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Security Concerns Catalyse Biometrics Markets

2002-07-15 admin

Mounting security concerns in the aftermath of September 11 have galvanised the nascent biometrics industry. Unprecedented levels of media attention have added to the buzz surrounding biometrics, driving its acceptance as a mainstream technology.

The surging interest in biometrics is now evident across multiple spheres - governmental, commercial and consumer.

Throughout the globe, governmental initiatives on security are being directed towards developing advanced biometric technologies and products. This trend is extending into the private domain where corporations, especially those in the U.S., are in pursuit of biometric solutions to safeguard both human and physical resources. Individuals too are revealing greater awareness of, and receptivity to, biometric technologies and attendant privacy trade offs.

According to latest findings from international market consulting company Frost & Sullivan, the need for enhanced security technologies post September 11 will trigger phenomenal levels of growth. The total global biometrics market, which was valued at $93.4 million in 2001, is projected to leapfrog to an astounding $2.05 billion by 2006.

In terms of application market share, access control/time and attendance is expected to continue accounting for a major chunk of revenues. With corporations, government agencies, and the military dedicated to averting attacks on information systems, the use of biometrics in network security is also likely to show a related rise.

As vendors move to capitalise on the huge potential of the security market, the most remarkable growth in market share will come from the use of biometric technologies in government and law enforcement.

For instance, a market for homeland security solely in the U.S. is estimated to generate over a billion dollars in the short term.

“Several legislations have proposed the mandatory use of biometrics as identifiers at airports and other borders and immigration points and for surveillance purposes to identify known criminals and terrorists. These legislations have also suggested allocation of large sums of money for the purpose of building the technology infrastructure,“ explains the Frost & Sullivan study.

Indeed, homeland and airport security compulsions bolstered by the passage of new legislation are likely to create a profitable market in the North American region. This geographical area will account for the largest share of the total global biometrics market.

“Renewed interest and expansion of biometric applications into the travel arena will boost sales in the North American region, comprising the U.S. and Canada, to a large degree. Some vendors have postponed or scaled back their plans of expansion into other regions of the world due to the enormous potential that has emerged in North America itself. However, the region will slowly lose market share during the forecast period as other regions gain exposure to biometrics and realise its benefits,” observes the Frost & Sullivan study.

A domino effect will be evident in Europe and the Middle East. As these regions increasingly adopt biometrics in an attempt to address heightened threat perceptions, they will experience significant growth levels albeit not as strong as that of North America.

The presence of a large number of vendors whose principal market is Europe will also stimulate market expansion in the region. Widening use of network security applications by enterprises is expected to further underscore growth in both Europe/Middle East and the Asia Pacific region.

Rising levels of demand in Asia Pacific will be augmented by greater governmental focus on security and the growing deployment of biometrics products to promote consumer convenience.

With the prospect of exceptionally high growth rates in most regions, the biometrics industry will have to fend off the external challenge posed by technological alternatives such as card-based systems.

Internal competition is also expected to intensify both within the different technology segments in biometrics as well as among vendors of biometrics technology.

The early ascendancy of finger-scan biometrics is likely to wane due to the emergent popularity and uptake of other biometric technologies. “In particular, facial recognition and iris recognition will appreciably enhance market share due to their enormous potential in the travel industry for secure access control, passenger verification, and surveillance applications,” notes the Frost & Sullivan study.

Currently, only a handful of public companies and several small private ones are in the fray for market share. However, this lucrative market is likely to attract new entrants — primarily large companies. Consequently, industry consolidation is expected to be the corollary as such companies increasingly opt for the mergers and acquisitions route rather than plough a lone furrow.

As security issues move centre stage on the global agenda, biometrics will come to occupy the spotlight as a potent weapon in the battle against terrorism.

www.frost.com

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