BIOMETRICS WILL IT CHANGE THE WAY YOU WORK?
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1 BIOMETRICS WILL IT CHANGE THE WAY YOU WORK? Although the biometrics industry was initially driven by government, commercial applications of biometrics have been steadily filtering into other industries. If you need to provide a case for investment, this paper will give you the need-to-know information. ANZ Investigating Fingerprint scanning to fight skimmers 24-hour fitness clubs- from cards to fingerprint scans Insurance companies using voice biometrics to combat fraud. Apple bought biometrics company Authentec for $356m Health funds using biometrics to track identity theft
2 Contents The Biometric Revolution... 3 What is Biometrics?... 4 The Emergence of the Biometrics Industry Big Brother becomes Big Money Making the leap from the public to the private sector... 6 Industry Case Study: Biometrics combating health fund fraud in America The Rapid Take-up of Biometrics How do you apply biometrics to your company? Cost Reductions and Efficiency Enhanced Security and Integrity Greater Convenience and Usability Conclusion About Argus Global Page 2
3 Biometrics is the next commercially disruptive technology to make us re-think the way we run our businesses. In the simple area of time and attendance companies are saving between 2-5% of their payroll costs. Access control and security can now be automated to reduce your headcount. CEOs now need to look at the value of Biometrics and put that value to their corporations... because the benefits are in the millions. Ken Farrow, Argus Global The Biometric Revolution Successful companies are constantly seeking out ways to rein in costs. However, technological advances can often pass unnoticed, even though they are the lowhanging fruit that can lead to a rapid improvement in cost structures. Biometrics has become a case in point. A few years ago, CFO.com rated biometrics as one of its top-ten Need to Know technological developments. Biometrics has now well and truly landed. Are you making it work for you? Not that long ago, biometrics was only the domain of Sci-Fi fantasy and James Bond movies. However, major improvements in reliability and usability in recent years, as well as rapid tech-driven reductions in cost, have brought the benefits of biometrics within the reach of small and large organisations alike. Furthermore, the burgeoning market in consumer biometrics, from Apple to Intel, has brought the benefits of biometrics right into our daily lives. According to the 2012 Biometrics Institute survey, consumers and suppliers agree that the biometric revolution will quickly become as pervasive as the digital revolution that preceded it. This paper presents a number of practical ways that firms can turn the biometric revolution to their advantage. Page 3
4 What is Biometrics? The term biometrics refers to the identification of human The term biometrics refers to the identification of human beings based on unique biological characteristics, such as fingerprints, irises and even voice. It is those unique characteristics that allows this technology to ensure that the individual that is performing a function, acquiring an asset, accessing data or entering a room is exactly who they say they are and is authorised to do so. Biometrics ensures that the individual that is performing a function, acquiring an asset, accessing data or entering a room is exactly who they say they are and is authorised to do so. It is a puzzle as to why biometric take-up in Australia is lagging behind the developed, and even some parts of the developing world. While the superiority of biometric security and control is widely known, in the past 5 years biometrics has become more cost-effective than many of the previous generation of security systems. This is creating opportunities for industry-leaders in Australia to leverage the biometric revolution to their advantage. Consider the systems you use to control access to work sites, regulate and monitor the movement and activity of employees, or provide access to clients. It is possible that there already exists an opportunity to use biometric systems to improve security and reduce costs. In many parts of the world, biometrics has already become the industry standard in security, corporate espionage and threat management. Reductions in cost and broadening accessibility have also meant that biometrics is increasingly finding a role in OH&S and HR management systems from monitoring remote staff in busy real estate companies, to controlling access to dangerous areas of a mine in South Africa. Biometrics has also become the system of choice for companies where security is a cornerstone of their corporate image and client relations from global data storage centres, to child minding facilities in the US. Biometrics has also become the system of choice for companies where security is a cornerstone of their corporate image and client relations from global data storage centres, to child minding facilities in the US. Page 4
5 The Emergence of the Biometrics Industry Big Brother becomes Big Money These days there are a wide range of biometric systems, from retinal scans to bodyodour recognition. However, fingerprint scanning continues to dominate threequarters of the biometrics market, while face, iris, vein, and voice recognition make up the bulk of the remainder. The Biometrics Research Group estimates that the global market for biometrics is currently worth around US$7 billion. They project that over the next 3 years the market will expand rapidly, almost doubling to US$15 billion by This is indicative of just how rapidly frontier biometric technologies have moved into commercial viability. As The Economist magazine puts it: Big Brother has become Big Money. Page 5
6 Making the leap from the public to the private sector In its infancy, the biometrics industry was driven by government, and it is true that the primary application of biometrics remains in policing and border control. However, commercial applications of biometrics have been steadily filtering into other industries. Nimble tech companies have been able to market biometric innovations to all levels of business. A recent survey by the Australian-based Biometrics Institute highlighted the diverse application that biometrics currently enjoys. The majority of systems sold in the past year remain employed in identity management, immigration services and border control, as well as physical access management. However, a growing number of systems are now used in combating identity theft and fraud, online authentication, and most recently, improved customer service. A growing number of biometric systems are being used to combat identity theft and fraud, for online authentication, and most recently, improved customer service. Page 6
7 Industry Case Study: Biometrics combating health fund fraud in America Identity theft and fraud has been costing the American healthcare system millions. However, it is not just the heavy financial costs that are threatening the integrity of the healthcare system. Patient misrepresentations and fraudulent access to drugs and prescription medicines threaten patient and public welfare. This in turn raises the concern of liability issues for healthcare providers. Statistics show that 1.85 million Americans fall prey to medical identity theft every year. On average it costs $22,346 to restore a stolen medical identity. Sometimes these costs are borne by the individual. Often they are transferred across to providers in the form of settlement costs. To protect consumers and to ensure the integrity of their own systems, CrossChx and Holzer Health Systems have engaged a biometric solution. Consumers can now optionally have their fingerprints tied to their health fund records. A majority of consumers have elected to enrol in the system, and this will no doubt lead to a substantial reduction in the incidence of medical identity theft. The system is also cost-effective and easy to administer, as individual fingerprint registration takes less than a minute. Biometric technology is providing healthcare consumers with valuable protection, and is freeing up funds to direct into better care and better services. Page 7
8 The Rapid Take-up of Biometrics In many areas of the world, biometrics is quickly becoming common-place and in a variety of applications. Visitors to Walt Disney World in Florida have their finger tips scanned to prevent ticket fraud, and biometric access is increasingly replacing other consumer access systems from fitness centres to child day-care facilities. Visitors to Walt Disney World in Florida have their finger tips scanned to prevent ticket fraud, and biometric access is increasingly replacing other consumer access systems from fitness centres to child day-care facilities. At the same time, consumer electronics has also emerged as one of the most exciting frontiers of biometric advance. As the functionality of personal technology expands, so does the need to secure the devices and protect users against fraud and identity theft. Samsung s Galaxy Nexus phone already incorporates a facial recognition function, while in September, Intel prototyped a tablet that interfaces with all of a user s passwords and log-ins via a scan of the palm. In July, tech-giant Apple paid US$356 million for AuthenTec, whose fingerprint sensors are used in phones and buildings. Last year, Apple even registered a patent for their own facial recognition technology. The acceptance of biometrics by the broader public has important consequences for their corporate application. As biometric consumer items become common place, staff resistance to internal biometric systems will wane. Biometric access and biometric time and attendance systems have, in the past, been stigmatised for being too intrusive or as an invasion of privacy. Employers are finding that this is becoming less and less of a concern. In July, tech-giant Apple paid US$356 million for AuthenTec, whose fingerprint sensors are used in phones and buildings. Last year, Apple even registered a patent for their own facial recognition technology. Page 8
9 How do you apply biometrics to your company? Some of the trends we ve discussed show that the biometrics revolution is well and truly under way. We are at a tipping point not only around the world, but in Australia. But how can your health fund capitalise on the global advances in biometrics? Quite simply, in any business process where people are involved, biometrics can reduce risk and costs. But to answer this in more depth, consider the factors that are driving more and more health funds to consider biometric solutions. Market penetration is being driven on three fronts. The first is that recent advances in technology and the automation and integration of biometric systems often makes them more cost-effective and efficient than the systems they are replacing. Secondly, at comparable prices, the clear superiority of biometric security makes these systems an obvious choice for both consumers and organisations in the current era. Third, the improvements in the usability and convenience of biometric systems have also become a significant factor in understanding their appeal. These three factors are a guide to health funds in trying to understand the potential role of biometrics in their own businesses. Each of these is discussed in turn. 1. Cost Reductions and Efficiency The cost of biometric technology has fallen rapidly in recent years. However not only are biometric systems more affordable, regardless of the size of your organisation, their ability to integrate with and improve existing business systems means there is generally a very rapid return on investment. If used as a SaaS model, the ROI is virtually immediate as there is no upfront capital outlay. The cost advantages of biometrics are most potently realised in creating more integrated and streamlined administrative systems. Previously, the management of passwords, ID Cards, tokens or other forms of identification required significant resources, particularly for large organisations.biometric systems can significantly simplify the process. Health fund organisations are able to engage biometric solutions to protect consumer data and avoid the heavy settlement costs associated with medical identity theft. Consumers increasingly demand the highest levels of protection for their personal information. With personal identity restoration costs running to over $20,000 in America, this has become an easy sell to consumers. Page 9
10 Finally, in cases where organisations use a multiple number of secure systems, an integrated biometric system can also be a real advantage. Biometrics have been very successfully trialled in hospitals in the US and UK for example. Hospitals have a number of secure systems, from physical access to particular areas of the hospital, to accessing patient databases or pharmaceutical dispensaries. In some cases, doctors offices were being covered with sticky notes, containing unique passwords for dozens of separate systems. Simplifying multiple access keys into a single biometric feature, such as a fingerprint, proved to be a much more efficient strategy. In this way, biometrics, integrated with tailored administrative systems is streamlining business systems, improving processes and delivering real cost benefits. 2. Enhanced Security and Integrity Biometrics, based on unique physical characteristics, offers the ultimate in personal verification and security. As well as protecting a company from external threats, biometrics also offers protection from internal threats, such as employee fraud or malicious intent. Biometrics will allow health funds to ensure that their consumers are getting what they paid for and they are servicing the right customers. The public perception is also firmly that biometrics offers the tightest security money can buy, and rightly so. Can your health fund afford to be seen to be employing sub-standard security systems? The bullet-proof image of biometrics is driving a take up in UK-based data centres, where the security of a client s data and equipment is an essential component of the services they offer. Similarly, child day-care centres across the US are responding to parent requests and installing biometric access systems. While the systems create peace of mind for their clients, they are also increasingly tied into billing systems and easing the administrative burden. In the health fund industry, security is paramount. You need to know that your consumers are receiving what they paid for, and that no one is taking unfair advantage of your subscription services. Identity theft in the broader community has increased tenfold in the past couple of years due to the amount of data available on the web and the sophistication of new hacking technologies and methods. Health funds in particular need to know that their systems are secure. Consumers had faith that the system would protect their identity. Page 10
11 3. Greater Convenience and Usability The 2012 Biometrics Institute Survey noted that customer service was one of the fastest growing categories of biometric application. In this way, it is not just superior security, but the superior convenience of biometrics that is pioneering new market applications. The 2012 Biometrics Institute Survey noted that customer service was one of the fastest growing categories of biometric application. Biometrics is particularly easy to administer. It only takes a moment to register a customer s fingerprint for example, and to tie that record to their personal accounts. Health funds in the US for example have found that the take-up of fingerprinting options has been overwhelming Consumers feel secure and protected, and it is simple and easy to participate. Biometrics then is being used to further drive brand loyalty. It sends a clear message that the company cares not just about customer security, but also their time and convenience. Framed in this way, consumers are responding very favourably to the roll-out of biometrics into various product segments. Client and customer access has become one of biometrics fastest growth areas. Page 11
12 Conclusion The biometrics revolution has begun. Biometric systems are quickly becoming the systems of choice for people-centred processes from site security to HR management, from customer access to managing a company s own image of stability and strength. Biometrics has spread quickly around the globe, yet take-up in Australia remains unusually slow. The security advantages are certainly well understood. Perhaps companies still doubt the reliability of such cutting-edge technology, or they are yet to understand the cost advantages of biometric systems. This remains to be seen. Hopefully, this paper has highlighted the various cost and security advantages biometrics offers. However, if you still unsure about the potency of biometrics, we urge you read the following paper, which tackles some of the remaining myths surrounding biometrics: Challenging the Biometric Myths Page 12
13 About Argus Global Frost and Sullivan Biometric Vendor of the Year 2010 Founded in 1997, Argus Global delivers enterprise level and bespoke business solutions that incorporate biometrics. We create systems that streamline business processes through the unique and secure identification of people. Argus Global s systems have been deployed worldwide to mitigate risk, increase security, improve business efficiency, and manage information. Our comprehensive portfolio of biometric solutions are currently in use by a diverse range of clients and partners, such as: Argus Global PTY LTD ABN T: F: info@argus-global.com Page 13
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