- Prominence of mobile biometrics in the biometrics market
- Fingerprint, the most significant biometric system in the contemporary world
- Future of biometrics, iris, face recognition, etc.
In this age of rapid transformation, where information technology has spread its wings through several facets of our lives be it personal, professional or social. The security breaches (such as WannaCry ransomware attack in 2017), identity thefts and data hacking have all plagued the consumers. Biometric technology powered devices (fingerprint, face, iris, vein, signature, voice recognition, etc.) provide more secure, reliable and consumer-friendly alternative (based on human physical or personal behavioural traits for authentication, which are unique to individual consumers and are almost impossible to replicate) to traditional identification tools using passwords, physical ID cards, etc.
According to the TechSci Research, the global biometric market was valued at $12.8 billion (2016) at a CAGR 21.6% (2009-16) and is estimated to reach $29.4 billion (2022) with a CAGR 14.8% (2016-22) on the back of rising adoption of biometric tools across banking and finance, government (e-Governance processes, e-passport and national identity card programs and immigration services worldwide), consumer electronics (smartphones, tablets, smart cards, etc.), defence, healthcare and several other sectors.
The widespread adoption of biometric devices across various sectors and industries, regardless of their type, size, shape or geography has led to a fall in the prices of biometric hardware and software (especially fingerprint scanners) and has opened a huge range of opportunities globally. Fingerprint recognition systems, which were earlier used only in high-security facilities or restricted areas are now commonly available (office doors, server rooms, schools, banks, POS, etc.) and currently occupy a dominant position among all biometrics.
At present, North America is the largest market in terms of the demand for biometric systems (32% of the global demand) on the backs of strong federal and local government spending for security infrastructure as well as other research and development programs. The region is closely followed by the Asia-Pacific and Europe with a market share of 28% and 22%, respectively.
The mobile biometrics recently gained significance with smartphones and tablets requiring data protection as more and more users increasingly carry out significant functions through mobiles. Moreover, earlier only flagship or high-end smartphones were equipped with fingerprint scanners, but nowadays even a mid-tier ($100) smartphone offer capacitive fingerprint sensor.
Televisory’s analysis of the impact of growing market appetite for the biometric security/identity systems on key players in biometrics market confirmed the same trend.
There has been an exponential growth in the revenue as well as profitability margins for Fingerprints Cards AB and Precise Biometric (both catering to the smartphone markets) in last 2 to 3 years on the back of huge order inflows from the mobile biometrics market (mainly from mid-tier smartphones and tablets). While Aware Inc. and BIO-Key International Inc. could not take advantage of the strong growth in the mobile biometrics.
Though fingerprint recognition technology is dominant in the industry, Televisory expect that this technology will be less prominent and anticipate other advanced biometric technologies (such as technologies that identify on basis of facial, iris, DNA sequence, etc.) to gain prominence in the market. For instance, recently launched Apple iPhone X uses ‘face scanner’ and Samsung Galaxy S8 uses compact optical biometric ‘iris scanners’. Aware Inc. is already offering this advanced biometric product, although it has exhibited a stable revenue and margin trend in the past few years. Televisory believe that the company will outperform in the near future as the market for advanced biometrics matures.
While biometric equipment and software companies are set to benefit from new governmental projects to incorporate biometric technologies in several e-Governance processes and immigration services around the globe. The major push is intended from the growth of smartphones, tablets, smartcards and PCs in the mid-term. According to the International Telecommunication Union, nearly 95.5 percent of the population worldwide have mobile connections. Acuity Research estimates the number of biometrics smartphone users to reach 2 billion (2020) at a CAGR 20.1% (2016-20) with virtually all new smartphones shipped being biometric ready (2020).
Acuity Research projects that (2022) global mobile biometric market revenues will reach $50.6 billion annually including $3.1 billion in biometric sensor revenue (through ~2.7 billion biometrically enabled smartphones), $29.2 billion from direct purchase and software development fees (from ~16.7 billion biometric app downloads) and $18.3 billion in authentication fees (from ~1.37 trillion biometrically secured payment and non-payment transactions). Further, with the adoption of mobile biometrics in more consumer-centric markets (mid-tier and low-tier), the authentication volumes will increase substantially and open new avenues for revenue generation for the mobile biometrics (including app sales, authentication fees, etc.). Thus, Televisory expect Asia-Pacific to surpass North America (2022) on the back of increasing focus on mobile biometrics (with Asia-Pacific covering over one-third of the world population).