FindBiometrics president Peter O’Neill recently spoke with BIO-key chairman and CEO Mike DePasquale after his company’s strong presence at this years Consumer Electronics Show (CES) in Las Vegas. The conversation starts on the topic of BIO-key’s newly launched biometric padlocks, and the consumer-facing market in general, before moving on to the company’s major authentication service contract announced in December. The interview concludes with broader discussion of the biometrics industry, taking advantage of DePasquale’s long-time experience in the biometrics industry.
Peter O’Neill, President, FindBiometrics (FB): You have just returned from the giant CES show in Vegas. You announced several solutions there, but the one I would like to talk about is the Consumer Facing Biometric Padlock. Very cool looking. Tell us how that was received?
Mike DePasquale, Chairman and CEO, BIO-key: Well as you know we have entered the consumer market with our finger scanners back around 6-9 months ago and we felt that consumers are going to want to utilize biometrics for more than just logging onto their computers or perhaps accessing their information. We believe there is a tremendous opportunity to reduce the friction of PINs and passwords, keys, in this case with locks, tokens and cards, by incorporating biometrics in products that consumers can buy to secure more their physical infrastructure and to do it at a reasonable cost. So, we had been thinking over the last 9 months that there could be nice extensions to our product line where we have set up distribution. We’re now in retail venues through many partners including Dell, Walmart.com, jet.com, so we felt that we had the perfect distribution channel now to introduce other products. Padlocks that are used for almost anything you can imagine from securing your shed in your backyard, to securing your luggage, to securing a locker at the gym. In just the education marketplace, think about how many lockers there are, and how many students are using padlocks with combinations or keys. There is a tremendous opportunity out there and we have developed, as you described, some very nice designs, but more importantly are the electronic components that work really, really well. The false accept rate and the false reject rates on these locks is going to be outstanding. We are using a significant sensor size— 8×8 mm, and we will soon move to 9×9 mm, which will get tremendous accuracy for consumers. We will, I believe, be the first player in the market to have coupled our very high quality biometric technology along with applications in the consumer market that are really going to work well for them.
FB: It is interesting, Mike, that when I first saw the images of the new biometric padlock, to me this could be a game changer in the push to consumer biometrics because a lot of young people have padlocks, as you mentioned, in education. This will be seen as a very cool product by them. When Apple introduced the fingerprint sensor onto the iPhone many years ago, that is what really pushed it, it was cool. Number one it’s secure, but number two it’s extremely convenient and very cool.
BIO-key: I agree, Peter. More importantly, back to Apple and Samsung, they have introduced biometrics to over 250 million consumers here in the US and maybe close to a billion consumers globally that are utilizing biometrics for access on their smartphones. So, they are accustomed to and certainly desirous of using this technology, so why not expand it out to other areas again beyond not just a smartphone or just accessing information.
FB: What else were you showing at the CES show?
BIO-key: We were showing some updates and enhancements to our existing finger scanner product line. We have a product called SidePass which is ultimately a replacement for our SideTouch that is significantly smaller and also has a really cool design. It will be available in different colors.
We also showed a concept we have for a wearable device. As computers now move to the latest versions of USB, USB3, and USBc the connector is much, much smaller and so we believe that there is an opportunity to have a device that you can use universally: in your computer, your phone, to identify yourself across the board. So, we introduced a wearable version that is a dongle that can be worn around your neck or it can be attached to your phone or to your briefcase that will allow you to plug and play and authenticate yourself using Windows Hello or perhaps using our WEB-key platform.
FB: You mentioned Windows—you are a Microsoft biometric partner for Windows 10, can you tell us a little bit more about all of that?
BIO-key: Yes, we have been working now for nearly a year with Microsoft and coupling our finger scanner technology and incorporating that directly into the Windows platform to take advantage of Windows Hello and Windows Hello for Business. Also, Microsoft is selling our finger scanner solutions, our products, in their retail stores as well as online. So, we have a very close relationship with them and that has really been excellent in terms of creating visibility for us and also as a catalyst creating volume opportunities for our product sales.
FB: You also just announced a new contract for your biometric authentication platform, I think it was announced just back in December. Can you tell us how that works?
BIO-key: I can. We just talked about our consumer business and our finger scanner business but BIO-key was really founded and fundamentally spent nearly 20 years developing a software platform that is device independent and enterprise class biometric matching that is now getting great visibility within the market as biometrics are becoming more and more the only option for strong authentication going forward. And so, our WEB-key platform has been installed in many marquee customer locations through the years but this past December we announced our first large subscription contract for the utilization of our technology across a very, very large group of employees that this company is going to replace their passwords and use our biometrics for. So, this is kind of a landmark contract for us because it is our first large subscription contract and it is also very, very large in encompassing a corporate wide authentication initiative.
FB: That is very exciting. Is this just another sign that biometrics are finally going mainstream? This is all happening very quickly and in our latest Year in Review poll, 65 percent of the respondents felt that 2016 was indeed the year that biometrics truly felt mainstream. What is your take on that?
BIO-key: Well for you and I that have been in this business a long time and who have declared this would be the year probably ten or fifteen times it’s hard to say that with a great level of credibility but I do believe, I really do believe that the thermals are now in place for biometrics to take a very significant leap forward. The proof points are there, you can see that everything south of the mobile device segment is now beginning to wake up and realize that this is the only option.
The real problem, if you want to boil it down to something I think material besides security, is that all of us are overwhelmed with passwords and it is becoming much more difficult to reset them when we forget them or they become compromised. So, we have got to have another way to authenticate ourselves to ensure that we can continue to access the maybe 20 or 30 or maybe more sites that we may utilize on a daily or monthly basis. It is just too complex so biometrics are absolutely the perfect option, the technology has matured to the point where it is very accurate, and the hardware availability is there as well and that includes fingerprint scanners, cameras for facial recognition, infrared cameras for iris recognition and the technology for voice biometrics to the point where it is now today much more secure.
So, depending upon the application, biometrics solutions and biometric technology can be paired to improve the user experience across the board.
FB: You know, today Mike, I was trying to sign into my tennis club to book a court, it was the first time I’d done it this winter and for the life of me I could not remember my password and I was stuck. I think in 20 years’ time people will look back and say,” My gosh, can you believe that they had mountains of passwords and usernames and how did anybody deal with it?” They will look back and wonder how we all managed, and in fact: we are not managing! It is failing and it is failing fast so I think you are right, this is a key driver for the industry.
Let me ask, has this been a good year for your company and what are some of the highlights?
BIO-key: It has been a very good year for our company because we have established ourselves. Number one in the enterprise business as a leader in enterprise solutions. Number two, our hardware solutions; SideTouch, SideSwipe, our Eco-ID and now our SidePass, are being widely accepted in the market and so we have established ourselves as a provider of high quality, very efficient, low cost products. So, that is a very strong and significant move for us.
The third is our international and global presence increasing. We opened an office through an affiliate in Morocco to cover the Middle East and African markets. We also opened an office in China in Jiangmen in Shenzhen to service the China market and an office in Hong Kong to manage our operations there. We have staffed that organization such that we have 12 people now in Asia in research and development, engineering, logistics, manufacturing as well as sales. This has been a very significant year for us. I believe it will have a huge impact for us going forward and on our revenue going forward as well.
So, we have kind of sowed the seeds, I will call it, to put ourselves in a position where we can grow our business significantly and look at hyper growth through the end of this decade.
FB: Finally, Mike, as one of our industry’s thought leaders what do you feel are some of the challenges that we face with the speed at which biometrics is growing right now? I know that you do a lot of work with the IBIA for example and helping to provide leadership. What are some of the main challenges that we face in the next coming years?
BIO-key: I think the challenge is going to be ensuring that our industry affiliates: the companies that are producing, manufacturing, developing and marketing biometric technology, meet the quality standards that the average consumer and the enterprise user is going to require. In my opinion that is the biggest challenge for us. I think we are over the privacy issues, we are getting over the concern around the utilization of biometrics and what the crossover is to the forensic markets. I think we have debated that for years and there will always be a debate there and that will not only be in the United States but in Europe and in Asia as well. But quite frankly, I think we are beyond that today because we are just so overwhelmed with the password system that we just can’t deal with it anymore. So, it is really now incumbent upon our industry to produce, design, develop and deliver quality products that meets the markets requirements. I think if we do that, as you mentioned before, biometrics will absolutely, unequivocally replace passwords within the next two to three years.
FB: Well Mike, as always, it is a pleasure to speak with someone who knows our industry as well as you do. Thank you very much for speaking with us today.
BIO-key: Well, thank you, Peter, for giving us the opportunity, we value that and appreciate it. Thank you.