GLOBAL BIOMETRICS MARKET IN THE RETAIL SECTOR

Transcription

1 GLOBAL BIOMETRICS MARKET IN THE RETAIL SECTOR TECHNAVIO.COM Downloaded by pl-wspiz-ok from at :30:36 GMT. EMIS. Unauthorized Distribution Prohibited.

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3 Table of contents PART 01: Executive summary 5 Highlights 5 PART 02: Scope of the report 6 Market overview 6 PART 03: Market research methodology 7 Research methodology 7 Economic indicators 8 PART 04: Introduction 9 Key market highlights 9 PART 05: Market description 11 Working of biometrics 11 Biometric technologies used in retail sector 13 Applications of biometrics in retail sector 15 Advantages and disadvantages of biometrics in retail sector 16 PART 06: Market landscape 17 Market overview 17 Product life cycle of biometric technologies in retail sector 18 Share of retail sector in the global biometrics market 19 Global biometrics market in retail sector 20 Five forces analysis 22 PART 07: Market segmentation by technology 23 Global biometrics market in retail sector by technology Global fingerprint identification market in retail sector 25 Global facial recognition market in retail sector 26 Global hand geometry recognition market in retail sector 27 Global vein recognition market in retail sector 28 PART 08: Geographical segmentation 30 Segmentation of global biometric market in retail sector by geography Segmentation of global biometrics market in retail sector by geography (revenue) 31 PART 09: Market developments 34 PART 10: Market trends and opportunities 36 PART 11: Market inhibitors 40 PART 12: Vendor dynamics 42 Vendors matrix 42 Description of major vendors 44 Vendor news updates 49 Other prominent vendors 51 PART 13: Key vendor analysis 52 Crossmatch Technologies 52 Honeywell Security 56 M2SYS Technology 62 NEC 69 Safran 75 Suprema 80 PART 14: Appendix 87 List of abbreviations 87 PART 15: Explore Technavio 88 `` 3

4 List of exhibits `` 4

5 2015 MARKET SIZE $624.6 MILLION 2020 MARKET SIZE $1,640.3 MILLION PART 01: Executive summary 2015 MARKET GROWTH RATE 33.32% 2020 MARKET GROWTH RATE 17.37% Highlights Biometrics in retail sector is likely to grow with the emerging trends such as mobile biometric payments, voice biometric workforce management, and biometrics in wearables North America is one of the major revenue contributing region in the market in terms of geography, followed by Europe and APAC In our opinion, the major vendors in this market could focus on expanding their customer base with the help of strategic alliances, development of innovative products and engaging in R&D activities It is believed that iris recognition biometric in retail sector will gain traction by 2020 because iris scanners can work in dirty and harsh environment and are capable of integrating with time and attendance equipment's. In addition, vendors are coming up in the market with hand-held iris biometric devices with technologically advanced processing power, camera resolution, and illumination Fingerprint identification is the most commonly used biometrics solution in the retail sector. However, the integration of facial recognition in surveillance systems has been a major development in the market Vendors are expected to develop new range of biometrics solution with dual authentication capabilities such as using manual PIN entry and facial recognition technology Vendors are providing point of sale (POS) system embedded with fingerprint technology to prevent employees from clocking in for each other 5

6 Market overview This report covers the present scenario and growth prospects of the global biometrics market in the retail sector for The report also presents the vendor landscape and a corresponding detailed analysis of the top six vendors operating in the market. PART 02: Scope of the report To calculate the market size, the report considers the revenue generated from the sales of biometric solutions in the retail sector, including the following: Hardware: Sensors, modules, readers, and cameras Software: Biometric analyzing software and databases Integrated solutions and services: A combination of hardware and software solutions offered by vendors or third-party providers. Services also include cloud and hybrid biometric services The revenue generated from after-sales services is not considered. The report provides a detailed analysis of the following: Technologies: Fingerprint identification, facial recognition, hand geometry recognition, and vein recognition Geographies: North America, Europe, APAC, Latin America, and MEA The market is fragmented with the presence of many small and large vendors. A detailed product and feature comparison of the key leading vendors is provided in the report. In addition, the report discusses the major drivers influencing market growth and the challenges faced by vendors and the market as a whole. It also examines key emerging trends and their influence on current and future market scenarios. 6

7 Research methodology This Technavio report is based on the synthesis, analysis, and interpretation of information about the global biometrics market in the retail sector collected from specialized sources. Technavio analysts have derived insights using a mix of primary and secondary research with an aim to provide a holistic picture of the market. PART 03: Market research methodology Primary research Vendor briefings Interviews with industry experts and centers of influence Telephone and online surveys Secondary research Proprietary tools and databases Company reports and publications Webinars and podcasts Industry journals and publications Qualitative analysis Drivers, challenges, and trends Vendor analysis Quantitative analysis Market size and market share Statistical models Top-down approach Bottom-up approach 7

8 Economic indicators Technavio has conducted a detailed study of the global economic conditions and other economic indicators to assess their impact on the current condition of the global biometrics market in the retail sector and to make informed predictions about future market scenarios. Microeconomic indicators Mesoeconomic indicators Macroeconomic indicators Data collection and analysis 8

9 Key market highlights Key customer segments Key market developments Retail Emergence of contactless biometrics PART 04: Introduction Key market growth inhibitors Integration of facial recognition in surveillance systems Security concerns NFC-based payments Key market trends and opportunities High cost of deployment restricts adoption Incorporation of biometric workforce management systems at retail stores Vulnerability of biometric systems Multimodal biometrics for time and attendance Cloud-based biometrics for time and attendance Lack of standardization of biometrics Introduction of biometrics in wearables The increase in cases of employees engaging in buddy punching and time theft, product theft, and excessive breaks during work hours in the retail sector has raised demand for security technologies. There is a need for highly reliable and accessible personal authentication and identification systems. Biometrics has emerged as a suitable security and monitoring solution to meet this need and is based on the behavioral and physiological characteristics of an individual, which are difficult to replicate. Biometrics in the retail sector is seen as the most accurate and reliable system because it eliminates manual input, identity card exchange, and time theft. Biometrics include the authentication of an individual by evaluating one or more unique biological traits, such as voice recognition, hand geometry, fingerprint identification, 9

10 facial recognition, iris recognition, and vein recognition. In addition, biometric technologies are considered to be more reliable compared with physical devices and numeric codes. As a result of the advances in hardware, sensors, readers, pattern recognition, and signal and image processing technologies, a number of biometric technologies, such as keystroke, ear, electroencephalogram (EEG)/electrocardiogram (ECG), gait, and palm print recognition, have been developed to deal with the identification of individuals. Biometrics in the retail sector help organizations to gain complete and accurate visibility regarding the workforce by having real-time information regarding their reporting and leaving time. In addition, it enables organizations to gain better insights into the employee's work and time spent in the work. Biometrics is being used in the retail sector for monitoring, identification, and access control purposes. Passwords and tokens are seen to be vulnerable, costly, and hard to manage, which has led to increased demand for biometric-based identification in the retail sector to monitor the attendance and efficiency of workers. Since e-commerce is gaining traction, biometric access control systems can be used to recognize an employee, track his attendance, and provide him access to secure areas of the store, such as the warehouse. 10

11 Working of biometrics Working of biometrics Enrollment Capture Process Store PART 05: Market description Verification Capture Process Compare No match Match Source: Technavio, 2015 Biometric identification technologies collect and analyze an individual's physiological and behavioral characteristics. The technology includes three components: Reader or scanner: Captures an individual's fingerprint impression, facial image, vein pattern, voice pattern, and iris image through the use of a sensor Software: Converts the captured biometric information into a digital format Database: Stores the biometric data for comparison The live scans of captured images are digitally processed and stored in a biometric template to be matched to establish identity. Some of the biometric technologies used for authentication are as follows: Fingerprint recognition Hand geometry recognition Vein recognition Facial recognition Iris recognition All the above-mentioned technologies verify individual identity through the use of a sensor that captures biometric traits. Biometric algorithms analyze the captured traits and match these with the traits stored in the database template. The working of biometric technologies involves two steps: 11

12 Comparison or classification: An individual's fingerprint, vein, iris, retina, facial characteristics, and voice pattern are compared with a stored template Decision-making: The software decides whether the new data matches on the basis of a threshold match score, and generates accurate identification and verification results. If the score varies considerably from the threshold score, it raises an alert of suspicious activity Components of biometric system Sensor Biometric sensors are available in three forms: Semiconductor sensors, optical sensors, and ultrasound sensors. These sensors are used to scan fingerprints, veins, facial characteristics, the iris, the retina, and voice patterns of individuals; devices then convert the input into a digital format and transmit this information to the processing device. Signal processing algorithm Signal processing involves the use of algorithms to simplify complex physiological signals for diagnosis and verification. Data storage Biometric data is created from the physiological characteristics of a person. These include images of fingerprints, the iris, the retina, facial characteristics, and voice patterns of an individual. Data is stored in a biometric template at a centralized database to be used to verify identity. Matching algorithms Matching algorithms combine minutiae points of both the input images and template images to determine the number of corresponding minutiae pairs. The maximum number of corresponding minutiae pairs indicates the best alignment or match. Decision process This stage involves the decision-making about the identity of an individual based on results derived from matching algorithms. 12

13 Biometric technologies used in retail sector Biometric technologies are increasingly being used in the retail sector for employee identity management, time and attendance recording, employee accountability, payroll management, absence management, inventory access control, and transactions at the POS payment authentication. Fingerprint identification During the enrollment process, the fingerprint scanner scans an individual's fingerprint to capture the pattern of ridges and valleys. An authentication system compares the scanned image to the stored image of ridges and valleys to verify the identity of an individual. Fingerprint biometrics is being used in the retail sector for time and attendance recording, authentication for mobile payments, securing online customer payment information, and identification purposes. Facial recognition During the enrollment process, the facial scanner captures the distinguishing features of a face, including the distance between the eyes, the width of the nose, and the length of the jawline, and it creates a database template of the face. The facial recognition software enables the recognition of an individual's face by considering the different angles and facial expressions and then matches the features with the database template for identity verification. Facial biometrics is being used in the retail sector for various purposes, such as identifying shoppers and shoplifters when facial recognition is being deployed with a CCTV system. In addition, it is useful in the retail sector for determining the age, gender, and facial expressions of customers in order to target them for marketing and promotional activities. Iris recognition During the enrollment process, a camera records images of an individual's eyes with both ordinary and invisible infrared light. The iris pattern of an individual is stored in a database template; the pattern is then matched with records stored in the database to confirm the identity of the individual. Iris biometrics is being used in the retail sector for various purposes, including for online account login to replace online passwords, calculating employee hours, eliminating ID card exchange, and the identification of employees. 13

14 Vein recognition Vein recognition biometrics includes both palm and finger vein technology to authenticate the identity of an individual based on the unique vein patterns in an individual's palm and their fingers. Vein patterns are located beneath the skin and the flowing blood within an individual's vein is scanned, making it impossible to fake. The vein scanner captures the vascular patterns of an individual's palm, finger, and back of hand for identification. These patterns are scanned and stored in the biometric database template and then matched with records in the database to confirm the identity of an individual. Vein recognition biometrics is being used in the retail sector for physical access control, time and attendance, POS payment authentication, and user authentication for PCs and servers. Hand geometry recognition During the enrollment process, the hand geometry scanner, which consists of a digital camera incorporated with a charge-coupled device, a reflector, and a mirror, captures various black and white pictures of the hand. The features extracted from the hand include the length and width and the varying points of a finger. During the verification process, the scanned pattern is matched with records stored in the database to confirm the identity of an individual. Hand geometry biometrics is being used in the retail sector for physical access control, time and attendance, POS payment authentication, and user authentication for PCs and servers. 14

15 Applications of biometrics in retail sector The adoption of biometrics in the retail sector is likely to be high by the end of 2020 because of the drawbacks of traditional authentication systems, such as token-based electronic access, signature-based access, and PIN-based access in online payments. All these traditional authentication methods have become less reliable because of their vulnerability to hacking. Biometric authentication in the retail sector helps reduce such challenges and is a more secure method for accessing customer and employee data. Some of the applications of biometrics in the retail sector are listed in the table format: Biometric technologies Applications Adoption in retail stores Fingerprint identification Cheque cashing Cardenas supermarkets, US Facial recognition Payment United Retail's Jet stores, South Africa Voice recognition Caller identification Home Shopping Network, US Biometrics is being used in the retail sector for more accuracy and security, thereby preventing employee theft, buddy punching, and payroll fraud. Employee identification: PINs and passwords do not have the ability to protect identity because these can be lost and stolen, resulting in the risk of identity theft. Biometrics in the retail sector ensures the accurate identification of employees, secures the POS system from being hacked, and mitigates the risk of employee identity theft. Increase productivity: It has been seen that biometrics in the retail sector can help organizations to effectively manage business operations, save employee time, decrease staffing overhead costs, and provide more accurate data on employees to the payroll department. Prevent time theft: It has been estimated that employee time theft costs billions of dollars of losses annually, whether it is an extended break, a personal phone call during working hours, late arrival, or buddy punching. Time theft is seen as major obstacle of profit maximization for the organization and efficiency of employees. Biometrics has emerged as a suitable solution in the retail sector to meet this need and ensure the prevention of time theft issues by accurately tracking every employee. Employee accountability: Biometrics in the retail sector helps organizations to gain accurate information about their employees and how they are performing. This 15

16 encourages employees to behave ethically since they can be accurately identified and monitored by the organization, resulting in improved accountability. Prevents inventory loss: The dependency of the retail sector on security cameras, barcode swipe cards, and PINs for inventory management and transactions has loopholes in the prevention of inventory theft. Biometrics has emerged as a suitable solution that ensures loss prevention by providing authorized access to inventory. Advantages and disadvantages of biometrics in retail sector Advantages Accurate identification of individuals Biometric characteristics cannot be duplicated and, therefore, ensure reliable authentication for transactions, document management, electronic signatures, and audit trails Reduces administration costs as it eliminates the need for physical checking and also increases return on investment (ROI) Minimizes chances of identity fraud and buddy punching Eliminates the possibilities of misplaced IDs and forgotten passwords More reliable and capable than traditional security systems such as PINs, smart cards, and one-time passwords (OTPs) Biometrics can be integrated into smart cards to gain access into secure premises Accurate time and attendance monitoring and record keeping Accurate and faster payroll calculation Disadvantages Fingerprint biometric technology has privacy issues Biometric technology is entirely dependent on a person s physical characteristics, which are subject to changes; variations such as a change in retina position, a blurred iris due to a cataract, altered facial features due to surgery, or an incomplete fingerprint due to an injury can render the process invalid The biometric details of an individual needs to be updated regularly due to an individual's ageing, illness, or injury Different biometric technologies require different devices, for which costs may vary significantly 16

17 Market overview Overview of global biometrics market in retail sector Fingerprint identification Technologies Facial recognition Hand geometry recognition PART 06: Market landscape Global biometrics market in retail sector Vein recognition North America Europe Geography APAC Latin America MEA Source: Technavio, 2015 The need for privacy and security of both inventory and employees in an organization is driving the growth of the biometrics market in the retail sector. The shift of organizations in the retail sector from non-biometric technologies, such as PINs and time cards, to biometric technologies, such as fingerprint identification, facial recognition, hand geometry, and vein recognition, will lead to rapid market growth during Demand for biometric monitoring, access control, and security systems in the retail sector is increasing to provide safety and security to infrastructure and employees in general. Fingerprint identification, facial recognition, hand geometry recognition, and vein recognition were the most widely adopted biometric technologies in the retail sector in The introduction of multimodal biometrics in the retail sector reduces the chances of identification and verification errors and helps in gathering information about employees and customers. 17

18 Market value Currently, in North America and Europe the adoption of biometrics in the retail sector is high because of the increased awareness of the benefits of the deployment of biometrics in increasing levels of security in the retail environment and operations activities. In addition, more and more organizations in the retail sector are looking to adopt security systems to improve employee productivity in APAC, Latin America, and MEA, which is likely to increase the adoption of biometrics in the retail sector. Product life cycle of biometric technologies in retail sector Product life cycle of biometric technologies used in retail sector Fingerprint identification Facial recognition Hand geometry recognition Vein recognition Development Growth Maturity Decline In 2015, the overall biometrics market in the retail sector was in its growth stage. Technavio notes that fingerprint recognition is the most widely adopted technology in hand-held devices, mobile devices, and PCs for authentication mainly because of the ease of use and high user acceptance of this technology, which will trigger continuous revenue flow in this market during the forecast period. The adoption of facial recognition is increasing in mobile device payment authentication. For instance, the Samsung S4 and the Apple iphone are embedded with facial recognition technology. The ability of facial recognition technology to recognize the facial expressions of consumers when making purchases in stores can be used as a powerful tool. Marketers can use the data to understand consumer behavior and enhance their product or service offerings as needed. Hence, the 18

19 technology is likely to witness increased adoption in the retail sector during the forecast period. The adoption of vein recognition biometrics in the retail sector is expected to be high because of the drawbacks of traditional authentication systems, such as vulnerability to hacking. Hand geometry biometrics in the retail sector is expected to decline because of the increased adoption of voice, iris, facial, and vein recognition biometrics in the retail sector. Share of retail sector in the global biometrics market In 2015, the retail sector held a market share of 4.24% of the global biometrics market and is expected to reach 5.41% by Biometrics have gained increased acceptance in the retail sector because it provides fast and accurate identification while being extremely difficult to forge and breach. The adoption of fingerprint identification in smartphones and hand-held devices by the retail sector is one of the factors accounting for the current status of the market. The market for biometrics in the retail sector is likely to increase by the end of 2020 because the retail sector is not only focusing on increasing its profits, but also on giving prominence to reducing loss from theft and, more importantly, improving productivity. Share of retail sector in the global biometrics market % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Others 95.76% 95.33% 95.09% 94.89% 94.74% 94.59% Retail 4.24% 4.67% 4.91% 5.11% 5.26% 5.41% Source: Technavio, 2015 In the above figure, other includes sectors such as banking, financial services, and insurance (BFSI); government; healthcare; education; and transportation. The market 19

20 share of the other segment is likely to decrease through to 2020 because of the increased adoption of iris, facial, and voice biometrics in the retail sector. Global biometrics market in retail sector Market size and forecast The global biometrics market in the retail sector was valued at $624.6 million in 2015 and is likely to reach $1.64 million by 2020, growing at a CAGR of 21.30% Global biometrics market in retail sector ($ millions) 3,000 2, % 30.02% 35% 30% 2,000 1, % 19.71% 17.94% 17.37% 25% 20% 15% 1,000 10% , , , % 0% Revenue Growth rate Source: Technavio, 2015 Market analysis Security has become a primary concern for every premises, including commercial and residential, and no one is prepared to compromise on it. There has been a rapid increase in mobile device use in the retail sector for conducting payment transactions. Transaction fraud and security breaches are also increasing, resulting in the need for secure identification systems. Traditional security systems in the retail sector were based on smart cards, PINs, and passwords for identification and authentication. However, the major disadvantage of traditional security systems is that they could be easily stolen and used for malicious and fraudulent activities. Passwords can also be hacked, leading to the loss of critical data and damage to intellectual property. Therefore, biometric authentication is considered to be an exceptionally reliable security solution for organizations in the retail sector because authentication and identification are based on biological 20

21 characteristics and traits, such as fingerprint, facial, hand geometry, and vein patterns, which are unique to every individual and difficult to replicate. The global biometrics market in the retail sector is expected to experience a decline in year-over-year (YoY) growth during the forecast period because of security concerns associated with fingerprint technology, such as fingerprint recreation, which has forced the retail sector to shift toward more secure biometric technologies, such as vein recognition, iris recognition, and voice recognition. Instances Some instances of biometrics in the retail sector are as follows: Crossmatch's U.are.U fingerprint readers have been deployed by Montparnasse Pasteleria, a retail bakery chain in Central Mexico Retailer Forever 21 has implemented the M2SYS PC-based RightPunch biometric time clock solution to improve employee productivity 21

22 Five forces analysis Five forces analysis Bargaining power of suppliers Low The market is characterized by the presence of a large number of suppliers, enabling vendors to easily switch from one supplier to another. Threat of substitutes Moderate There are no direct substitutes for biometric technologies. However, less accurate and inexpensive non-biometric technologies present competition. Threat of rivalry High The market is highly fragmented with the presence of many vendors providing similar products and solutions, which has resulted in high rivalry among the vendors. Bargaining power of buyers Moderate Many vendors are offering similar solutions, providing buyers with a bargaining advantage over vendors. Threat of new entrants Moderate As the market is forecast to grow, new players are expected to enter. However, the market has the presence of prominent and established vendors, leading to a moderate threat of rivalry. Source: Technavio,

23 Global biometrics market in retail sector by technology Global biometrics market in retail sector by technology PART 07: Market segmentation by technology 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Others 13.50% 17.12% 17.38% 17.79% 18.10% 18.73% Vein recognition 11.39% 11.55% 12.18% 12.59% 12.75% 12.84% Hand geometry recognition 17.14% 16.62% 16.58% 16.37% 16.15% 15.91% Facial recognition 19.86% 20.03% 20.79% 21.29% 21.82% 22.15% Fingerprint identification 38.11% 34.68% 33.07% 31.96% 31.18% 30.37% Source: Technavio, 2015 With a 38.11% share, fingerprint identification technology in the retail sector accounted for the largest share of the global biometrics market in One of the major reasons for the high revenue generation is that fingerprint technology is the oldest biometric technique used in almost all retail organizations worldwide for time and attendance monitoring, inventory management, and access control to databases. In addition, its accuracy rate is high, which is the basis for its growth. Further, fingerprint readers are priced much lower than other biometric readers. This is one of the reasons they were so popular in the earlier stages of its introduction in the retail sector. Facial recognition technology accounted for a market share of 19.86% in Facial recognition is one of the most user-friendly biometric technologies and it provides a high level of accuracy. The adoption of facial recognition technology for monitoring, access control, and security purposes, with the introduction of 3D facial recognition, is expected to be high in the retail sector. Most organizations in the retail sector have already adopted 2D recognition technology because of its operational ease and low installation costs. However, 3D recognition technology overcomes the disadvantages of 2D recognition through its use of complex algorithms, improved 3D imaging devices, and high-level security. 23

24 Hand geometry recognition technology accounted for 17.14% of the global biometrics market in the retail sector in The technology has gained wide acceptance in the retail sector primarily for controlling physical access and monitoring time and attendance to avoid buddy punching. Ease of use, low cost, and user-friendliness are the key factors that have led to the adoption of the technology in the retail sector. However, the market share of this technology is likely to decline by the end of 2020, as manufacturers are providing inexpensive components, such as low-quality scanners and readers for hand geometry devices. This could lead to unauthorized people gaining access to sensitive personal information, thereby leading to end-users losing faith in the efficacy of these solutions. Vein recognition technology accounted for 11.39% of the global biometrics market in the retail sector in It includes both palm and finger vein recognition technologies. Vein recognition biometrics offers highly reliable and contactless biometric authentication to the retail sector as it is extremely difficult to forge and breach. Palm vein recognition biometrics deployment is gaining momentum because it offers extremely high standards of accuracy with a false rejection rate (FRR) of 0.01% and a false acceptance rate (FAR) of less than %. Similarly, finger vein technology has an extremely low FAR and FRR compared with other biometric technologies. The other segment accounted for 13.50% of the global biometrics market in the retail sector. This segment includes iris recognition, voice recognition, vein recognition, and retina recognition. 24

25 Global fingerprint identification market in retail sector Market size and forecast The global fingerprint identification market in the retail sector was valued at $238 million in 2015 and is likely to reach $498.2 million by 2020, growing at a CAGR of 15.92%. Global fingerprint identification market in retail sector ($ millions) % % 18.30% 16.25% 15.70% 15.05% 14.32% 20% 15% % % 0% Revenue Growth rate Source: Technavio, 2015 Market analysis In 2015, fingerprint technology was widely adopted in the retail sector for employee authentication, PC login, and tracking employee working hours because of the low cost of hardware systems and fingerprint readers. Further, increasing adoption of mobile and hand-held biometrics in the retail sector has increased the adoption of fingerprint technology. The adoption of fingerprint identification biometrics in the retail sector is expected to decline because fingerprints can be recreated. For instance, the largest European hacker association, the Chaos Computer Club, was able to reconstruct the accurate thumb impression of an individual by using VeriFinger. 25

26 Global facial recognition market in retail sector Market size and forecast The global facial recognition market in the retail sector was valued at $124 million in 2015 and is likely to reach $363.3 million by 2020, growing at a CAGR of 23.98%. Global facial recognition market in retail sector ($ millions) % 31.13% 40% 35% % 30% % 20.88% 19.14% 25% 20% % % % 0% Revenue Growth rate Source: Technavio, 2015 Market analysis Facial biometrics is increasingly being adopted in organizations in the retail sector for access control, employee identification, and to address growing data theft. The integration of facial recognition technology and analytics into the surveillance infrastructure is driving the growth of the market. It is used in the retail sector for mass surveillance and to identify employee's activities in the infrastructure. The adoption of facial recognition is increasing in mobile devices and PC authentication, as well. For instance, some Samsung smartphones and Apple iphones are now embedded with facial recognition technology. In addition, vendors are offering facial recognition-based attendance monitoring solutions to the retail sector, which help keep track of employees and record their working hours. 26

27 The adoption of facial recognition biometrics in the retail sector is expected to decline during the forecast period because changes in face positioning, hairstyles, facial hair, glasses, and other accessories increases the time taken to verify the identity of an individual, thereby hindering its adoption in the retail sector. Global hand geometry recognition market in retail sector Market size and forecast The global hand geometry recognition market in the retail sector was valued at $107.1 million in 2015 and is likely to reach $261 million by 2020, growing at a CAGR of 19.51%. Global hand geometry recognition market in retail sector ($ millions) % 26.07% 30% % 25% % 16.36% 15.62% 20% % % % 0% Revenue Growth rate Source: Technavio,

28 Market analysis Hand geometry recognition technology is preferred in the retail sector, as every individual has a unique hand geometry, which is extremely difficult to fabricate. In addition, hand geometry recognition is fast, non-intrusive, and accurate across a wide range of lighting conditions and skin colors. Hand geometry biometrics is being used in organizations in the retail sector to monitor the time and attendance of its employees as the size of the hand scan is very small compared with the scan of other biometric technologies. Yet, the hand geometry biometrics market is likely to experience a decline YoY during the forecast period, as the accuracy of hand geometry recognition can be affected by the use of jewelry or medical conditions, such as arthritis. What's more, the technology is not suitable for children because their hand geometry changes quickly with age. Global vein recognition market in retail sector Market size and forecast The global vein recognition market in the retail sector was valued at $71.1 million in 2015 and is likely to reach $210.6 million by 2020, growing at a CAGR of 24.24%. Global vein recognition market in retail sector ($ millions) % 31.85% 28.54% 23.74% 19.44% 18.19% % 35% 30% 25% 20% 15% 10% 5% 0% Revenue Growth rate Source: Technavio,

29 Market analysis Vein recognition technology is being used in the retail sector as it is user-friendly and ensures a low FRR. Vein readers and sensors are technologically advanced compared with fingerprint and palm print recognition and ensure higher accuracy. Yet, the vein biometrics market in the retail sector is likely to experience a YoY decline during the forecast period, as vein biometrics are more expensive than many other biometric technologies. This acts as a deterrent for SMEs in the retail sector in rural and less-developed countries. 29

30 Segmentation of global biometric market in retail sector by geography The global biometrics market in the retail sector is segmented based on geography into the following regions: North America, Europe, APAC, Latin America, and MEA. Segmentation of global biometrics market in retail sector by geography PART 08: Geographical segmentation 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Latin America MEA APAC Europe North America Source: Technavio, 2015 In 2015, North America accounted for the largest market share of 47.82%. It is followed by Europe with 29.03%, APAC with 12.05%, MEA with 6.83%, and Latin America with 4.29%. However, the market share of North America is expected to decline as it is an early adopter of biometrics monitoring and access control systems in the retail sector. The market share of APAC is estimated to increase during the forecast period because of the increasing initiatives of organizations in the retail sectors in India and China to implement biometric time and attendance systems to mitigate time fraud and employee attendance issues. The market share of Europe is expected to decrease due to the shift of organizations toward other biometric technologies, such as iris biometrics and voice biometrics. Countries in Latin America and MEA have low awareness of biometrics monitoring and access control systems in the retail sector, which has led to slow growth in their market share. 30

31 Segmentation of global biometrics market in retail sector by geography (revenue) North America Segmentation of global biometrics market in retail sector by geography ($ millions) Latin America MEA APAC Europe North America Source: Technavio, 2015 The market in the North America was valued at $ million in 2015 and is expected to reach $736 million by 2020, growing at a CAGR of 19.77%. Some of the major factors contributing to the market growth in North America include the following: Presence of many global restaurant chains and supermarkets Increased acceptance of biometrics in the retail sector for time and attendance monitoring; payroll management; inventory management; and access to organizations' PCs, networks, and servers Increased awareness among organizations in the retail sector of the benefits of the deployment of biometrics Wider adoption of cloud-based time and attendance biometric solutions among the retail sector in the US and Canada Europe The market in Europe was valued at $181.3 million in 2015 and is expected to reach $442.1 billion by 2020, growing at a CAGR of 19.51%. Some of the major factors contributing to the market growth in Europe include the following: 31

32 Increased demand for biometrics in the retail sector from the UK and the Nordic countries to improve employee productivity and improve work efficiency Demand for biometrics in the retail sector is expected to be higher in Nordic countries compared with the UK because of improving economic conditions and increased need for organizations to replace outdated traditional security systems The retail sector is the main segment adopting biometrics solutions in Europe to manage employees credentials for time and attendance and to provide secure and authorized authentication to supermarkets and restaurant chains APAC The market in APAC was valued at $75 million in 2015 and is expected to reach $268 million by 2020, growing at a CAGR of 28.93%. APAC is expected to lead the high adoption of biometrics in the retail sector during the forecast period given the increase in adoption of facial, vein, and iris biometric technologies. In addition, the retail sectors in India and China are using fingerprint biometrics for various purposes, such as monitoring the attendance of employees, labor scheduling, and eliminating issues of the exchange of ID cards. Also, the emergence of retail chains in India will drive the market for better security systems for workforce management. The retail sector has been slow to adopt biometric systems because of lack of awareness of integrating biometric technologies with existing systems, such as POS, and also their use for monitoring time and attendance. This developing sector is expected to adopt biometrics to keep a check on its everincreasing workforce and to avoid instances of buddy punching. Japan and South Korea are the major revenue contributing countries in APAC. Other countries, such as Australia, the Philippines, Sri Lanka, Bangladesh, Thailand, and Malaysia, are expected to adopt biometrics in wearables in the retail sector. Latin America The market in Latin America was valued at $26.8 million in 2015 and is expected to reach $74.6 million by 2020, growing at a CAGR of 22.77%. Biometrics in the retail sector is gaining prominence in Brazil, Mexico, and Argentina for time and attendance, authentication, employee identification, and surveillance applications. Rising security concerns, including inventory theft, payroll fraud, and time theft, have raised demand for biometrics in the retail sector in Latin America. 32

33 MEA The market in MEA was valued at $42.7 million in 2015 and is expected to reach $119.6 million by 2020, growing at a CAGR of 22.89%. Countries such as Saudi Arabia, UAE, and Turkey are giving prominence to the adoption of biometrics in the retail sector for verifying the identity of employees for greater security in the region. There has been a massive influx of foreign workers to MEA, which has made it necessary for organizations in the retail sector to know the identity of employees coming into the country. For instance, The Trade and Investment Framework Agreement in 2004 strengthens the trade relations between the US and UAE. More than 1,000 US-based companies have offices in UAE and nearly 55,000 US citizens are residing in UAE. This has led to increased demand for biometrics in the retail sector for the accurate identification and authentication of employees. 33

34 Emergence of contactless biometrics PART 09: Market developments Physical contact is necessary for fingerprint biometrics, requiring an employee to place a finger on the sensor. Concerns related to hygiene are increasing among individuals because of increased instances of communicable diseases, such as Ebola and swine flu. Therefore, organizations are reluctant to adopt contact biometric solutions. Biometric technology vendors and biometric scanner manufacturers are focusing on the development of contactless fingerprint scanners. Also, this awareness is creating a growth opportunity for contactless biometrics, such as technologically advanced iris cameras. For instance, the contactless and technologically advanced vein readers and scanners available in the market solve the issue of hygiene problems and are appropriate for organizations where hygiene cannot be compromised. Contactless biometrics will be a burgeoning trend in the retail sector in the next one to two years. Integration of facial recognition in surveillance systems The rise in infrastructure development in several regions across the globe has resulted in the growth of surveillance systems. Further, this has increased the integration of facial recognition technology and analytics with surveillance infrastructure in both public and private places for the purpose of security monitoring and access control. The integration of facial recognition in surveillance systems helps to minimize waiting time for identification and reduces operational costs. Some examples of this are listed below: Cognitec developed FaceVACS-VideoScan, a C5 video camera inbuilt with face detection and tracking technology Gadspot developed IntelliScan 750 TVL, a high-resolution camera inbuilt with human facial recognition capabilities Argus Global, a provider of biometric technology, has collaborated with Box Technologies, an innovative retailer, to launch facial recognition applications for the retail sector The adoption of this advanced security system is likely to gain traction in supermarkets and restaurant chains in North America and Europe. NFC-based payments Apple is partnering with various retailers and financial institutions to introduce NFCpowered mobile payments. Mobile devices, such as smartphones, laptops, and tablets, can be used for physical and logical access control in organizations. With the inclusion of NFC technology in smartphones provided by biometrics vendors, an individuals' credentials stored on the smartphone can be presented to the reader by employees. 34

35 These smartphones with NFC technology are equipped with an industry-standard short-range wireless link that enables them to exchange individuals' data for access control. Smartphones can be upgraded with NFC technology by using NFC-enabled add-on devices, such as a microsd card, which enables end-users to perform various processes, including identity verification and payment at brick-and-mortar retail stores. Mobile access control credentials can be shared two ways: Either by connecting the mobile device via Wi-Fi or Bluetooth, or the access control data can be shared in the form of digital credentials over the air via a mobile network. A number of retail stores, such as Walgreen, are using NFC-based payment to enhance the usage of contactless payments. Since a number of mobile applications are being used as a result of the increase in the usage of mobile devices, an image of a finger can be captured with the camera of the mobile device and can be used to secure these mobile devices and applications from hackers and viruses while providing access to authenticated users. NFC-enabled smartphones contain a secure element called subscriber identity module (SIM), which is either a tamper-proof circuit or a plug-in module that ensures the validity of all transactions inside the access control managed network. This technology is being used for cashless vending and to gain access to secure premises. The benefits of this model are as follows: Eliminates credential copying Easily issues temporary credentials Easily cancels credentials if a device is stolen or lost Modifies security parameters whenever required 35

36 Incorporation of biometrics workforce management systems at retail stores PART 10: Market trends and opportunities Retail stores are increasingly turning to the implementation of biometrics workforce management systems to provide access to authorized workers and deny entry to unauthorized workers The workforce is a major expense for any organization, and in the retail sector it is imperative that the workforce is managed effectively. The theft of products along with other valuable items from retail stores has become common worldwide. This has raised the need for biometrics identification and monitoring systems at retail stores, which help to identify theft suspects. Biometric time and attendance systems have been implemented at a number of retail stores for monitoring employees when they arrive at work and when they leave at the end of the day. Biometrics-based time and attendance monitoring ensures that only authorized individuals can gain access to the premises, increasing the security and safety of the business and its employees. Some examples of this are as follows: KFC restaurant franchisees in the Southeast and Midwest US have implemented fingerprint readers in their restaurants to keep a record of employees' attendance Food manufacturer, UFO Foods, has implemented a biometric workforce management system, which includes three palm scanners that record reliable time and attendance information Carrefour, a supermarket chain in Turkey, has implemented fingerprint recognition terminals, provided by Suprema, to track employee attendance Labor is also the largest expenditure for the retail sector. The implementation of biometrics systems at retail stores enables the monitoring of the real-time performance of employees and an assessment of productivity. The use of biometrics monitoring and access control systems makes it impossible for any employee to pretend to be another employee and clock in on their behalf, thus eliminating fraudulent activity and unauthorized entries into retail stores. Multimodal biometrics for time and attendance Multimodal biometrics include the combination of two or more biometric technologies to identify and verify individuals. In certain situations, one form of biometric identification does not provide an accurate and exact match of the identity of an individual. Multimodal biometrics provides more accuracy because it identifies an individual through the use of two or more biometric technologies, such as fingerprint and finger vein patterns and a combination of fingerprint, iris, and voice pattern for secure authentication. These biometric systems are more accurate, reliable, and secure, and are capable of avoiding fraudulent attacks. Therefore, these systems are more likely to be accepted for time and attendance monitoring due to their reliance on multiple 36

37 biometric technologies for identification rather than on a single biometric characteristic. Some vendors in this market are developing multimodal biometrics for time and attendance monitoring; these are inbuilt with both fingerprint and finger vein identification technology in a single device, which is very cost-effective because it saves the cost of buying two individual biometric devices. There are a number of factors influencing the usage of multimodal biometrics, including the following: Accuracy and reliable recognition: Multimodal biometric systems provide a high level of accuracy to end-users in their verification as well as identification modes. For instance, if two individuals walk in a similar manner, the chances of an error in the identification of the individual are high. In such cases, multimodal biometric systems are used, which increases the reliability and accuracy of the biometric technology A fortified level of security: Multimodal biometric systems provide multiple levels of security. For instance, a highly secured premises can use up to three biometric technologies. In the case of the failure of any one of the biometric technologies, the end-user can still be identified and verified and gain access into the secure premises Vulnerability: With the use of biometrics systems, there is a threat of the system being fooled. However, with the usage of a multimodal biometric system, the vulnerability of the biometric system is reduced to a great extent User acceptance: Since multimodal biometric systems provide a high level of security, they are being widely accepted and deployed in many countries Cloud-based biometrics for time and attendance Cloud-based biometric technology utilizes cloud services through a web-based user interface, which is either a browser or a mobile application. Here, the biometric infrastructure of a business is handled by the hosting provider and is available on demand. Biometric infrastructure in the cloud includes servers that consist of biometric template databases and all the processing data created during the individual's identification and verification. Organizations can install biometric devices and set up accounts with the hosting provider to select the services they need. Cloud-based biometrics are affordable for small and mid-size organizations in the retail sector because the pricing of cloud biometrics is based on a pay-per-use model, where customers pay according to the utilization of services as opposed to traditional security systems that require a one-time large capital investment and ongoing operational costs. Organizations worldwide are looking for money-saving biometric time and attendance solutions to keep track of 37

38 employees' attendance. The attendance information can also be used for payroll and absence management. This trend is driven by mobile biometric technology because pairing mobile biometrics with cloud-based biometrics speeds up the identification process and sends the resulting data to the cloud instead of saving it in a local file that can be accessed by anyone. Introduction of biometrics in wearables Many wearable devices, such as smart watches, bands, ear-pods, and eyeglasses, are being launched with biometric identification capabilities, which have the potential to identify an individual's biometric traits, such as heart rate and blood pressure. Wearable biometric identification devices are expected to gain traction in the next two to three years in major industry verticals, such as retail, government across law enforcement agencies, health and medicine, fitness, education, transportation, and banking and finance. A number of wearable biometric devices that increase productivity and accountability in workforce management are emerging in the retail sector. Organizations are set to use wearable devices for various purposes of employee identification, such as access control, time and attendance recording, and to provide employees with access to sensitive information. This technology is currently gaining prominence in the retail sector, where employees are using smart wristbands that provide information regarding their location on the work floor. When an employee enters the organization, the wrist band automatically punches them in for the day and then directs them to their assigned work. Such devices are also used by employers to evaluate employee performance and also help employers identify employees who take excessive and unwanted breaks during work time. Wearable biometric identification devices with different biometric authentication capabilities are available in the market for various purposes. Some are listed below: Samsung, in partnership with the financial transaction service PayPal, is making an effort to bring mobile payment functions to its third-generation smart watches by using a fingerprint biometric identification sensor. This will enable customers to quickly sign in to PayPal and make secure mobile payments. The retail sector is expected to have the highest adoption of smart watches with mobile payment functions to enable secure mobile payments Apple has launched its new Apple Watch with smart watch biometric capabilities. This watch supports Apple Pay and has the ability to make mobile payments. The retail sector is expected to adopt wearable devices for secure identification, convenient transactions, access control, and authentication. 38

39 Wearable biometric devices enable end-users to pay quickly for POS and online goods and services. Payment services, such as PayPal, AliPay, and Apple Pay, have planned to move from smart mobile devices to wearable devices to offer convenient and biometrically authenticated payments. The retail sector is expected to be the highest adopter of wearable devices for secure identification, convenient transactions, access control, and authentication. 39

40 Security concerns Despite of the fact that fingerprint recognition biometrics is considered to be one of the most secure biometric technologies for gaining access into secure premises, it is affected by a number of different attacks, including the following: PART 11: Market inhibitors Direct attacks: In this process, the hacker presents fake fingerprint images of authorized personnel to gain access to confidential data Spoofing: It is easy for a hacker to present himself as an authenticated individual to gain access to financial transactions Replay risks: Hackers may record the fingerprint image of an authenticated individual and use it later for further transactions Enrollment risks: There may be dust on the finger or device during the enrollment process, which can weaken the authentication process Brute force attack: A fingerprint scanner may be affected if a hacker uses force Reverse engineering: This is a process where the hacker can use a fake fingerprint of authorized personnel for reverse engineering processes High cost of deployment restricts adoption High cost is the major inhibitor in the adoption of biometric technologies. Alternative security solutions, such as swipe cards, access cards, tokens, and keypads, are relatively cheaper than biometric systems. Therefore, these traditional security solutions are popular with SMEs in developing and under-developed countries. Installation and maintenance of some biometric systems on a small scale is inexpensive, whereas the lifetime cost of other sophisticated systems used in largescale operations are costly and can be unaffordable. Costs for such large-scale systems include not only the initial capital expenditure (CAPEX) for the hardware and software, but also the cost of issuing identity documents, training and employing staff, maintaining equipment, and managing databases. In addition, the adoption of biometric technologies involves the hidden costs associated with the implementation of middleware, application software, and system integration. Vulnerability of biometric systems There may be instances of biometric systems being compromised by design or by accident, which makes biometric systems vulnerable to damage or attack at the level of the device or associated equipment, at the user interface, and at the level of the system. Biometric devices are vulnerable to deception, physical attack, and damage to cables and wires. At the level of the system, algorithms and templates are susceptible to hackers; data is vulnerable to alteration, deletion, or theft at the administrator or 40

41 account level; and software components are vulnerable to attack. Employing multimodal biometric systems is a method of dealing with some of the accuracy and vulnerability limitations. Lack of standardization of biometrics Without standardization, companies will not be able to produce standard biometric devices. Lack of standardization is seen as a barrier to interoperability, mainly when technologies from multiple vendors have to be integrated. There is a need for security standards for service enrollment, usage, transmission and storage of biometric traits, and all devices that participate in a biometric authentication process. Standardization bodies, such as the International Organization for Standardization (ISO), the National Institute of Standards and Technology (NIST), and the British Standards Institution (BSI), are regularly releasing biometrics standards, but unanimous standards are yet to be recognized in the industry. High dependence on a non-standard technology is hindering the growth of the market. 41

42 Vendors matrix Vendors Crossmatch Technologies Honeywell Security M2SYS Technology NEC Safran Suprema Products and solutions Eikon USB fingerprint readers U.are.U 4500 fingerprint reader HandKey CR HandKey CR HG-4 RightPunch RightPOS NeoFace Reveal NeoFace Watch MorphoSmar t 1300 series MorphoSmar t 300 Series BioStation BioMini Slim PART 12: Vendor dynamics U.are.U 5160 fingerprint reader HandKey CR HG4-PROX NeoFace Smart ID BioTouch (BTO) 500 BioMini Combo U.are.U 5100 fingerprint reader HandKey CR HG4ICLASS NeoFace Match Digital fingerprint reader (DFR) 2300 BioMini Plus U.ARE.U fingerprint keyboard HandKey II HG4-II MorphoTop BioMini Verifier 300 LC 2.0 MorphoWav e SFU-S20 Verifier 310 LC MorphoSmar t Finger VP Desktop series SFU-500 Verifier 320 LC SFU-300 TCET Touchchip module SFM 5500 series TCESC4K Touchchip swipe module SFM 5000 series U.are.U 4500 module SFM 4000 series U.are.U 5300 module SFM 3000 U.are.U 5200 module U.are.U 5100 module 42

43 Vendors Crossmatch Technologies Honeywell Security M2SYS Technology NEC Safran Suprema TCS1 large touch sensor TCS2 medium touch sensor TCS4K swipe sensor TCS4K chipset TCS4H swipe sensor Digitalpersona altus Features Anti-spoofing Yes Yes Yes Yes Yes Yes Works well with dry, moist, and rough fingerprints Yes Yes Yes Special undercoating Yes Excellent image quality Yes Yes Yes Yes Yes Yes Compact size and low power consumption Yes Yes Yes Yes Yes High durability Yes Yes Yes Yes Yes Yes Stores up to 100 templates Yes Lightweight Yes Yes Yes Yes Fast identification Yes Yes Yes Yes Yes Yes Multimodal biometric features Yes Yes Touchless Yes 43

44 Vendors Crossmatch Technologies Honeywell Security M2SYS Technology NEC Safran Suprema Technologies Fingerprint recognition Yes Yes Yes Yes Facial recognition Yes Iris recognition Yes Vein recognition Yes Hand geometry recognition Yes Description of major vendors Crossmatch Technologies This vendor provides a wide range of biometric products and solutions for the retail sector. Authentication-verification hardware Under this category, the vendor offers a complete portfolio ranging from fingerprint readers to original equipment manufacturer (OEM) modules and embedded sensors, including the following: Hardware-readers Eikon USB Biometric readers: It includes fingerprint readers that provide quick and reliable biometric authentication and works with Crossmatch software U.ARE.U 4500 fingerprint reader: It is an ideal fingerprint reader based on optical fingerprint scanning technology for high-quality images, and it has the ability to recognize even the most difficult fingerprints U.ARE.U 5160 fingerprint reader: It is an optical fingerprint sensor designed to work with the U.are.U family of software development kits (SDK), and it can work in harsh environments U.ARE.U 5100 fingerprint reader: It is an optical fingerprint sensor that provides the highest combination of durability and ease of use. This reader is IP64 rated and sealed against dust and liquids 44

45 U.ARE.U fingerprint keyboard: It is a Windows compatible 104-keyboard with a built-in U.are.U 4500 fingerprint reader. This can be used with Crossmatch software, including DigitalPersona Pro Enterprise and U.are.U SDKs EF200: It is an unique optical two fingerprint capture device that provides both flat and rolled print capture capabilities Verifier 300 LC 2.0: It is a single fingerprint capture device that delivers accurate and reliable results for identification and verification. It is compact in size and can be easily integrated into existing business applications Verifier 310 LC: It is a forensic quality two fingerprint capture device. Compared with a single finger-scan, a Verifier 310 LC provides enhanced accuracy for identification and verification Verifier 320 LC: It is a dual fingerprint capture device that delivers fast, accurate, and reliable results for identification, verification, and enrollment Hardware-modules TCET Touchchip modules: These sensors are immune to sunlight and are ideal for outdoor use, such as Mobile ID, logical access, and physical access. They are less than 0.2 inch thick, power-efficient, and deliver accurate biometric results. These sensors are compatible with minutiae interoperability exchange (MIXEX) and automated fingerprint identification system (AFIS) algorithms TCESC4K Touchchip swipe module: This swipe module is compact, cost-effective, and easy to integrate. It can store around 100 user templates and supports universal serial bus (USB), serial peripheral interface (SPI), and universal asynchronous receiver/transmitter (UART) interfaces U.ARE.U 4500 module: This is a small fingerprint reader that can be integrated into OEM equipment and with Crossmatch U.are.U developer SDKs U.ARE.U 5300 module: It is personal identity verification (PIV) certified and is highly resistant to chemical and physical damage U.ARE.U 5200 module: It is an optical fingerprint module and can be used with a full range of Crossmatch s U.are.U SDKs U.ARE.U 5100 module: It is an optical fingerprint sensor, PIV certified, and can be integrated into OEM equipment Hardware-sensors TCS1 large touch sensor: These are fingerprint sensors designed for applications, such as logical and physical access control, Mobile ID devices, and other government and enterprise security applications 45

46 TCS2 medium touch sensor: These are fingerprint sensors that can be integrated into a wide variety of logical and physical access control devices, where the convenience of touch is preferred and budget is a factor TCS4K swipe sensor: It is an enterprise-friendly solution for PC makers, and it also supports additional security features, including image data signing, encryption, and anti-spoofing TCS4K chipset: It is an all-in-one enterprise-friendly solution and is capable of performing all the necessary biometric functions to match a finger that is swiped against a pre-enrolled fingerprint template Authentication-verification software Digitalpersona altus: It is a secure multi-factor authentication solution that allows easy integration with existing IT infrastructure, keeping the total cost of ownership (TCO) low Honeywell Security This vendor provides the HandKey reader, which utilizes hand geometry technology to verify the end-user's identity in a fraction of a second. Further, dirt, abrasions, and cuts on the end-user's hand have no effect on the matching process. HandKey CR: This is designed to work in conjunction with card-based access control systems. It can also be integrated with OmniClass/iClass readers to protect cardholder privacy and eliminate the need to store cardholder database in individual HandKey CR readers HandKey CR HG-4: This is designed to work in conjunction with card-based access control systems; it stores 512 user templates HandKey CR HG4-PROX: This is designed to work in conjunction with card-based access control systems that store 512 user templates and read HID Prox cards HandKey CR HG4ICLASS: This is designed to work in conjunction with card-based access control systems that store user templates on OmniClass/iClass cards HandKey II HG4-II: This verifies a user without the need for cards to access secure premises. Thus, it helps in reducing the administrative costs of an organization M2SYS Technology The company's biometric product portfolio for retail sector includes the following: Right POS: It is a biometric POS solution that quickly identifies employees and logs them into the POS software. It supports fingerprint, finger vein, palm vein, and iris biometrics modalities Right Punch: It is a PC-based biometric solution used for employee identification in place of ID cards and PINs 46

47 NEC The vendor provides a wide range of biometric products and solutions to the retail sector, including the following: NeoFace Reveal: This solution is available as a standalone solution or integrated with the NEC biometrics identification system NeoFace Watch: This solution can be integrated with existing surveillance systems to extract faces in real time from video surveillance systems and match against a biometric database NeoFace Smart ID: This solution is a smart phone and tablet-based solution that enables the identification of individuals through fingerprint, voice, face, demographic, and other source data NeoFace Match: This solution is available as an appliance to third-party system integrators for integration in facial recognition solutions Safran In December 2012, the company acquired Morpho, a France-based technology provider. The company s biometric product portfolio for the retail sector includes the following: MorphoSmart 1300 series: It is a compact biometric USB device with optical technology and fingerprint algorithms used for enrollment, identity verification, and user identification MorphoSmart 300 Series: It is a high-end optical sensor that is capable of producing high-quality single fingerprint images BioTouch (BTO) 500: It is a standalone plug-and-play peripheral fingerprint reader used for secure access to network and desktop applications Digital fingerprint reader (DFR) 2300: It is designed for one or two-finger slaps and one-finger rolls, which offer superior image acquisition with ease of use, and it is ideal for all types of large-scale fingerprint programs MorphoTop: It is designed to capture four fingers simultaneously for enrollment and verification purposes and it also performs fake finger detection MorphoWave: It is a biometric access solution that captures and matches four fingerprints within a single hand and acquires extremely accurate fingerprint data MorphoSmart Finger VP Desktop series: It is a multimodal device capable of capturing and processing finger vein and fingerprint biometric data at the same time 47

48 Suprema It offers a range of biometric solutions to the retail sector, including the following: BioStation: This device can match and authenticate up to 20,000 fingerprints per second and can manage up to 1,000,000 fingerprint templates BioMini Slim: This device has ingress protection (IP65) grade dust and waterproof features and provides advanced live finger detection technology to analyze image patterns based on optical characteristics BioMini Combo: It is a two factor authentication security solution with slim optical sensor and live finger detection technology BioMini Plus: It is an FBI PIV certified high-level security solution with hybrid live finger detection technology and a durable 500dpi optical sensor BioMini: It is a high performance fingerprint scanner that is supported by Suprema s SDK. The sensor is IP65 protected against dust and water to ensure high performance BioLite Net: It is a compact IP fingerprint terminal and is suitable for both outdoor and indoor use. It provides fast and accurate verification while providing an exceptionally low error rate SFU-S20: This can capture a fingerprint regardless of external light and fingerprint conditions. It offers superior hardware and software capabilities that serve as an ideal platform for developers SFU-500: This is a high-level security solution that features hybrid live detection technology, an optical sensor, and a high-speed USB 2.0 interface SFU-300: This is an authentication scanner supported by SDK; it incorporates a high-quality optical sensor that can acquire fingerprints at a resolution of 500dpi SFM 5500 series: It is a standalone fingerprint module equipped with an optical sensor, and it is used for access control applications SFM 5000 series: It is a UniFinger module equipped with a fingerprint authentication algorithm that protects the fingerprint system from attack and fake fingerprints SFM 4000 series: It is a compact and power-efficient fingerprint module and an ideal solution for lock and safe manufacturers that look for reliable biometric solutions with extra low power consumption SFM 3000: It is a cost-effective fingerprint identification module equipped with fingerprint identification and template storage 48

49 Vendor news updates Key news Vendor Date News NEC August 2015 Launches a new version of NeoFace, a facial recognition algorithm Suprema April 2015 Launches BioStation 2, a new fingerprint terminal in biometric access control and time and attendance Suprema February 2015 Caribou Coffee chains in UAE implement the company's BioLite Net, a biometric time and attendance solution Safran August 2014 Launches MorphoWave, a contactless four finger scanner that simultaneously scans the four fingerprints of a hand M2SYS Technology July 2014 Retailer Forever 21 implements the company's PC-based RightPunch biometric time clock solution to improve employee productivity Safran February 2014 Launches MorphoTablet, a touchscreen device that enables secure mobile operations using fingerprint and facial recognition biometrics 49

50 Mergers and acquisitions Company Acquired Deal Year Crossmatch Technologies Digital Persona Not available 2014 NEC CSG Technology Solution $227.5 million 2012 Safran Morpho Not available

51 Other prominent vendors Company Allegion Description Provider of hand geometry biometrics Ayonix Provider of biometrics for access control systems, surveillance systems, and computer security BIO-key Provider of fingerprint biometric identification and verification solutions Biometric Time Clock Systems Provider of biometric time and attendance software and solutions Cognitec Systems Provider of biometric identification solutions essl Security Provider of biometric identification solutions eportid Provider of biometric identity verification solutions FingerCheck Provider of fingerprint biometric time and attendance software FUJITSU Provider of palm vein technology for access control and time and attendance Herta Security Provider of facial recognition technology TimeLabs Provider of biometric and access control devices Trac-Tech Provider of fingerprint identification for time and attendance Tyco Provider of hand geometry biometrics 51

52 Crossmatch Crossmatch Technologies Business overview Crossmatch provides hardware and software solutions for biometric identity management. It serves financial institutions, retail organizations, private enterprises, governments, law enforcement agencies, and defense departments. PART 13: Key vendor analysis Crossmatch was founded in 1996, is headquartered in Florida, US, and has offices worldwide. The company has more than 300 employees and serves customers in more than 80 countries worldwide. Products and solutions Crossmatch: Products and solutions Authentication and verification Enrollment and livescan Mobile SDKs Source: Technavio, 2015 Products/solutions Description Authentication and verification Hardware solutions include a range of fingerprint readers; fingerprint keyboards; single and dual fingerprint capture devices; as well as hardware modules, such as the TouchChip TCET modules (ideal for Mobile ID and logical and physical access), the TCESC4K module (to add fingerprint biometrics to embedded devices), and the U.are.U 4500 Fingerprint Module (a fingerprint reader designed for integration into OEM equipment) Software solutions include the DigitalPersona Altus, which provides identity assurance through a strong 52

53 Products/solutions Description multi-factor authentication process and the T24 Biometrics Module, ideal for banking applications Enrollment and livescan Offers a range of hardware and software solutions for identity management. Hardware solutions include finger print (for wet and dry finger), palm, and iris scanners Software solutions include web-based solutions for the collection and management of biometric enrollment data, biometric database and matching modules, and server applications for processing applicant and criminal fingerprint submissions from multiple sources Mobile Offers software applications with multimodal capture capabilities for fingerprint, iris, and facial images and the management of applicant enrollment Hardware solutions include mobile kits for capturing and transmitting forensic data, high-performance biometric enrollment, and credential reading solutions Crossmatch also offers developers, system integrators, and end-users a portfolio of SDKs to develop identity management solutions. These support multiple platforms and language interfaces and are compatible with existing image, data, and compression standards. Services The company provides services, such as the development of custom software, project management, implementation and integration, testing, training, and customer support. It also offers professional services, including biometrics consulting, program management, and system integration. Crossmatch in automatic identification sector The company serves the automatic identification sector by offering the following products: Guardian 300 Suited for border control, national ID, employee background checks, and other highvolume fingerprint capture applications. 53

54 Guardian 200 Suited for wet and dry fingerprint image capture for attended and semi-attended applications where high speed and good image quality are required. Guardian Module Designed and built for integration into most advanced biometric identity management kiosks, egates, and workstations. Guardian R2 Suited for compact tenprint biometric identity management solutions optimized for harsh environmental conditions. Patrol ID and Patrol Used to confirm identities of visiting foreign nationals or for national registration programs. I SCAN 2 Transforms any USB-enabled computer system equipped with Crossmatch enrollment software into an integral part of the comprehensive biometric identity management solution. L Scan palm scanner Addresses the needs of compact, high-resolution, rapid capture livescan systems used in criminal identification, forensic analysis, and enrollment. MOBS Facilitates enrollment tasks on hand-held devices. Recent developments Company details Description Key highlights September 15, 2015: Announces that the Verifier Sentry hand-held device has been awarded the Biometric Identification Device of 2015 by Government Security News (GSN) June 23, 2015: Announces an upgrade to its DigitalPersona Altus multi-factor authentication platform 54

55 Company details Description June 18, 2015: Announces that its U.are.U 4500 fingerprint readers have been deployed by Togo s Eateries, a sandwich chain based in the US December 3, 2014: Announces that its DigitalPersona Pro Enterprise software and U.are.U 4500 fingerprint readers have been deployed throughout First Bank branches in North Carolina, South Carolina, and Virginia, US November 12, 2014: Announces that its U.are.U fingerprint readers have been deployed by Montparnasse Pasteleria, a retail bakery chain in Central Mexico November 4, 2014: Launches an expanded portfolio of biometrics-based identity management solutions as a result of its merger with DigitalPersona, a biometrics solution provider based in the US 55

56 Honeywell Security Honeywell Security Business overview Honeywell Security was established in 1929 and is headquartered in New York, US. It manufactures automation and security solutions for residential and commercial applications. The company offers video surveillance products and access control systems in EMEA, APAC, and the US and operates as the subsidiary of Honeywell International. Product segmentation Honeywell Security: Product segmentation Intrusion Video surveillance Access control Integrated security Cable and custom electronics Source: Technavio, 2015 The company offers its products through the following segments: Intrusion This segment offers the following products: Product name Sub-products Control panels Wireless burglary LYNX Burglary Combination fire/burglary Entry management systems Compass windows compatible network downloader 56

57 Product name Sub-products Key pads Graphic touchscreen Wired Voice Wireless Receivers Commercial fire Expansion modules and accessories Garbage door controls ZBRIDGE Expansion Sounders/strobes Life safety Wireless smoke detectors Wireless carbon monoxide detectors V-Plex smoke detectors Kits Burglary Wireless peripherals Energy saver kits Sensors Motion sensors Photoelectric beams Special application sensors Glass break detectors Shock detectors Hold up switches Sounding devices Piezo sounders WAVE indoor sounding devices Sounding devices 57

58 Product name Sub-products Voice drivers, bells, and boxes Strobes Video surveillance This segment offers the following products: Products Sub-products Cameras and domes Analog components Recording devices Other products IP cameras Ball cameras Box cameras Specialty cameras Lenses Indoor mini-domes PTZ domes Twisted pair video Power supplies Surge protectors Data distributor NVR NVR software solutions Multi-site video management systems IP systems, matrix switching systems, and key boards Video analytics solutions and data analytics solutions 58

59 Access control Offers access control solutions, web-based accessed control solutions, visitor management systems, and control panels and hardware. Integrated security Offers security management systems, intelligent controllers, digital video or radar solutions, visitor management systems, readers, credentials, and printers. Cable and custom electronics Offers security, control, irrigation, tracers, lighting, fire alarms, home theater, multimedia cables, network, IP, and outdoor cables. Industries Honeywell Security offers solutions to the airport, banking, finance, gaming, government, healthcare, industrial, life sciences, military, residential, retail, and seaport industries. Honeywell security in automatic identification sector The company serves the automatic identification sector by providing the following products: Security management systems Includes the following products: Pro-Watch Security Management Suite 4.2 Security management suite Pro-Watch 4.1 Service Pack 2 Security management suite Pro-Watch + VISTA Integration Integrated access control solution Pro-Watch Integration Program Software development certification program for integrators Pro-Watch Notifier Secondary Fire Interface Security, building automation, and secondary fire notification Pro-Watch Compliance Report Manager Enhanced Pro-Watch reporting MAXPRO VMS Video management system 59

60 Visitor management systems Includes the following products: LobbyWorks Visitor Management System LobbyWorks visitor management suite, version 4.1 Self Registration Kiosks Intelligent controllers Includes the following products: PW-series modular access control system intelligent controllers PW6101 series single door POE intelligent controller and reader module PW-series access modules Digital video/radar solutions Includes the following products: Digital video manager Digital CCTV surveillance solution Radar video surveillance (RVS) system automated detection, tracking, and video response to security threats Readers Includes the following products: HandKey Hand geometry readers Indala FlexPass proximity readers OmniProx series Proximity card readers OmniClass 2.0 Contactless smart card readers 4200 Series DigiReader Digital proximity readers Conversion solutions Includes the following products: DataLine Coax adapter NexLine Coax to RS-485 adapter NexLine Plus MSM replacement and coax converter NexStar S-Net multiplexer Universal WIU Wiegand interface unit 60

61 Credentials Includes the following products: Indala FlexPass proximity credentials 2Smart Key Contact smart card plus proximity OmniClass Credentials Credentials for contactless smart card readers OmniProx Credentials Credentials for contactless proximity card readers Printers Includes professional ID card printers, such as Magicard printers. Biometric series readers Includes the following products: HON-FIN4000K-20K series: A fingerprint station with LCD, keypad, and 400,000 fingerprint capacity HON-FIN4000K-10K series: An IP-based outdoor fingerprint reader with LCD, keypad, and 10,000 fingerprint capacity HON-FIN K series: An IP-based fingerprint reader with 10,000 fingerprint capacity HON-FIN3000: A fingerprint authentication device, designed with fingerprint recognition, access control management, and efficient time and attendance HandKey reader: A device developed by Recognition Systems that utilizes fieldproven hand geometry technology, which maps and verifies the size and shape of the person s hand, all in less than one second Recent developments Honeywell Security Description Key highlights September 14, 2015: Announces that its Vindicator security platform now integrates with Fiber SenSys s fence-mounted fiber optic sensor system. This integration creates an easy-toinstall solution that keeps critical infrastructure locations safe and secure May 19, 2015: Announces that its Vindicator command, control, and display equipment has 61

62 M2SYS Technology Honeywell Security Description been certified to protect assets at US air force bases across the world May 13, 2015: Releases an updated version of the Honeywell Total Connect 2.0 platform March 30, 2015: Introduces a high-quality analog video surveillance solution that provides high-resolution images on analog infrastructures March 2, 2015: Introduces a hardwired passive infrared motion sensor that reduces false alarms in residential environments October 15, 2014: Introduces Honeywell Total Connect Tracking Services with GPS vehicle and asset tracking M2SYS Technology Business overview M2SYS Technology was founded in 2001 and is headquartered in Atlanta, Georgia, US. The company focuses on fingerprint identity management technology. It delivers a broad range of tailored, completely functional, turn-key fingerprint software solutions for businesses and customers. M2SYS Technology serves customers in more than 100 countries. The company also operates through its office in Dhaka, Bangladesh. M2SYS offers its products through resellers and online. Key solutions M2SYS Technology: Key solutions Government solutions Commericial solutions Cloud and mobile solutions Biometric technology Biometric hardware Source: Technavio,

63 Category Solutions Description AFIS/ABIS It is a scalable and customizable software package for performing various tasks of processing, searching, retrieving, editing, and storing biometric templates and subject records. It also offers multimodal ABIS, which combines fingerprint identification with an iris or facial recognition modality. The company's AFIS fingerprint matching software is an instant biometric solution with server hardware or biometric software Voter ID It offers the TrueVoter AFIS/ABIS voter registration system. It provides biometric voting registration for fairs and elections Government solutions National ID It assures correct citizen identification for a secured national population register by providing a unique number and biometric identity profile Border Control It offers the SecuredPass AFIS/ABIS immigration and border control system. It captures detailed biographic data, biometric template data, and scan documents Single Sign On It offers the Enterprise Biometrics Suite, which is a biometric single sign on solution for relieving the burden of password management, thereby providing a convenient mechanism for users to access their computers or the network epolice It is an integrated platform for addressing law enforcement operational units, including case management, booking systems, 63

64 Category Solutions Description demographic databases, investigations, and next generation ABIS PrisonSecure It manages prisoner identities with a flexible and comprehensive jail and prisoner management system CertisID It is a customizable document management, biometric identity and know-your-customer cloud solution. It caters to the banking and financial services sectors DriverTrack It is a cloud-based driver identity and data management and administration solution. DriverTrack is based on the CloudBar modular software platform Commercial solutions LaborTrack It is a completely customizable and end-toend, cloud-based solution for workforce management in an organization, for identifying employees StudentTrack It is a cloud-based identity management system. It caters to schools, colleges, and universities worldwide Single Sign On It is a biometric Single Sign On solution that relieves the load of password management, thereby providing a more suitable mechanism for users to access their computer/network RightPunch It is a PC-based biometric time clock CloudBar It is a modularized cloud application framework. It provides end-users and 64

65 Category Solutions Description partners with flexibility in deploying a modified, enterprise cloud-based software solution. CloudBar framework enables a strong biometric identity management module Cloud and mobile solutions CloudABIS It is an intuitive and comprehensive solution for various global identity management and subject tracking initiatives. It is an ABIS management architecture used to lower system complexities and capital costs Cloud Matcher It is an advanced biometric matching and de-duplication technology for extensive identity management mcloud It is a revolutionary mobile identity management smart device application for enterprise cloud application deployments Hybrid Biometric Platform It is a multimodal biometrics system for any form of biometrics, including voice, fingerprint, iris, facial, finger vein, palm vein, and DNA recognition Biometric technology Biometric SDK It offers Bio-Plugin Biometric SDK, which is a software development kit for the quick integration of multimodal biometric software High-Speed De- Duplication This product is offered under the Bio- Hyperserver brand. Bio-Hyperserver is a fast biometric identification system that is proficient in matching a minimum of 100 million fingerprints per second in one server 65

66 Category Solutions Description Bio-SnapON Bio-SnapON is a comprehensive biometric software system that is compatible with any Windows or web software deprived of any code-level development. The solution supports fingerprint, palm vein, finger vein, and iris biometrics M2-EasyScan It is a USB fingerprint reader. It offers a range of fingerprint scanners and fingerprint sensor technologies as per industry requirements M2-TenPrint fingerprint Live Scanner It is a device with an advanced optical system that can capture a high-quality image in less than one second M2-TwoPrint dual fingerprint reader It is a durable, robust scanner with a large scanning area designed to rapidly capture high-quality images Biometric hardware M2-AutoTilt iris recognition camera It is an inexpensive, compact device. It delivers high-quality images instantly executed through the M2SYS Hybrid Biometric Platform Cross Match I Scan 2 iris camera It offers rapid mobile enrollment, identification, and verification through iris capture applications to various security installations M2-FingerVein Noninvasive finger vein reader It is a non-invasive, contactless finger vein reader that scans the skin's surface for a perfect read each time M2-PalmVein It is a scanner that uses near-infrared light to form a vein map of the user's palm to 66

67 Category Solutions Description execute highly accurate and secure biometric recognition M2-FuseID It is a smart fingerprint reader. It delivers higher levels of security, reliability, and accuracy compared with other fingerprint readers Industries served M2SYS biometric software and biometric readers are widely used in various vertical markets. It secures data, avoids identity fraud, reduces costs, and offers a more convenient user experience. It caters to the government, public safety, workforce management, healthcare, and banking and financial services sectors. M2SYS Technology in automatic identification sector The company serves the automatic identification sector by deploying its biometrics systems, including the following: On July 21, 2015, the company announced that the major clothing retailer, Forever 21, had deployed the M2SYS PC-based RightPunch biometric time clock. RightPunch interfaces with Forever 21 s timekeeping software by Kronos, allowing staff members to clock in and out through biometric authentication, thereby optimizing its labor tracking performance. On April 29, 2015, Mongolian bank selected the M2SYS finger vein solution for customer authentication, to streamline its customer authentication process at its branches. On October 16, 2014, the UC San Diego Moores Cancer Center deployed M2SYS Technology s RightPatient patient identification solution to identify patients as a safety precaution prior to receiving radiation treatment. 67

68 Recent developments M2SYS Technology Description Key highlights August 19, 2014: Announces that Yemen has deployed the company's TrueVoter biometric voting platform for their upcoming constitutional referendum and national elections July 15, 2014: Announces that the company's next generation M2-FuseID smart fingerprint reader has received FBI PIV certification July 1, 2014: M2SYS Healthcare Solutions (a division of M2SYS Technology) announces that Archbold Memorial Hospital has implemented RightPatient (a patient identification solution), which is designed to increase patient safety and medical data integrity February 4, 2014: Announces that M2SYS Healthcare Solutions has launched a new child anti-abduction system called KinderGuardian, which offers healthcare facilities using the RightPatient iris biometric patient identification system December 3, 2013: M2SYS Healthcare Solutions announces that Stuart (a company that deals with Health Systems) has deployed the RightPatient iris biometrics patient identification solution New product launches October 16, 2013: Releases M2-FuseID, a hybrid Biometric Identification Device powered by Finger Vein Technology from Hitachi Europe (a subsidiary of Hitachi) August 13, 2013: M2SYS Healthcare Solutions releases an infographic on the cost of duplicate medical records to the healthcare sector Awards and recognition April 29, 2014: Announces that M2SYS Technology is among four of Atlanta s most notable leaders in international business, and is selected by the Metro Atlanta Chamber as a 2014 Global Impact Award winner 68

69 M2SYS Technology Description March 20, 2014: Announces that the company is named a Technology Association of Georgia Top 10 Innovative Technology Company NEC Business overview NEC was established in 1899 and is headquartered in Tokyo, Japan. The company provides a wide range of IT solutions to various sectors worldwide. As of March 31, 2015, NEC had 98,882 employees and 232 subsidiaries worldwide; it generated $26.71 billion revenue in the same year. Business segmentation by revenue 2015 NEC: Business segmentation by revenue 2015 Others 13% Public 28% Enterprise 9% System platform 25% Telecom carrier 25% Source: Technavio, 2015 The company carries out business operations through the following segments: Public Offers safe and secure social solutions to the government sector, public institutions, financial institutions, and other institutions. The company integrates its distinctive 69

70 $ billions technology assets, including networking and sensing technologies, with customers' broad systems integration expertise and assets. Telecom carrier Manufactures and markets equipment required for network implementation to telecom carriers, including network control platform systems and operating systems. The company through its large-scale network implementation and strong technical capabilities strives to provide solutions to highly reliable communications networks. System platform Provides products such as mobile terminals, network equipment, computer equipment, software products and service platforms, and solutions. Enterprise Provides IT solutions to various retail distribution centers and provides security solutions to private organizations in Japan and also worldwide. Business segmentation by revenue 2014 and 2015 NEC: Business segmentation by revenue 2014 and 2015 ($ billions) Public Telecom carrier System platform Enterprise Others Source: Technavio, 2015 Due to currency fluctuations (JPY/USD), the revenue of the segment (Public and Telecom carrier) decreased in FY2015 compared with FY

71 The revenue comparison of the business segments is as follows: Public In FY2015, this segment generated $7.48 billion, which is $0.10 billion or 1.29% higher than the segmental revenues of FY2014. The increase in segmental revenues was due to an increase in sales from the public sector. Telecom carrier In FY2015, this segment generated $6.74 billion, which is $0.52 billion or 7.19% less than the segmental revenues of FY2014. System platform In FY2015, this segment generated $6.63 billion, which is $1.18 billion or 15% less than the segmental revenues of FY2014. The decrease in segmental revenues was due to a decrease in PCs business sales. Enterprise In FY2015, this segment generated $2.46 billion, which is $0.26 billion or 9.60% less than the segmental revenues of FY2014. The decrease in sales was due to an increase in manufacturing costs. Geographical segmentation by revenue 2015 NEC: Geographical Segmentation by Revenue 2015 EMEA 5% US 7% APAC 8% Japan 80% Source: Technavio,

72 NEC in automatic identification sector The company serves the automatic identification sector by providing biometric products to various sectors, including airports (border control terminals, border control e- passport, border control Egate solution, border control registered travelers, border control blacklist screening, air traffic control, and airport systems); space systems; educational institutions; healthcare; retail (POS solution, digital media solutions for retail, and e-payment solutions); digital broadcasting solutions; telecommunications; and logistics. The company focuses on expanding its business operations in the global biometrics market in new and emerging markets through strategic partnerships. For instance, in June 2013, the company's subsidiary, NEC New Zealand, collaborated with the Institute of Environmental Science & Research to complete an evaluation of its portable DNA analyzer. Its R&D division focuses on launching new and innovative biometrics products from time-to-time to gain an edge over its competitors and also improve its market position. For instance, in October 2012, the company launched new biometric and high-speed analysis technologies at Milopol Qatar 2012 in Doha, Qatar. NEC key biometrics solutions Solution Products Civil ID National/state ID Voter ID Driver's license Criminal ID Criminal AFIS Jail ID Security force management Border control E-passport egate solution Registered travelers Blacklist screening Border terminal controls Consumer ID Banking ID 72

73 Solution Products Healthcare ID Retail ID NEC key biometrics technologies Technology Description Hybrid finger identification Its hybrid finger identification systems help in identifying people by personal traits such as faces, fingerprints, palm prints, veins, eyes, or DNA. Finger print identification NEC offers fingerprint identification systems and technologies using a unique matching algorithm that helps in identifying a person easily. Face recognition Used in a highly diverse range of applications, extending from crime-fighting and border control to access control for sensitive areas. Multi-biometrics It is an authenticated technology that uses different biometric technologies, such as facial features, fingerprints, and vein patterns, for the identification and verification process. Portable DNA analyzer Offers customized identification solutions by using DNA. Recent developments NEC Description Key highlights August 24, 2015: Announces that its NeoFace facial recognition software was selected and deployed by the Arizona Department of Transportation (ADOT) July 16, 2015: Announces that its NeoFace Watch, facial recognition technology, is selected by Receita Federal (Brazilian National Tax 73

74 NEC Description Collection Agency) for 14 international airports throughout Brazil, including the major hub of Governador André Franco Montoro International Airport (Guarulhos Airport) in Sao Paolo and Antônio Carlos Jobim International Airport (Galeão Airport) in Rio de Janeiro, to enhance the effectiveness and efficiency of customs procedures Key partnerships March 9, 2015: Announces that its Fingerprint Vendor Technology Evaluation is ranked no.1 by the US NIST November 3, 2014: Receives a contract from Calgary Police Station in Calgary, Canada, to supply NeoFace, a new reveal facial recognition solution August 21, 2014: Its Proprietary Fingerprint Template Test product is ranked no.1 by US National Institute of Standards and Technology November 7, 2013: Establishes its Safer Cities strategy for the global expansion of its public safety business June 18, 2013: Its NeoFace Facial Recognition Software helps in identifying Boston Marathon Bombing suspect in a study conducted by Michigan State University May 29, 2013: Awarded contract for Singapore Safe City Test Bed project from Ministry of Home Affairs and the Singapore Economic Development Board to provide advanced technologies to be used for public safety September 25, 2012: Exhibits its products at Gitex Technology Week in Dubai, UAE November 22, 2012: Tests its first portable DNA analyzer in collaboration with Japan's National Research Institute of Police Science 74

75 NEC Description October 25, 2012: Collaborates with SITA to provide solutions for automated border control gate solutions in the European Union August 20, 2012: Partners with DataWorks Plus to delivery the JNET Facial Recognition System to the Pennsylvania Justice Network Safran Business overview Safran was founded in 2005 and is headquartered in Paris, France. It is a technology group and tier-1 supplier of systems and equipment in the aerospace, defense, and security markets. As of December 31, 2014, Safran had 68,945 employees. In the same year it generated $19.99 billion in revenue and spent $2.64 billion on R&D. Some of the company's subsidiaries include Aircelle, Messier-Bugatti-Dowty, Morpho USA, Techspace Aero, and Turbomeca. Business segmentation by revenue 2014 Safran: Business segmentation by revenue 2014 Security 10% Others 90% Source: Technavio,

76 ($ in billions) The company carries out its business operations through the following segments: Security Includes suite solutions designed to increase safety and simplify the life of individuals, consumers, or employers. They also protect critical infrastructure and ensure travel safety. This segment offers digital technologies for fingerprint, iris, and face recognition (biometric identification technologies), from smartcards that authenticate identity for a host of different applications to service platforms (corporate solutions). It also offers systems for detecting dangerous or illicit substances (detection). Other Includes the following three business units: Aerospace propulsion: Designs, produces, develops, and markets propulsion systems for commercial aircraft, training, military transport, rocket engines, combat aircraft, civil and military helicopters, tactical missiles, and drones. This unit also includes maintenance, repair and overhaul (MRO) activities, and the sale of spare parts Aircraft equipment: Focuses on engine systems, landing gear and brakes, and associated equipment, such as thrust reversers and nacelles, and mechanical power transmission systems Defense: Designs, develops, manufactures, and markets optronics, avionics and electronics solutions and services, and critical software for civil and defense applications Business segmentation by revenue 2013 and 2014 Safran: Business segmentation by revenue 2013 and 2014 ($ billions)

77 Source: Technavio, 2015 The revenue comparison of the business segments is as follows: Security The revenue of this segment increased in FY2014 compared with the previous year due to contracts with the US federal authorities, including TSA Pre and State enrollment contracts. Other Includes the following three business units: Aerospace propulsion: The revenue of this business unit increased in FY2014 compared with the previous year due to the rising sales of services and spares, particularly for engines installed on medium and long-haul aircraft. The civil OE and the military OE revenues also increased Aircraft equipment: The revenue of this business unit increased in FY2014 compared with the previous year due to the increase in production rates of the Boeing 787 and the A350 programs, and also driven by aftermarket growth in wheels, brakes (including carbon brakes), and nacelles Defense: The revenue of this business unit increased in FY2014 compared with the previous year due to revenue from avionics, which includes deliveries of navigation systems and seeker kit modules, and optronics products Geographical segmentation by revenue 2014 Safran: Geographical segmentation by revenue 2014 ROW 7% Asia 17% North America 33% France 21% Europe 22% Source: Technavio,