Market outlook for the biometric industry

Recently we had the pleasure of interviewing Alan Goode, Chief Analyst at Goode Intelligence, about his insight on the market outlook for the biometric market. Goode Intelligence is a UK-based analysis and research company.

What is the market size for biometric identification solutions in 2024?

Goode Intelligence research shows that during 2023 the market for biometric identification grew by 13 percent CAGR to USD 14B and is expected to continue to grow by 14 percent to USD 16B in 2024, driven by growth in smart phones, access control, digital identity verification, banking and payments and automotive areas.

Which key high-level trends drive the need for biometric identification in 2024?

There is a pressing need to identify people securely and conveniently to support digital transformation for government, consumer, and employee scenarios. The world is becoming more insecure, and governments and businesses will need to continue to adopt biometric technology to keep people safe. This need for biometric identification is further accelerated by the disruption caused by artificial intelligence (AI). It has never been easier to generate fake identities and personas using widely available AI tools. A study published in 2023 has shown that fraud involving AI-generated identities has risen 17 percent over the past two years and 76 percent of financial professionals believe that their companies have approved customers using synthetic identities. The research, conducted by Wakefield and commissioned by U.S. synthetic identity fraud prevention company Deduce, also reveals that 87 percent of experts anticipate the problem worsening in the coming years. It is important that organisations partner with the established experts in biometric identification who have a track record of being one step ahead of fraudsters and attackers.

Smart phones have been the center of biometric solutions. What is the next big category to embrace biometric identification?

Smart phones will remain an extremely important market for biometric identification solutions, with a continuation of the trend of facial recognition, as well as under and in-glass fingerprint identification. In addition to this, we expect that we will see strong demand from a number of categories that are poised to lead to growth for biometric identification, including government-issued digital identity verification supported by government initiatives and frameworks, automobiles, to promote frictionless security, driver personalization and in-car payments, physical access control providing a secure and convenient way to enter buildings, and smart cards, for both payment and access control. For many of these categories, biometrics will continue to be the number one choice for secure identification and authentication.

Face has grown a lot because of the adoption in mobile phones, but based on what many key industry influencers are talking about, palm seems to be the next big modality for identification. What are the main use cases for Palm?

Palm is a really good alternative to face and is being used for a wide range of use-cases including physical payments and physical access control. It can have distinct useability and security advantages over face in certain circumstances. Especially when it comes to demonstrating active purchase intent and not just identification. For example, it has been chosen by Amazon as the biometric modality for its in-store biometric solution, Amazon One. Amazon announced in 2023 that it would be expanding Amazon One to all 500+ Whole Food Markets in the US. Additionally, Amazon One has been rolled out to Panera Bread Restaurants and across the US for sports stadia and airports. In China, we have seen palm being rolled out as an accepted payment method in subways.

Fingerprint identification and biometrics is now coming to cars and driver authentication as evident at CES 2024 How fast do we see that rolling out?

Goode Intelligence identified automotive as being a key market for biometrics already back in 2017 with the publication of the first edition of our “Biometrics for the Connected Car” market analyst report. We updated this report in 2020 where we forecast that by 2026 over 75 million biometric sensors will be integrated into cars. This includes four main biometric modalities, fingerprint, face, voice and iris. In many circumstances a car will support more than one biometric modality, for instance fingerprint and face. Major use cases driving this adoption are car personalization, in-car payments, health and safety, and insurance. At CES 2024 in Las Vegas, Auto Biometrics was a hot topic with announcements from Continental on a face biometric solution joining supercar manufacturer Lamborghini in showcasing the benefits of biometrics. Semiconductor giant Infineon was also present and showing their in-car biometric solutions running Precise Biometrics software. This is a field where we will see a lot of innovation in the coming years as the electrical cars compete for the best and most user-friendly driver identification and personalization solutions.

Electronic access systems have started embracing biometric identification solutions. What are the main obstacles to overcome?

We are seeing traction for the use of biometrics in physical access control, as it offers several clear advantages over existing card-based solutions. These advantages include better security, for instance avoiding tailgating and access card sharing, improved user experience, and lower lifetime costs. However, there are a few obstacles to overcome to propel biometric electronic access systems into the mainstream. It is therefore vital that businesses choose a capable and expert partner to bring them on the journey to biometric identification systems in this sector.

What is the outlook for biometric access systems adoption in the US compared to Europe, based on regulations? 

For both regions it is important to ensure that biometric access solutions comply with local legislation. This is relevant worldwide and is especially the case in regions that have strong data privacy and biometric-specific regulations, including the EU and North America. In the EU, biometric access systems must comply with GDPR with people providing explicit consent to allow their biometric data to be collected for a specific purpose. Biometric data collectors must also protect that data in a secure manner. The US doesn’t have country-wide regulation that affects biometric data but does have several state laws that are applicable to biometric data with at least five US states that have laws addressing biometric data. I believe that suppliers that have the experience of working with biometrics for decades, and a detailed knowledge of biometric regulation, will have success in deploying biometric access systems in both Europe and North America. This will help alleviate many of the concerns that businesses have in deploying biometric identification systems and ensure that biometric access systems in both regions will be widely deployed.