KEY POINTS

  • US smartphone makers are rapidly integrating biometrics-based features, such as fingerprint scanners, into their devices. BI Intelligence forecasts that 99% of installed smartphones in the US will be equipped with fingerprint scanners by 2021. The shift will happen much sooner for the installed base of iPhones in the US — nearly all of which will be biometrics-enabled by 2018. 
  • The global biometrics industry is becoming lucrative. Global mobile biometrics market revenue, including sensor revenue from mobile devices, fees and revenues from biometric app downloads, and authentication-fee revenue from payment transactions, will reach $34.6 billion in 2020, according to Acuity Market Intelligence. 
  • Biometric verification is valuable to payments and commerce firms because it keeps data secure without inconvenience to consumers. Passwords and PINs aren't good security mechanisms — they're arduous to input and hard to remember, particularly on the small screens of mobile devices. Biometric verification is a more secure solution for apps and devices that also bypasses the need to remember a password.
  • Fingerprints can already be used to unlock phones, verify mobile wallet payments, and open access to banking apps, among other applications. As of January 2016, 608 financial institutions in the US offered fingerprint authentication in their mobile banking apps, up from just 252 in October 2015, according to research firm Celent.
  • Biometric technology is moving beyond fingerprints. Right now, biometric verification is largely concentrated on fingerprint-scanning technology on mobile phones. But the technology is expanding, and other verification methods, including facial recognition and iris scanning, are becoming more popular.
  • Biometrics do pose their own security challenges. The unique nature of biometric verification, and the fact that the digitized record is stored locally in a secure portion of the phone, makes this data far more protected than traditional verification methods. But the risk to this type of data is also greater because unique, permanent biological identifiers are very valuable to hackers.  

Introduction

Rising digital fraud, growing concern about data privacy, and difficulty remembering an endless stream of letters, numbers, and characters, are rendering traditional mechanisms for verifying one's identity online, like passwords or PINs, ineffective. So firms have begun to explore additional pathways for verification — in particular, biometrics has emerged as one of the top alternative authentication technologies.  

Biometrics are unique biological measurements that can be digitized and turned into a trackable record, according to Find Biometrics. [...]