Your lens on the world of biometrically enabled identification solutions


Volume 2, Issue 4

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June 2007

Inside this Issue

- Editor's Intro... "I want my biometrics!"
- Recommended Events
- The Future of Biometrics
- IPO Mania
- Terrorist Toddlers
- Solution Performance Strikes Again
- ... and the TWIC delays keep coming
- Counting on Mobile Biometrics

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My interest in the development of biometrics became extremely personal this week when several clients had issues using PayPal to complete a purchase on Acuity's website.

In one instance an Australian (with Oz based credit cards) attempted to purchase a report from my US based company while traveling in Canada. Turns out PayPal has implemented a fraud detection scheme to identify suspect transactions and this one raised alarm bells. Fair enough.

However, after multiple phone calls to PayPal, my client, and from my client to PayPal and their credit card issuers, we determined that it is not possible to override the security scheme even if the credit card issuer approves the transaction and the customer contacts PayPal to confirm their identity.

So, how much easier would this be if the client's identity could be verified at the time of the transaction via biometrics? What would the ROI be considering my time, the client's time, PayPal's technical support rep's time, the credit card issuer's customer service rep's time, the toll free line charges, the complex security algorithm, and so on. Can you say high point of pain! Can you say I want my biometrics!

........

I do believe we are edging closer to the day where this kind of hassle can be remedied by biometrics, and authenticating transactions - whether they be financial or information based - will provide the largest revenue opportunity for the biometrics industry.

(For more in this perspective, I encourage you to reveiw Acuity's latest market research effort The Future of Biometrics. A teaser for the report is included below as well as a link to Executive Summary which can be freely accessed online.)

In the meantime, there is much work to be done to demonstrate how biometrics can be a critical element of solutions that serve our identity needs rather than threaten them.


This eUpdate provides commentary on news items and market developments that shed light on the state of industry progress on this front; some more encouraging than others. These include Terrorist Toddlers (ok, not really), a recent spate of industry IPOs, the ongoing TWIC saga, and the fundamental impact of perceived solutions performance on the overall prospects for the biometrics industry.


As always, your feedback is welcome. And please feel free to forward your copy of the eUpdate to colleagues and encourage them to subscribe.



Cheers,


C. Maxine Most

 

*For more in-depth analysis and strategic market development expertise, Acuity provides highly targeted custom research and consulting services and also publishes comprehensive biometric and identification solutions market reports and forecasts.

 

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C. Maxine Most  
Principal  
Acuity Market Intelligence  




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Acuity Market Intelligence | 640 W Linden St | Louisville, C0 80027| USA

    +1 303 449 1897     www.acuity-mi.com.com

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The Future of Biometrics

  Biometrics Market Research Report


Ok, shameless self promotion time. To encourage those of you who have not yet reviewed The Future of Biometrics Executive Summary (Brief Registration Required), here's what some of your colleagues have to say about Acuity's latest biometric industry research effort:

    "Acuity has put together the definitive view of the current state of the biometrics industry." - Steve Hunt, certified CPP and CISSP, 2006 CSO Magazine "Industry Visionary" Compass Award Winner, Named among 2006's 25 Most Influential People in the security industry by Security Magazine.

    "Acuity's insight will help you throw away the rear view mirror and understand where tomorrow's growth is coming from, and why." - David B. Johnston, VP Market Development-Biometric Programs, AOptix Technologies Inc.

    "Finally, a report that encompasses the entire biometric industry and its markets - present and future. Acuity cuts to the chase without filler and lays out both intelligent observation and prescient projections. This is the biometric industry's roadmap to the future or oblivion if they do not heed the message." - Bill Eldridge, Executive Vice President, Morpheus Technologies, Inc.


At $1295.00 USD, the report is priced to be accessible to players at all market levels. Approximately 12,000 words of analysis and more than 150 graphs, charts and tables are included. Here are some excerpts from The Future of Biometrics

    The biometrics industry will experience significant transformation over the next ten to fifteen years. Technological capabilities will revolutionize ease of use, accuracy, and performance and greatly expand the use of biometrics for personal, commercial, and government applications. Maturing business models will evolve from product to service based offerings with the bulk of revenues transaction based.

    The good news is that these dynamics will create an environment conducive to the level of market expansion needed to realize the promise of biometrics. The not so good news is that as growth continues and potential rewards increase so to will uncertainty and risk. Successful navigation of this market transformation will require a clear strategic vision of the inevitable future of the industry and the resources to exploit the opportunity gaps created by a market in flux

........

    Mainstream ubiquity will occur as capture devices for most routine applications will become cheap, reliable commodities available in multiple form factors embedded in everything from PDAs, PCs, POS terminals, and ATMS to vehicles, security gates and appliances. As with most technology, these devices will blend into the landscape of modern life and become essentially invisible. Do you know who makes the hard drive in your PC? How the bank processes your pin number at an ATM? Convenience will rule and except for high security applications or high value transactions, where more specialized equipment may be required, biometrics will become utterly mundane and the technology to process them virtually interchangeable. Selection of modalities will be based on the circumstances of any given solution.

    In the more distant future—beyond the timeframe of this report—the actual distinctions between biometrics modalities will blur, massive convergence will take hold, and individual biometric categories will disappear. This is more than just one technology winning out over another but an actual merging and morphing of the capture devices and the algorithms. Ultimately, capture devices and algorithms will be mostly indifferent, regardless of scale, to the nature of the type of pattern-data being captured.


Public Sector Market Growth

Commercial Market Growth


Download your copy of the Executive Summary for more!

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IPO Mania

Well, perhaps not mania, but three of the industry's most well respected and established players - AuthenTec, CrossMatch, Upek - are out to raise significant capital in public offerings. This will not only directly benefit these vendors but also the industry at large expanding opportunities for investors anxious to stake their "biometrics claim".

AuthenTec hopes to raise $50.6 million, Upek $86.25 million, and CrossMatch a whopping $225 million. Clearly, CrossMatch must be catching some of the acquisition fever running rampant in the L-1 camp. A second well funded, broadly based, and relatively large industry player would be enormously beneficial to biometrics market development. A base level of established competition validates industry potential, increases strategic pressure in a positive way, and provides increased security for government and commercial end users.

Though some competitors may feel threatened by these IPOs, or even just envious, this development is an overall win for the entire industry. The growth of the publicly traded biometric company portfolio will fuel even greater interest in the industry, increasing the availability of private and public capital for other players as these large infusions of cash build investor market credibility.

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Terrorist Toddlers

This incident is near and dear to my heart. As a mother of a 22 month old toddler and a frequent flier, I was outraged (but honestly not surprised) to hear about the "sippy cup' saga reported at Dulles International Airport. Granted, this is not completely biometrics related. But clearly, if we had more effective, reliable, user friendly airport security systems - which ought to include biometric identification - perhaps these type of incidents- which are common and mostly unreported - would become a thing of the past.

A mother, who became flustered by the flagrant over reaction of TSA personnel to the threat posed by the contents of her 19 month old son's sippy cup, was accused of intentionally spilling water from the cup and threatened with arrest. The offending item was seized as the child was pointing and crying to get his cup back.

Those of you who are parents (or anyone who has been on a flight with an unhappy baby) know how stressful flying can be for children, their parents, and the rest of the passengers and crew. Can you think of a good reason to go out of your way to agitate a child before they even get on the plane?. The woman was willing to drink out of the cup to prove there was nothing dangerous inside (something I have had to do quite often). This is not only a complete waste of limited airport security resources but IMHO a national disgrace. Can we move on to genuine terrorist threats, please?

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Solution Performance Strikes Again

Biometrics often face criticism, scorn, or downright dismissal because of their inherent limitations - they are not 100% accurate, performance varies with environmental conditions, not everyone can use every modality, etc. Over the past several years the industry has become reasonably adept at addressing these limitations and diffusing associated misconceptions, false expectations, and straw man arguments that have little bearing on real world circumstance. However, a significant challenge remains; clearly distinguishing the capabilities and performance of the technology from the capabilities and performance of the solutions which they enable.

Far too often biometrics shoulder the blame when solutions fail to live up to expectations. Other issues ranging from physical infrastructure, software and hardware integration, to human factors are often the culprits that prevent effective deployment of a biometrically enabled solution. Far too often it is the biometrics industry that experiences subsequent setbacks or bad PR based on perceived failure when in reality the biometrics technology may have performed as expected. Here are a few recent examples where the inability to deploy an integrated solution on time or according to expectations may negatively impact overall biometrics industry progress:

  • The MiSense trial at Heathrow airport has been extremely well received by the 3,000+ passengers who participated. Three linked services - the first two biometrically enabled - designed to speed and secure travel were tested.

      - Capture of traveler biometrics at airline check-in and verification of the resulting identity at the entrance to security screening and aircraft boarding.
      - An international registered traveler program captured thirteen biometrics, issued an RFID smart card and allowed the use of self-service border clearance gates.
      - Biographic data from a traveler’s passport and travel itinerary were captured in real-time during check-in, transmitted to and processed by the Border & Immigration Agency for background checks prior to departure.

    The program itself was developed and delivered within a year by a consortium of nine commercial and government organizations. The processes worked well and the participants rated the experience very highly. By most standards, a resounding success. The only catch, Heathrow in particular, and pretty much any airport that would want to integrate these processes, would require considerable physical modifications. Given the infrastructure of today's airports, these systems simply do not scale.

  • Australia's SmartGate is in a holding pattern as integration issues add six months to the originally scheduled public launch date. Apparently, the kiosks and gates are in place but a range of "unforeseen integration issues" are to blame. The readers and kiosks are having trouble talking to each other.

  • Sophisticated biometrics ATMs designed for individuals who cannot read or write installed by the Central Bank of India in Vaisahli worked for less than 10 days. The issue? They ran out of cash.

  • US Border inspectors rarely rely on the optical memory stripe "laser visas" issued to Mexican Nationals who routinely cross the border. 9M+ cards and nearly $60M dollars later, there are nowhere near enough readers installed. And even if there were, enforcing universal screening would create unworkable delays crossing the border. According to one consular officer, the lines would stretch from Tijuana to Cabo San Lucas.

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    ...and the TWIC delays keep coming

    Let's not all jump up in dis-belief at once. Once again, I must excuse my sarcasm but once again, the initial implementation date for the TWIC program has been pushed back (the original date was 2003). And this is just for enrollment and card issuance; there is currently no date certain for the deployment of readers. Though given the state of the Mexican National laser visa program (see previous section), the failure to anticipate US-VISIT exit issues, the painstakingly slow pace of full fledged Registered Traveler capabilities, and the controversy surrounding and pushed back deadlines for REAL-ID, are any of us surprised?

    This scenario has become far too familiar in the US. Large scale ID programs integrally tied to key national security issues launched with little debate and much fanfare languishing due to any number of unanticipated social, political and technical obstacles. Perhaps the creation of large scale, technology based identification systems require more than a frenzy of legislation and a 200 page RFP. The sad truth is that with all the post 9/11 national security hype, it seems the US government has accomplished painfully little to guide the development of viable, secure, privacy sensitive large scale identification systems.

    A more thoughtful and measured approach may be the most promising answer to address the issues associated with these programs. More strategy, planning, proto-typing, testing, and transparent debate are required to fully define the problems that need to be solved as well as the implications of proposed solutions before grandiose plans are launched and details are left to be filled in at a later date.

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    Counting on Mobile Biometrics

    The US Census Bureau goes biometric. In an effort to radically increase efficiency and accuracy, and reduce costs, the US Census Bureau will be distributing handheld biometrically enabled PDAs to facilitate counting the masses. 500K customized units will help save an estimated ONE BILLION dollars. Much of the savings comes from reduced printing costs — the bureau won’t have to print paper address books, millions of paper maps, and about 40 million paper questionnaires. The biometrically enabled units will also help to achieve compliance with privacy standards and reduce census taker liability BUT convenience and cost savings are the bottom line for the single largest deployment of mobile biometrics in the world.

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    Copyright 2007 Acuity Market Intelligence, LLC. All Rights Reserved.
    The editor makes no guarantees on the opinions expressed herein. This publication may be forwarded electronically in it's entirety. However, no part of this publication may be published in any form without explicit consent of the publisher.

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