The North American biometrics market is likely to experience a steady growth rate, with national ID projects, ePassports, and other security projects spearheading market growth, according to new analysis from Frost & Sullivan.
The research firm reports that the industry has evolved a great deal over the past five years due to the increased accuracy rates and performance levels of the technology. Biometric standards, cost versus performance benchmarks, and interoperability issues have enabled high uptake in civil and commercial applications even as fraudulent activities and identity thefts continue to cost institutions significant revenue losses.
In its new North American Biometrics Market, Frost finds that the market earned revenues of US$364.4 million in 2009 and estimates this to reach US$1,588.6 million in 2016.
“With the proliferation of crime due to the economic meltdown, the need for optimised security was apparent across government organizations, financial institutions, retail, and healthcare industries,” says Neelima Sagar, senior research analyst, Frost & Sullivan. “Initiatives by biometric vendors and continuous investments in R&D to offer highly accurate and affordable products will considerably enhance prospects for biometrics in the coming years.”
Although the outlook for the market is bright, there are some impediments slowing its momentum, according to the company. “The economic slowdown had cast a shadow over the market, and the financial and consumer sectors felt its impact the most. In the government sector, projects were delayed; however, there were few cancellations.
“Government-backed projects typically have long sales cycles and can sometimes stretch over a year before completion, depending on the complexity of the project. Budgetary constraints and delayed testing have also contributed to long sales cycles.”
Frost believes privacy constraints have remained roadblocks for market participants. It says: “Vendors must effectively identify and address privacy concerns in the public and private sectors prior to the implementation of this technology. Intensifying the focus on building awareness of privacy issues is essential, and this can be achieved by conducting trade shows and conferences.
“Apart from this, lack of standardization and insufficient awareness of the technology, its application, and wide scope has prevented market penetration. Better awareness would lead to higher revenues for this market. In addition, highlighting the cost savings made by the existing clients could help make the technology more acceptable. As customer retention poses a challenge, there is a need for biometric vendors to display successful implementation as reference sites for potential clients.”
It advises small scale companies to form strategic alliances and large companies to undertake acquisitions to deal with intensifying competition and ensure progress.
“Strategic alliances and acquisitions will lead to deployment of multimodal technology," says Sagar. “This multi-factor authentication will provide stronger security by collectively overcoming the limitations of individual technologies and contributing to the long-term growth of the biometrics market.”