Your critical lens on the world of biometrically enabled identification solutions

Volume 2, Issue 5


September 2007

Inside this Issue

- Editor's Intro
- "The REPS Biometric Directory"
- Acuity Presentations & Recommended Events
- EURODAC Reports
- Big Brother's Biometrics
- UK ID Card Off and Running
- NFC Market Opens Doors
- The New State of the Biometrics Market


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Paranoia... or Precaution?

I cannot help but be unnerved by the increasing frequency with which news relating to assaults on privacy and civil liberties is finding its way into my email inbox. This is far more than a few privacy advocates railing on about the dangers of technology. The revelations represent a genuine and significant shift in prevailing wisdom in regards to how government and commercial entities conduct themselves and the level of accountability (or non-accountability) they are willing to accept.

For more than 20 years, I have been actively engaged in the development of emerging technologies and the markets that exploit them. As a technology advocate, I have always believed that potential benefit or harm is not inherent in the technology itself but rather it its application. And while I have had reservations about some of the applications of some of the technologies and products I have helped bring to market; the benefits have clearly and consistently outweighed the potential danger or harm. I belevied that in the end it was the best of the technology potential, not the worst that would triumph and be adopted for mainstream use. Furthermore, involvement by those who hold this perspective is in fact a crucial component of making it so.

And while I remain a 'true believer" in the real benefits that biometric can deliver, I must admit to being increasingly concerned with motives and perspectives of some of the individuals and organizations advocating this technology. For the first time, I wonder about the capability I am helping to create and if there is a dangerous road we may go down from which there is no return.

Lest we fool ourselves, the creation of large-scale, broad-based biomtrically enabled identity infrastructures have genuine and far reaching privacy and civil liberties implications. The "greater biometrics community" (of which I consider myself a proud member) must assume some responsibility for the outcome as we develop and promote biometrics.

As the mother of a bright and beautiful 2 year old, I like to use the Parent Rule. Simply stated: How do I ensure that what I work to create in this world increases my child's opportunity for life, liberty, and the pursuit of happiness? This is the benchmark I propose while we busily advance the business of biometrics technology.

This edition of the eUpdate highlights some of these grave issues as well as reviewing a few somewhat less gloomy topics in the biometrics marketplace. These include reporting on momentum building in the voice arena, a progress report on EURODC, the starting gun for the UK ID card, as well as developments for NFC which have interesting implications for biometrics, and finally, some recent reflections on the current sate of the biometrics market which are a precursor to a paper entitled "The NEW State of Biometrics" that Acuity will be publishing later in the last quarter of the year.

Oh, and for those that might not notice, I inserted the word "critical" before "lens" in the tag line for the eUpdate. It now reads "Your critical lens on the world of biometrically enabled identification solutions". A little picayune perhaps, but given some of the feedback I receive, a little more reflective of the content.

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


C. Maxine Most

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C. Maxine Most
Acuity Market Intelligence


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The REPS Biometric Directory

The Definitive Resource Guide to Biometrics Industry Players

... shameless self promotion time...

In association with REPS Consulting Services, Acuity Market Intelligence is pleased to present The REPS Biometrics Directory ... the only interactive industry directory available in the market today.

This online reference tool is built on a dynamic searchable database that is continually updated to provide accurate, reliable, and comprehensive information on over 650 biometrics industry players worldwide. An annual subscription provides unlimited access to the interactive, online database.

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Acuity Market Intelligence is the exclusive marketing representative for The REPS Biometrics Directory - a product of Recruitment and Engineering Products and Services (REPS) an IT security and data protection consultantcy based in Winter Park, Florida.

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EURODAC, the first common AFIS within the EU, was designed to prevent EU "asylum shopping" where individuals go from one Member Sate to another in hopes of finding a country that will grant them asylum. The program was was implemented to support asylum claim processing under the Dublin Regulation of February 2003 which determines the Member State responsible for examining an asylum application.

Initial reports indicated the system paid for itself in the eh first 17 days of operations by "asylum shoppers" and saving EU Member States from providing benefits to those who did not legally qualify. the program paid for itself in short order, identifying thousnads of "asylum shoppers" within the first month of operations. The latest annual report, published this month, indicates that not only is the program identifying these individuals but it appears to be having some deterrent effect as well.

In many ways it is a shining example of how a large-scale biometric based identification program built around a centralized database can solve a fundamental identity problem without infringing on privacy or civil liberties.

  • Access to this system is restricted to the sole purpose stated in the EURODAC Regulation.

  • The database does not contain personal details relying only on biometric comparison to check for duplicates.

  • Each participating state ensures that the national supervisory authority on data protection independently monitors the lawfulness of the processing of the data.

    Bravo EURODAC!

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    Big Brother's Biometrics

    Below is a representative list of some of the headlines that have found their way into my inbox lately.

    - FBI Data Mining Reached Beyond Initial Targets
    - Large databases are not safe enough, says stats boffin
    - Terror Suspect List Yields Few Arrests
    - Secret site houses high-tech law unit
    - [Denver] Fusion center watches for terrorism
    - Spy Master Admits Error
    - Wall St. Sees an Opportunity in China's Surveillance Boom

    That last one scares me the most.

    Is it just me or is there something fundamentally wrong with Wall Street getting fat off investing in surveillance technology used by one of the most oppressive autohritarian regimes in the world?

    The New York Times reports that US Hedge funds are paying for the development of video cameras, facial recognition software, and even behavior-recognition software designed to spot the beginnings of street protests and then automatically notify police. Over the last year, US hedge funds have put more than $150 million into Chinese expectation companies with the expectation that the market will expand from less than $500 million in 2003 to more than $43.1 billion in 2010.

    When I read this, I can only wonder about the capabilities we are creating, how they are used now, and where this will lead in the future. We all know the limits of the technology and we often downplay negative outcomes based on the assumption that the systems will be well managed and monitored by organizations and individuals with good intentions.

    Sadly, we also all know this is not the case. Every large-scale identification system will not be a EURODAC. And even well developed and managed systems can be put to questionable use by individuals and organizations with good and bad intentions alike.

    What is the answer? I wish I knew. But at the very least, technology, product and solutions developers and implementors should do their best to ensure - to the greatest extent possible - that safeguards are built in to biometric based systems at every level. In the long run, this is not just the right thing to do, but sound business practice as well. While there currently seems to be increasing public support for the use biometrics by government and commercial enterprises, public trust is easily lost. A few nefarious or even muddled deployments could provide fuel for the anti-biometrics fire and have dire consequences for the long term viability of the industry ...let alone the legacy of facilitating control by anti-democratic regimes around the world.

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    UK ID Card Off and Running

    Speaking of large-scale biometric ID programs and muddled deployments,the UK identity card looks to be coming closer to reality. Competition for the $2 billion biometric national identity card system began with the publication of a notice in August inviting suppliers to get involved.

    This month about 50 suppliers met with the UK's Identity and Passport Service (IPS) to review the up coming procurement. THe next step will be pre-qualification of suppliers for a "framework agreement" that allows the IPS to procure what it needs from a "pool" of suppliers.

    As expected, all the big SIs as well as all the AFIS players are hoping to eat from this $2 billion trough. The real issue, however, may be the viability of the program itself. Professor John Daugman of Cambridge University, better known and loved as "the father of iris", has raised serious concerns about the ability of a finger based ID solution to meet the program requirement of "uniquely" identifying individuals in a population of 60 million people.

    Professor Daugman was interviewed by the BBC and spoke out earlier this month at Biometric Consortium Conference promising to follow up with a paper on the subject. Those of us that heard his talk at Biometrics 2006 in London last October were already daunted by his use of numbers of astronomical proportion to explain the computations required to assure there are no duplicates in a database of 60 million. He freely admits his bias towards iris yet his "objective" claims seem to have been ignored by the IPS. FOr now, the IPS has closed the door on iris.

    This one will be interesting to watch especially as the AFIS vendors line up to sell their wares and make claims about matching accuracy, transaction volumes, and speed.

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    NFC Market Opens Doors

    This whole near field communication arena is really interesting. Mobile phone operators, transportation service providers, and retailers are testing and launching this technology for various types of payment processing in Eurpe, Asia and the US.

    • The Dutch retailer - Schuitema - gave RFID-enabled phones to 100 customers, who use the devices to receive deposits from bottle-return machines, make charitable donations and pay for purchases.
    • Cellular South is conducting a two-city trial (Jackson and Memphis Tennessee) in which customers can buy goods using RFID-enabled, biometric Kyocera phones.
    • Philips and SK Telecom are launching a trial in Seoul, Korea, that will let participants use their mobile phones to download music, unlock doors and pay for goods and services.

    • Orange has confirmed it will quickly expand its launch of NFC services to other cities in France, then to Europe, following its planned “rollout” of NFC services in the southwestern city of Bordeaux early next year to pay bus and tram fares, make purchases and accumulate loyalty points in stores, and download promotional information from smart tags in posters.
    • France-based Veolia Transport, which runs bus, rail and other transit networks in several European cities and has launched a mobile-payment trial in France using phones that support NFC technology.

    After years of pining, planning, and promise, the mobile payment market may actually materialize. This is GREAT news for biometrics. As NFC capability proliferates, longed for mobile applications will spread across retail, commercial, and government sectors. Transaction volumes will soar as will fraud, theft, and ownership (idenitiy) issues. As adoption and comfort levels rise, so to will the complexity and the value of these transactions. We will become utterly dependent on our personal mobile devices and highly concerned with both the physical security of the devices and logical security of the access they offer. Still think iris recognition on a mobile phone is overkill?

    For more information on NFC, visit the NFC Forum website

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    The New State of the Biometrics Market

    The following is an introduction to a market analysis brief Acuity will be publishing the last quarter of the year. The gist of the analysis is an update on the current state of the biometrics market in terms of technology adoption lifecycles. Six years ago when I first entered the biometrics market fray, I offered this classic technology adoption model as a framework for individual players to leverage market opportunities as well as a means for advancing industry market development as a whole. Today, I would argue that the dynamics of the market have fundamentally changed and require a modified approach to strategic market development.

    The market for biometric is in a strange state and will most likely not follow the typical path of disruptive technology adoption. Biometrics have been considered a disruptive innovation on the verge of breakthrough for an extended period of time. The breakthrough has not happened for 2 significant reasons. The technology has not delivered on its promise in terms of capabilities and an appropriate solutions context has not been developed to leverage the capabilities that have been available.

    Post 9/11 security concerns created an expectation of rapid market acceleration that never materialized. In terms of classic technology adoption as defined by Moore's "Crossing the Chasm" and "Inside the Tornado ", this would translate to an expectation of rapid Chasm Crossing from early to mainstream markets, followed by Bowling Alley Development, and the ensuing Tornado. However, this process did not occur.

    Instead, over the past six years the market has essentially passed over the Chasm and stalled out. This is due to the failure of market players to develop complete solutions based on existing technology capabilities. The focus has been on incremental technology performance improvements. This has created a market dynamic where biometrics as a class of disruptive or discontinuous technology has not moved completely through its revolutionary market development cycle and yet is now subject to significant evolutionary or continuous innovation.

    While there is clear momentum towards solution development, this development is likely to take a linear growth path rather than the exponential growth path most readily associated with Moore's technology lifecycle based on disruptive innovation. Rather than the typical "hockey stick" curve of recent innovations such as mobile phones or the Internet, biometrics adoption will mimic the growth curve of ATMS, which achieved nearly 70% adoption through linear growth over a period of 20 years.

    This has significant strategic market development implications. It impacts market segmentation, target assessment, and market penetration planning. Vendors must simultaneously manage progress towards market expansion into large looming market opportunities while rigorously and systematically building a niche penetration strategy. In a more typical scenario, the niche penetration strategy would precede concern with larger opportunities and would simply be considered a process for dominant category positioning to leverage the ensuing "Tornado" phase.

    Rather than taking the mantle of champion of disruptive innovation, Vendors should consider focusing on providing the evolution that delivers on the promise of biometrics by providing working solutions to real problems. Biometrics that actually work. Thus, laying the foundation for the kind of strategic effort required to establish a near-term market penetration platform from which large-scale market development efforts can be launched. Simultaneously focusing on and managing to near and longer-term evolving market opportunities.

    ... Stay tuned for more on The NEW State of the BIometrics Market. eUpdate subscribers will receive a discount on the 12-15 page analysis breif scheduled for Q4 '07 publication.

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    Acuity Presentations & Recommended Events

    Want more from Acuity up-close and personal? Acuity's Principal, C. Maxine Most, will be speaking at the Biometrics 2007 in London on October 17 and at the ID World conference in Milan on November 26. See you then!

    Acuity and the eUpdate are proud sponsors of the following events:

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    Additional Services

    For custom research, analysis or strategic market development consulting, visit Acuity Market Intelligence or call +1 303 449 1897



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