Wednesday, April 03, 2002

Biometrics take center stage

Retinal and fingerprint scans may seems like figments of science fiction or movies like Blade Runner, but they are truly coming to an office or airport near you. The Swedish Consul General hosted a panel discussion and reception on Wednesday, April 3rd in his Manhattan residence to scan some of the real-world examples and real-life impacts of this emerging realm of technology, which is called biometrics.
Guests heard the Biometric Foundation's executive director, M. Paul Collier, moderate as representatives from Precise Biometrics, the Pinkerton Agency, Securitas Group, Visionics and the Walden Agency discussed new products and innovations. Consul General Olle Wastberg commented on some of the technology we're using today - viz., airlines embracing smart cards and fingerprints to screen passengers.

I spoke at length with Visionics chairman and CEO Joseph Atick, who explained that his involvement in the biometrics industry began before it even really was an industry. Starting out with just a handful of techies in the '80s in a national research center, he was one of the first people to discover human patterns (face, skin, etc.) could be incorporated into new types of security systems. Their first challenge was presented by the United States Post Office. The USPS wanted to see if this band of biometric-ites could develop a system that could read handwritten zip codes on mail pieces. While they developed a solution, the USPS never adopted it because it was impossible to get Americans to write the zip codes numbers in specially designed boxes (remember those five little rectangles at the bottom of the address sections of post cards?). The Japanese government, however, was able to win its population over to this new method, and the system is ubiquitous in that country.

Undeterred, Atick formed Visionics in 1994 with his own funding to develop human-pattern recognition for fingers and faces. The first round of outside financing in 1998 was for $3.6 million from an angel investor -- and since then, they've emphasized revenue generation. (Hey, how about that?!) In a reverse merger last February with a public company (Digital Biometrics--a hardware firm that made sensors that captured fingerprints), Atick changed the management structure. Today, Visionics is the largest pure-play in the biometrics space. While using different technology, each one is focused on delivering a solution that associates action with identity (access control, surveillance, security). Their big clients, as you can well imagine are governments and law-enforcement departments.

Among their bigger projects are security solutions for the Mexican elections (face scans so voters can't vote a second time, which cuts down on fraud) and West Virginia and Colorado states (to stop people from getting multiple drivers licenses). Of course, one technology they'd developed--fingerprinting in airports to ensure employees don't have criminal records-has become mandated after 9/11.

Going forward, Visionics will be targeting regulated industries like transportation, banking and healthcare for information security. By the end of June, their merger with Identics should be completed and they will be able to expand upon the commercial fingerprint technology with government channels.

Also in the fingerprinting business is Precise Biometrics. But while Biometrics stays in the finger and face scanning arena, Precise Biometrics also is developing smart cards as well. This five-year old company was formed in the Science Park in Sweden's south. This is where Ericsson started its wireless revolution and the key founders of Precise Biometrics are from Ericsson, which explains the company's stronghold in smart cards. Smart cards are used in all GSM phones, which are a standard in Europe. Precise Biometrics uses smart cards in comparing between finger and face scans and in many information technology applications like signing and encrypting email, logging into computers and gaining access to offices with physical boxes outside offices that scan a finger for its print.

Precise Biometrics CEO & president Christer Bergman told me that while the firm is just 65 people strong, they went public one and a half years ago on the Stockholm Stock Exchange, and frequently work with much larger firms. In their door access projects they've teamed up with Honeywell and Securitas. From the information technology and logical access issues, they collaborate with ActiveCard and Siemens. They've even got a few inroads to Sun Microsystems after Scott McNealy demoed their product a few months ago.

Having been in the IT business for 20 years, Bergman explained that they're focusing on areas like m-commerce and the 3G networks. His goal is to have their biometric engine smart cards for this new generation of handhelds (phones, PDAs). He cited American Express' Blue card as a good tease with promises of what may come in the future. He also sees m-commerce as the Internet itself, where one day there will be a need to know who is contacting your device at the other end for security and identity purposes. One group within his firm is developing mobile security and smart ID cards for this. As they continue to develop, they are expanding from their two offices in Sweden to the United States.

Bergman first came to Precise Biometrics five years ago, primarily helping the company with sales and marketing. But his involvement and track record prompted the board nine months ago to see if he could help run the company in Sweden as well. Bergman realizes that many people cite 50% - 70% growth in this market every year. As a result, his goals are to grow the company at double that rate.

After the compelling conversation, guests mingled to enjoy wines and salmon-themed hors d'oeuvres. Biometric Foundation executive director Paul Collier and event sponsor Weatherly Securities Corp SVP Stephanie Phillips were chatting with Grant Thornton's Leslie Baker. Sparring Partners' Warren Spar spoke of his interest in biotechnology investments to Dynamar president Jan Mardh and Visionics' Frances Zelazny. XL Enterprise's Sidney Li told me, Pillsbury Winthrop attorney Ronald Fleming and MorganStanley VP Patrick Wall about his company. XL Enterprises helps Chinese technology companies raise funds and market themselves and helps foreign firms enter the Chinese market.

As with every business and investment panel and networking event, meeting new people is one of the primary objectives. As I left my own fingerprints on my wine glass, I couldn't help but think about all the faces and fingerprints that might soon be scanned by tiny cards and scanners in places we have yet to see. Like biotechnology and nanotechnology, biometrics is another field bursting with developments set on changing our world.