Wednesday, December 22, 2004

Biometrics Shifting into Non-governmental Sector

Biometric applications are expected to continue to cause a stir in the security industry in 2005.

By Jason Tan

More biometric implementations for non-governmental projects were taking off worldwide in 2004.

Among all, LG Electronics and Fujitsu unveiled fingerprint-enabled mobile phones with enhanced security to cater to the consumers’ needs. Over in Singapore, patrons of Mary Chia Beauty & Slimming Specialist started to use fingerprints to open up lockers to secure belongings.

As such, will non-governmental sectors overtake government to become the major biometric adopters this year?

“The government sector is and will continue be the largest segment in the biometric industry due to the increasing security measures of post 9/11 and new laws that mandate biometric implementation in the U.S. for instance,” pointed out Prianka Chopra, Frost & Sullivan’s biometrics, smartcards and security program manager.

However, on the non-governmental side, one must not rule out the immense potential from the commercial/enterprise and consumer markets in the future. “Within enterprise, certain verticals such as the financial and healthcare sectors are likely to be more inclined to adopt biometric technologies,” she said.

Biometric technologies can be used for a variety of applications such as physical access control and network security in these markets. The driving forces include legislations that mandate the security of individual records, cost savings and convenience from automating business processes, she added.

There are also some efforts underway to use biometric devices within automobiles. Growth drivers include the steadily declining prices of biometric devices and the increased awareness of consumers on biometrics, she informed.

Seconded this, Art Stewart, vice president of business development at AuthenTec, said that although government-related biometric applications have drawn most of the attention, the fastest growing segment has actually been in the consumer biometric arena.

Rising of Consumer Biometric Products
“Today, there are more than 4 million consumer biometric products in use, primarily in cell phones, notebook computers and PC peripherals. We definitely expect this trend to continue in 2005,” he claimed.

This is largely driven by the changes in cost, size and accuracy of biometric technologies, as well as the increased consumer demand of better security and convenience in their devices.

On the technology side, biometric fingerprint sensors that were US$40 and about one inch square five years ago are now under $6 and smaller than a pencil point, Stewart informed.

Advances in the technology have also made these same sensors much more accurate, with new sub-surface sensors capable of reading virtually any fingerprint, under nearly any conditions, he added.

On the consumer demand side, the need to protect computers and mobile phones from fraud and theft has led to calls for higher level of security. The traditional password approach has become too cumbersome, thus making biometrics a perfect means of providing both convenience and security.

A recent survey commissioned by AuthenTec shows that 63 percent of PC owners and 71 percent of handset users in the U.S., would pay extra to have a fingerprint sensor added to their devices to enjoy a new level of convenience and security.

“We believe this will likely be the same around much of the world,” he asserted.

Indeed, the biometric market is set to fly off to greater heights.

According to Frost & Sullivan's recent biometric research, the global biometric market will record US$2,075 million in 2006, nearly seven-fold from $303 million in 2003. The market is projected to hit $3,548 million in 2009.

According to Chopra, the majority of the market revenues will come from the government as well as travel and transportation vertical markets. However, a good part of them will be contributed by physical access control, time and attendance, transactional authentication (at the retail/ATM) from the commercial/enterprise sector.

“The adoption of biometrics--particularly fingerprint biometrics--will continue to grow significantly in 2005 and beyond,” added Stewart.

This will be driven by more PC and handset manufacturers incorporating biometrics into the equipment as a regular feature. With the tremendous volume of mobile phones and computers sold worldwide each year, this will create tremendous opportunities for fingerprint sensors.

AuthenTec said that Asia will sustain its lead as the largest and fastest growing region for biometrics this year, followed by the U.S. and Europe.

Currently, 70 to 80 percent of the consumer biometric use is in Asia--primarily in Japan, Korea, and Taiwan.

“We believe that these markets will keep on expanding, with significant opportunities for growth in China, especially in the cell phone market. In addition, we expect the biometric market will begin to take off in the U.S. and Europe beginning this year,” he informed.

Fingerprint Still Rules
This year, fingerprint application is expected to be the highest volume, fastest growing form of biometrics among others, as what happened in the past.

“This is due to the fact that it is the only practical solution for high-volume consumer applications. Many of the other biometric technologies are typically involved in larger, more expensive solutions requiring larger systems to operate,” informed Stewart.

Fingerprint biometrics will flourish in the existing consumer market, and be designed into an increasing number of applications that are still on the drawing table. This does not even include several other market opportunities, such as automotive and access control, which also pose large opportunities when they begin to boom, he said.

Chopra also forecasts that fingerprint recognition will continue its dominance in the biometric industry, though its market share will decrease over time.

According to her, fingerprint will still be deployed in all types of applications, including physical access control, transactional authentication, ID confirmation in government projects, wireless device security and others.

On the other hand, facial recognition and iris recognition are slated to gain more momentum, as they are expected to reap in market share particularly in the travel-and-transportation vertical market.

In the case of hand geometry, this technology will maintain its forte in the physical access control and time-and-attendance markets. Voice and signature biometrics will focus on automating business processes in the commercial segment.

Boosting the Uptake
In general, the major drivers for enlarged use of biometrics this year will be bigger adoption by electronic manufacturers, and rising demand by consumers.

“Biometrics is still at its early stage of adoption, and has gained tremendous traction in 2004, which should continue into 2005 with more cell phone, PC manufacturers and service providers jumping onto the rush,” Stewart stated.

Once consumers are exposed to this convenient form of security, they will demand the feature in future purchases. “The major challenge will be in gaining the additional footing that will help make biometrics more mainstream and a must-have in every type of electronic device,” he said.

In Chopra’s views, major drivers for the biometric market include rising awareness and exposure of biometrics; laws and mandates to implement these applications in the government segment, as well as opportunities from the travel-and-transportation vertical such as airports.

However, privacy concerns are still a major deterrent, and the adoption depends on real-world performance of biometrics which could be different from vendor claims. In addition, needs for continuous technical advancements require large investments, and issues such as high cost of biometric devices relative to alternative technologies need to be addressed, she pointed out.


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