Biometrics industry stocks this week
Naysayers about the direction of stock markets continue to get it wrong. Share indexes have started 2018 with a bang.
This week the Dow Jones Industrial Average moved past the 25000 point mark for the first time in history. The Nasdaq market set its own record, closing above 7,000 on Tuesday. It would be folly to expect the Nasdaq to go on to chalk up another 37-percent annual advance in 2018 as it did in 2017. Prudently, many fund managers are preaching caution in terms of market exposure. That’s solid advice. Valuations seem stretched. But then markets go on to post a new record. So what to think? Market analysts credited a strong jobs report for the record Dow this week. Employment growth is (arguably) the best indicator of real and solid economic growth. That is, maybe the optimism is justified? Whatever the case, and whatever direction stock markets take over the year to come, it can be said without a doubt that 2018 has got off to a great start.
The optimism should extend to the biometric technology sector. As the flood of end-of-year Top Ten articles appeared, the Equifax breach made it onto several lists as one of the important events of last year. The amount of data stolen in the hack was massive. Data on more than 145.5 million Americans was lost. That’s almost half of the population and was a breach far bigger than the Uber or Yahoo leaks. The takeaway has generally been that the world has changed. The existing digital security regime has to be updated. As security systems are revamped payments systems will also evolve in 2018. As a story in major Toronto newspaper the Toronto Star put it, “Biometrics will play a growing role in shopping; the use of facial recognition, fingerprints, voice ID and so-called ‘retinal payments’ (using a smartphone to scan one’s eyes) to verify transactions will reduce time at the checkout and guard against fraud and theft.”
Those in the industry should consider these trends for what they are: Instant product demand. There was some talk late in the year about how the iPhoneX introduced face recognition to the retail crowd. But the phone also cost $1,000, and that seemed to turn some people off. Sales through Christmas weren’t quite what Apple hoped. And so the emergence of retail-level face recognition technology may have slowed a bit. But there are many other products just now coming to market that are about to make biometric technology much more of a presence in the everyday items consumers use.
It could be the case that 2018 is the year a much wider percentage of the population gets used to having a fingerprint-enabled credit card. FIDO specifications concerning smart cards came into place at the end of 2016 laying the groundwork for this new market. One publicly-traded company hoping that fingerprint-enabled smart cards hit a tipping point in the year ahead is Las Vegas-based SmartMetric Inc.
The company has been working on a credit card with an inbuilt fingerprint scanner that reads the card user’s fingerprint and activates the cards EMV chip as it is being inserted into a retail card reader or ATM. The basic advance here: Only the legitimate card holder can use the card. Ingeniously, SmartMetric created a self-powered, fully functional fingerprint scanner that inside the cards. A miniature power management system recharges the card as it is being used in card readers. Will 2018 be the year that we see widespread deployment?
To generate interest in the market as the product ramps up to commercial release SmartMetric prepped the ground with a PR campaign. A couple months ago the company released results of a survey that quantified some of the fears people have around credit card fraud. According to the company the emotions surrounding financial fraud are serious and significant in the minds of a bank’s customers. That is, the economic cost for a card issuing bank when it comes to fraud can be longer lasting and more costly than the immediate losses from the fraud. According to the results of the survey: 81% experienced frustration or annoyance; a solid 69% of victims experienced fear regarding their personal financial security. A majority of victims, 58%, experienced rage or anger, as well as a loss of ability to trust and feelings of betrayal. That is, maintaining the personal security of accounts is key for any financial institution–the market for more secure cards should be large.
To maintain interest in the product the company issued a press release a couple months back pointing out that the chosen format for the card is the right choice. SmartMetric payment chips are based on the EMVco format. (EMVco is a standards and licensing body originally founded by Eurocard, MasterCard and Visa.) All other major payments networks are now members of EMVco. According to the SmartMetric press release: More than six billion cards have been shipped with the EMV Chip. Initially production of the card will be limited to one million a month. But the company has a plan to be able to ramp up production as adoption expands. This week, the company announced that Protec Secure Card has been appointed the national distributor for SmartMetric’s biometric security cards within the USA. They are also in the process of appointing distributors in Europe, Mid East and Latin America. “After years of R&D, now having a functional card with the company’s miniature biometric technology inside, the company is now finalizing the appointment of product distributors and manufacturers representatives in strategically key geographic regions around the world,” said president and CEO, Chaya Hendrick.
Could this be the year when the company’s products flood this new, expanding market? SmartMetric does have competition. Gemalto has announced that Bank of Cyprus will introduce a biometrics-based contactless card later this year or early next. But it seems safe to say that 2018 could be the year when fingerprint-based smart cards become ubiquitous.
Other products coming to market right now include enterprise-wide biometrics-based identity systems for corporate facilities. Typically RFID cards have been used by companies to manage access to the office. But biometric products are rapidly replacing RFID and are being used to create new levels of corporate security for important assets such as corporate records.
BIO-key International announced in the days before Christmas a new $4 million order for its enterprise-wide fingerprint-based biometric authentication platform. The contract includes maintenance services. It’s an existing client, a Fortune 500 company. The order builds upon an initial deployment last year. The client needed a strong authentication system that manages the ability of several hundred thousand of the customer’s global personnel to access client records. BIO-key expects to record USD $2.5 million in license revenue in the quarter ending December 31, 2017 (and then across the next three years). According to Jim Sullivan, senior vice-president of strategy and business development, “This sale validates the strength and capabilities of our robust software, along with the critical market need for user-friendly, scalable biometric solutions to relieve enterprise users from the frustration of passwords, tokens, cards and keys as authenticators. It also represents another large scale deployment of BIO-key’s unique server-based biometric management approach. We are pleased this customer has rejected the limitations of ‘on-device-only’ authentication for their hundreds of thousands of employees.” BIO-key’s TouchLock line of fingerprint and Bluetooth-enabled padlocks are also in the market now. These new products are demonstrating to retail customers the world over that biometrics-based technology can be engineered into everyday items. The ubiquity of biometric technology in small consumer items like credit cards and bike locks will be a theme for the year ahead.
But even as the number of products available expands, the systems now in place are being continually improved. Also recently ImageWare announced it had upgraded its GoVerifyID platform so that it supports palm image recognition (via biometric algorithms from Fujitsu). The system will also have a six-digit PIN feature if biometrics are not available. According to ImageWare CEO Jim Miller, “By increasing the number of options for biometric and non-biometric authentication methods, ImageWare gives users and organizations the ultimate in choice, flexibility, user assurance, and security.” At a time when data heists have become too familiar many will be heartened by the evolution of the security system now occurring. Biometrics-based devices, cards and rings are going to become much more common this year. That seems very clear.