We are living in unprecedented times. The Coronavirus (COVID-19) crisis is a global tragedy that is affecting every part of our daily lives. The question on when the world will return to normality is a difficult one to answer. The emergency measures that include restriction on travel and social distancing may well be still in operation into 2021.
Over recent weeks we have been assisting our clients in understanding the impact of COVID-19 on their business This blog provides my views on the effects on identity, authentication and biometrics; the three interconnected areas that Goode Intelligence covers.
I believe that this Coronavirus is accelerating a number of key megatrends of the last twenty years, collectively classified as digital transformation. Moving away from physical service delivery to digital service delivery consumed on any device that can run an app or load a browser. This affects most sectors but is most acute for retail and financial services with physical stores and bank branches being replaced by remote digital services.
The need for social distancing is forcing all of us to perform more of our daily tasks from home. As a CEO of a small business, I am very used to working from the home office and talking to clients and contacts around the globe. I am now joined by my children who are having their lessons delivered digitally via platforms that are normally used for business web conferencing – some of which are managing to stay up with the increased demand. This is a seismic event, one that will put a strain on both technology delivery and society.
The need to accurately identify and authenticate people, and to authorise tasks and transactions through digital channels will accelerate. There will be increased demand for identity and authentication solutions that work seamlessly across endpoints, that are application-appropriate, that comply with regulation, that reduce or maintain acceptable levels of fraud, and meet sudden surges of demand (scale).
This is happening across all verticals; retail, finance, government, entertainment and education. What will be interesting, is whether this ‘emergency’ measure will become more of a permanent feature. Once we start to recover from the crisis, will we go back to commuting to work, shopping in physical stores, banking in branches and visiting theatres and cinemas?
This is my personal view on the impact of the current crisis on this sector, some have an immediate impact; others will materialise once the world recovers.
Biometrics – Don’t Touch This!
In addition to the impact of social distancing on the physical world, touching sensors on shared devices will be restricted during the crisis.
This includes sensors integrated into shared devices including ATMs, point-of-sale (POS) devices, door-locks and kiosks. It has been reported by the New York Times, that the New York Police Department (NYPD) has halted use of its fingerprint entry system at its HQ. Where there is a legal or national security need to use these devices, for instance in border control, then operators will need to keep these devices clean.
Longer-term, organisations may look at deploying biometric sensors that avoid touch in shared and public spaces. We have already seen technology integrated into airports that allow passengers to ‘wave’ their hands through a reader. This doesn’t necessarily mean that organisations will avoid fingerprint as a modality – just don’t touch.
This should not include sensors that are integrated into devices that are not regularly shared, where a single user will enrol and verify; smartphones or biometric payment cards for instance.
Biometric Payment Cards
Gauging the impact on biometric payment cards, I am predicting a delay to large-scale deployment by approximately one to two years. Existing pilots will need to be curtailed and new pilots will likely be postponed. Card manufacturing will be hit as factories are closed down around the globe, although China is slowly starting to re-open (see statement in biometric sensors below).
One of the biggest drivers for adoption is increasing spend limits for contactless transactions. As a result of Coronavirus, countries with high contactless card adoption, including Egypt, Ireland, the Netherlands, Saudi Arabia and UK are increasing the spend limit to remove the need to enter in a PIN for higher value transactions. Ireland has increased the spend limit to €50 from €30, and the UK has increased to £45 from £30. This is a small increase and does not offset the benefit enabled by biometric payment cards of lifting the spending limit for biometrically authenticated payment transactions or bring contactless cards in line with mobile payment wallets.
China, South Korea and Taiwan are the centres of biometric sensor manufacturers and these countries have been at the epicentre of the crisis. Factories have been shut down and will take time to get back to back to normal operating levels after reopening. Factories, especially in China are slowly reopening but it is been estimated that they are still operating at 70-80 percent of their pre-COVID-19 capacity. This will have a negative impact on the supply of biometric sensors to OEMs, although this impact may be lessened as OEMs, in particular mobile OEMs, have recently reported an over-supply.
Demand for consumer electronic devices will be dampened and this compounds the reduced demand for biometric sensors from the principle OEMS.
There is demand for hybrid devices that can both identify and perform an ‘at range’ quick biomedical check on citizens to determine if they may have been infected. In China, these have been worn by law enforcement officers and have also been deployed as scanners at airports. Longer-term, this could potentially kick-start the combination of biomedical and biometrics in ‘worn’ technology – smart watch, wrist bands and clothing – to create applications that know who you are and how you are. Checking body temperature, blood pressure, ECG and heart rate and also knowing the identity of the person (patient).
There needs to be an adequate privacy and trust framework to support this collection of sensitive personal data and it remains to be seen if these ‘emergency’ measures will become permanent once we are out of crisis mode.
Digital Identity Verification (Proofing)
Digital Identity verification answers the following questions:
- Is it a real user?
- Is it authorised to use the data it presented?
- Can you do business with the user?
- What is the risk of doing business with the user?
Back in May 2019, I predicted that just over 704 million digital identity verification checks would be made during 2020 around the world. As a result of the COVID-19 crisis and with businesses increasingly reliant on ‘remote’ technology to verify identity and to quickly onboard people to digital services, I believe that this forecast needs to increase – probably by an additional 15-20 percent.
In a Goode Intelligence analyst report published in November 2019 covering the market for verified digital identity we forecast over three billion digital identity users by 2025. I believe that this forecast still remains relevant but there will be different speeds of adoption between verticals and applications. For instance, for air travel, the impact of COVID is resulting in considerable reduction in passengers. The number of passengers coming through terminals for 2020/21 will be significantly reduced. IATA has predicted that the virus will cost airlines $30 billion and see passengers numbers decline by 13 percent. A driver for the deployment for the ‘kerb-to-gate’ digital identity schemes has been increasing demand on airlines and the need to efficiently process passengers from the kerb to the gate. A consortium of airlines, airport authorities and governments has developed single token systems that leverage biometrics to ensure that passengers can check-in, pass through security and board the plane without the use of a combination of tickets, passports and boarding passes. There will quite likely be a revaluation of these schemes with reduced revenue and re-purposing resources to support passenger monitoring and virus containment.
Containing the virus and monitoring citizens and has been a priority for many countries, especially those that have national identity schemes. I expect to see an acceleration in active national identity schemes that collect our ‘digital exhaust’ – identifiable data obtained from a variety of sources including mobile networks and devices, travel/transportation, social network, health networks, financial and payment systems. Even though we are in an emergency situation, this type of ‘surveillance’ identity must be carefully designed and deployed to ensure that the privacy of citizens is respected. Privacy legislation including GDPR must be respected even in these difficult times.
Financing for businesses, especially pre-revenue start-ups may become more difficult, especially in the short-term. Investors have taken a significant hit to their portfolios and will be understandably more cautious about any new funding especially for pre-revenue firms with lengthy runways. This excludes emergency measures from central governments.
How Goode Intelligence is Helping
As a business we have taken steps to support our community by suspending physical events and summits until the time is right to reintroduce them. As an established analyst company with years of experience of running online webinars we shall be creating a number of virtual summits in the coming months to educate and influence our network. If you need support with research or need to influence the industry, we would be delighted to hear from you. In the meantime, please take care and stay safe.