and disrupt the entire market in a single attack.
Summary
After the Mirai attack, people realized that any device connected to the Internet is a potential ally for an army of bots. But that was only the beginning.
For now, IoT and security are still not found in the same place. There are still many risks and security challenges of IoT now — and more will inevitably emerge in the coming years.
The more variations of IoT devices we see out there, the more complex IoT security problems will become. International organizations and governments will need to create universal IoT standards to control the security in cities, homes, locations like nuclear plants, the manufacturing process, and other areas and locations.
We have seen the emergence of IoT as a trend in the last few years. There are smart devices coming out that we never thought needed an Internet connection: smart toothbrushes, beauty mirrors, tables, pillows, beds, and the list continues to grow. The world is turning into a network of objects collecting our personal, sensitive information.
We can only imagine the amount of important data hackers could steal from those IoT devices if they do not have proper security. So, the top IoT security threats listed above are just the beginning. If we want our devices smart, we need them to be secure as well.
We, at Intellectsoft, empower companies and their workforce with cutting-edge transformative solutions and data-driven insights. Are you and your organization ready to shift the mindsets and get the most out of innovations?
Talk to our experts and find out more about the topic and how your business or project can start benefiting from it today!
The hospitality industry depends a lot on keeping customers happy, but it’s getting harder to attract and keep them. The pandemic hit this industry hard, and now market competition is tougher than ever, with competitive offerings swaying customers. Hospitality businesses are willing to spend big to win customers back. The main questions for many are: how can we stay ahead of the competition, keep our customers, and increase revenue? Keep reading—we’ve got some answers.
Customers today have so many options that getting their attention is a real challenge. It’s not easy to make them choose your business over others. What worked 10 years ago doesn’t work the same way now. Back then, people often chose businesses based on reputation. But with new types of businesses (boutique hotels, craft cafes) popping up or big enterprises getting a new strategy, expectations have changed. The good news is these businesses have shown what works: great customer service. They focus on personalizing the experience, making things easy for customers, offering loyalty programs, and using smart technology.
In this article, we’ll explore these tech strategies and show you how they can help your business grow, and double the revenue. Keep reading to learn more!
The Importance of Customer Satisfaction in the Hospitality Industry
Customer satisfaction, which equals exceptional customer experience, is the backbone of the hospitality industry. It plays a central role in driving revenue and loyalty, as satisfied customers are more likely to return and recommend a hotel, restaurant, or other hospitality business to others. In fact, a study by the Harvard Business Review found that a 1% increase in customer satisfaction can lead to a 0.5% increase in revenue. Moreover, loyal customers are more likely to forgive mistakes and continue doing business with a company, even if they experience a negative encounter.
Let's quickly review the challenges the hospitality industry is facing right now so we can move on to the solutions and our case studies.
Challenges in Hospitality
As businesses navigate the changes in the hospitality industry, there are some key areas where a little improvement can go a long way. From improving customer service to embracing digital transformation and tackling labor shortages, we’ll take a closer look at today’s biggest challenges—and, more importantly, how technology can step in to help. Let’s get started!
Poor Customer Service
Even with strong and high-quality business offerings, poor customer service can drive potential customers and existing customers away. Common issues include:
Long wait times in customer service queues (it is worth remembering that our attention spans 8 seconds, and we live in a very busy world, so quick and efficient responses are more important than ever.)
Poorly trained customer service representatives
Lack of follow-up
Services not being done properly or quickly
Recall issues that require multiple service calls
These problems can frustrate customers. But, at Intellectsoft, we believe that the right approach, combined with technology, can address them effectively.
Digital Transformation Gaps
Approximately 50% of hotels are adopting new technologies, with 43% automating repetitive tasks and 39% upgrading existing systems. Source: workstaff.app
While many businesses are adopting digital solutions, some still struggle with outdated systems and fragmented data. Legacy companies often face chaos when trying to manage their data and create new systems or add features.
Some of the recent examples include clients coming to us to create AI solutions for their services while their data simply was not ready for the advanced tasks. We advise stepping back, communicating with a company objective, and working on keeping the data clean (centralized, structured, and segmented).
When we’re asked to create advanced systems using AI, we always emphasize the importance of organized data. To train AI and build such complicated systems that truly work, you need to start from the very beginning—collecting, storing, centralizing, and organizing it. We encourage our clients to align all departments to work internally on the data so we can create a unified digital system that delivers personalized experiences.
If you’re unsure where to start with your data, we can help. Collecting feedback at various touchpoints along the customer journey is crucial for gaining insights into customer satisfaction and loyalty. Book an IT consultation with us, and our experts will guide you in mapping out a path to get more from your data and build a system that works for your business and team.
Reskilling Staff
The pandemic hit hard in early 2020, especially for the hospitality and travel industries. Even five years later, many businesses are still feeling the impact. Recruiting and retaining skilled staff has become a major challenge post-pandemic.
Reskilling to address technology’s impact is of utmost importance, as about 40% of hotel General Managers place it among their top three workforce challenges.
We strongly believe that adopting the right technology can help. For example, creating an app to train your staff not only saves time but also ensures consistency in learning. AI assistants can also work alongside your team, helping with tasks like recruitment (providing industry insights, crafting emails) and staff training. Imagine having an app dedicated to making your team’s work easier and more efficient!
How Technology Tackles These Challenges and Supports a Customer-Centric Hospitality Culture
Automation, AI, and similar technologies may threaten many. However, the debate about replacing humans isn’t about that—it’s about cooperation and working hand in hand with technology to achieve the highest standards and establish brand-new “golden standards.” Technology is here to assist staff in listening to and collecting customer insights from data.
Let’s review some of our cases to see examples of how technology helps improve customer experience and supports customer service.
Examples of Intellectsoft projects
Property management systems (PMS)
We created a web platform and mobile app that makes managing daily tasks easier and offers extra services to improve residents’ experience. It gives a clear overview of daily activities and helps with managing units and users. Residents can easily book amenities, submit service requests, and report incidents. The platform also includes features for equipment management, key instructions, workflows, and custom permissions. This makes it easier for staff to stay on top of equipment and ensure residents have all the information they need. Plus, tools like announcements, quick votes, a forum, and a community calendar help build a connected and engaged community.
Guest Experience Management App
Our next app helped our client improve their guest experience by replacing printed marketing materials and the need for phone calls with a smart solution. Now, guests can easily order in-room dining, make reservations, and interact with staff— through a simple tablet in their room. The solution includes three parts: a custom in-room tablet with a variety of services, an admin panel for hotel staff and service providers, and a backend system that connects everything together. This approach makes things easier for guests and staff, improving both convenience and efficiency.
Existing Customers First: Building Loyalty with Personalized Touchpoints
Keeping existing customers is not just a strategy; it’s well-known that retaining existing customers is more cost-effective than acquiring new ones. In fact, research shows that it costs five times more to acquire a new customer than to retain an existing one. KPMG named customer retention as the number one revenue driver for the company.
Moreover, a 5% increase in customer retention can lead to a 25% to 95% increase in profits, showing the significant impact loyal customers can have on a business’s bottom line. Retention strategies, like personalized experiences and loyalty programs, can foster long-term relationships and generate recurring revenue, ultimately making them an invaluable part of any business model.
Personalization: How Technology Can Help?
Everyone loves to feel special—it’s part of being human. In hospitality, personalization has evolved from being a luxury to an essential standard. With the right technology to manage your data effectively, you can deliver those “wow” moments that guests won’t forget.
More than half of hotel chains are already using personalization features on their websites, booking platforms, and apps, and another 39% are planning to follow suit soon. They’re tailoring experiences to fit guest preferences perfectly.
Source: Deloitte
How does technology make it happen?
CRM Systems: They help you keep track of guest preferences, booking history, and special requests so you can offer services tailored just for them.
Loyalty Programs: Personalized rewards and offers show your guests that you value them, keeping them coming back for more.
AI Personalization: AI analyzes guest data to predict what they’ll love (from room upgrades to local recommendations) before they even ask.
IoT Gadgets: Smart room features like voice-activated assistants, or temperature controls adjust to your guests’ preferences, making their stay more comfortable.
With tech-powered personalization, you’re building loyalty and maximizing the lifetime value of every customer.
Our Case Study: Smart Hotel Management & Loyalty Program
For one of our clients, we created a smart room solution, complete with a custom IoT system. Guests can use a mobile app to control services, explore amenities, and find resort information-- with a special touch to their suite type. For the client’s entertainment business, we improved their legacy software by running a full IT and code check, fixing issues, and making the system better for customers.
Along with that, we developed a mobile app for the loyalty program, allowing businesses to effortlessly reward their customers and keep them engaged with exclusive benefits.
Our solutions not only helped the client with special experiences for guests; it also improved operations, cutting costs by eliminating inefficiencies. Here's what our experts shared:
"We transitioned away from ESB (Enterprise Service Bus) systems, which previously cost millions, and replaced them with more efficient, self-managed solutions. Similarly, we’ve implemented Device Farms that improved operations and saved resources."
Leveraging Software to Increase Upsell Opportunities
Here are some examples of tech tactics that will help your team sell more and introduce new offerings to existing customers, improve overall efficiency leaving your team grateful:
Dynamic Pricing Algorithms
For finance and marketing teams, manually calculating pricing by segment to introduce your clients can be incredibly challenging. AI-powered tools can strongly optimize these strategies by analyzing your database in detail.
Upselling via Apps
Boosting revenue in the hospitality business often comes down to personalized experiences. Imagine this: a guest books a room, and then your app suggests a spa package or a room upgrade at just the right moment. Later, it nudges them to book a dinner reservation or a guided tour designed to their preferences. With apps offering these personalized recommendations during and after bookings, you’re not just increasing your revenue per guest but also skyrocketing their experience. And you do it in a sustainable way, not by speculating, but by offering what your customers desire based on their previous experiences. It’s a win-win: seamless, helpful, and far from pushy.
Inventory and Resource Management Software
Making every resource count in your hospitality business is key. Inventory and resource management software allows you to effortlessly track everything from linens to room availability, ensuring nothing goes to waste. Having real-time insights to reduce overstock, avoid shortages, and optimize operations assists sustainably keep everything under control and know what you need to focus more. It helps maximize room occupancy by aligning bookings with available resources, ensuring every room and item is used effectively. This approach leads to smarter management, better guest experiences, and a noticeable boost to your bottom line.
Adopting these strategies not only optimizes your operations but also drives business growth. Ready to discover how technology can elevate your goals? We’re here to create a tailored solution for you.
Steps For Implementing a Customer Service Technology Solution
Improving customer service in hospitality doesn’t have to be a daunting task. With the right technology, you can smooth the path of your operations, speed up response times, and elevate the overall guest experience. Here’s where you can make it happen:
1. Understand Your Needs
Start by identifying the challenges your business is facing. Are you struggling to manage high volumes of inquiries, track customer feedback, or personalize the guest experience? Pinpointing your needs will guide you to the best solutions.
2. Pick the Right Tools
Choose technology that aligns with your goals. Look for solutions that are scalable, easy to use, and integrate effortlessly with your current systems. Options like CRM software, live chat tools, or a guest experience app can make a difference.
3. Equip Your Team
Technology is only as effective as the people using it. Train your staff to make the most of the new tools, so they can deliver exceptional service and resolve issues quickly. Confident, well-equipped staff creates happy, loyal customers.
4. Keep Improving
Once implemented, monitor how well the solution works. Are response times improving? Are customers more satisfied? Regular evaluations will help you fine-tune your approach and keep things running harmoniously.
Some Tech Ideas for Hospitality Businesses
CRM Software: Manage customer interactions and preferences.
Guest Experience Apps: Delight guests with personalized experiences right at their fingertips.
Amenity Management Systems: Simplify operations for everything from room service to facility bookings.
Live Chat Tools: Offer instant support and answers.
Social Media Management Tools: Keep customer interactions engaging and organized.
Integrating these strategies will not only improve your customer service but also deliver unforgettable customer satisfaction, loyalty, and, ultimately, your bottom line. Ready to take the next step? Book a consultation with our experts.
Conclusion
To wrap up everything we've discussed, customer satisfaction and experience are at the heart of hospitality. Retaining customers is more than just keeping them around—building strong, long-lasting relationships and consistently meeting their evolving needs. By understanding their pain points and offering personalized solutions, you can inspire loyalty and drive progress. With the right technology and continuous improvement, your business can stay ahead, let go of what no longer serves you, and keep growing.
At Intellectsoft, with over 17 years of experience in software development, our expert team is ready to help. We create everything from mobile apps to full-fledged portals and systems, leveraging the latest technologies like AI, Cloud, and Machine Learning. With deep experience in the hospitality industry, we’re here to craft personalized solutions that bring your business unforgettable customer experience and retain your valuable clients.
Ready to double your revenue and level up your customer retention strategy with personalized technology? Contact our experts, and we look forward to working hand in hand with you to build or revitalize the perfect app or system for you.
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