Interview with Rich Agostinelli, CEO, DigitalPersona

Interview with Rich Agostinelli, CEO, DigitalPersona


fB: Where are you seeing the greatest growth and adoption of biometrics outside of government use?

DP: Where we are seeing it Peter is in financial services, health care and retail point of sale. We have focused on the commercial markets since the company’s founding and we are now starting to see pretty significant growth in those segments. I think in terms of financial services, you have the full concept of financial inclusion and microfinance initiatives that is happening especially in emerging markets… what they are calling KYC or Know Your Customer initiatives. These are all driving the need for strong authentication. Retail point of sale has been a market that we have been in for quite some time and the ROI there is really starting to show. In order to get rid of what they refer to as “buddy punching” where you punch in and out for your friend, we now have positive identification using biometrics. And that is becoming even more important in the US with the adoption of the Affordable Care Act where if you work more than x number of hours a week, the employer is required to pay your health care benefits. This makes it essential that they get accurate hourly counts by employee. And in health care, we are seeing a move towards patient facing applications, not only for compliance initiatives but also for ease of enrolling people into the hospital and bringing up patient records etc.

fB: Well I couldn’t agree with you more, I think those two marketplaces, financial and health care are very explosive growth markets. And you recently purchased Identity Stream which is a software solution that uses fingerprint biometrics in banking environments. Can you tell us about that and why you decided to move in that direction?

DP: Yes, we are very excited about that acquisition. Based on our market research in things that you and I have just been talking about, we realized that financial services was going to be a huge market for us, particularly in the emerging markets. DigitalPersona already has a large installed base of financial service clients in the US and also in Europe and Latin America, but we really didn’t have an entry point in emerging markets, specifically in Africa and parts of Asia. IdentityStream is specifically in those markets through its partnership with Temenos, one of the leading banking ERP software companies in the world. The biometric IdentityStream module is tightly integrated with the Temenos ERP system. With the acquisition of IdentityStream we accomplished a few things: One is that we gained an entry point into these emerging markets. We gained a partnership with a leader in the financial services space who wants to focus on the ERP side and also embraces biometrics for strong authentication. And secondly, what we learn from the active deployments will also help us shape our authentication solution, which will be used outside the Temenos environment. It’s a nice transaction for us.

fB: I just returned yesterday from Money 2020 in Las Vegas and there was a lot of talk about the underserved banking areas in the world and what a huge growth opportunity it is and where biometrics fits in. So congratulations, I think that is a very smart move on your behalf.

DP: Thanks very much Peter and I would like to add that when I was on a speaking platform last year at the London Biometrics show with a gentleman from the government of Nigeria, he said something that really struck me at the time. He said that in Nigeria 80% of the personal identity documents are what he referred to as “self-generated”. It is such a huge problem that they are just leap frogging over the traditional forms of identification and embracing biometrics. So that is just another data point.

fB: What are some of the other major initiatives underway at DigitalPersona?

DP: What is happening now is the need for strong authentication and the use of biometrics is becoming more and more popular. Our customers and potential customers are becoming deluged by possible solutions; should they use fingerprints, iris recognition, facial recognition, palm vein, finger vein, hand geometry, you name it. Should they use other forms of strong authentication? What other tokens should they use – pin cards, OTC’s, passwords, etc.? They know they have security issues and need strong authentication, but they don’t really know exactly what they should use. So we are building up our solutions capability and adopting more of a consultative selling approach to help our clients design the solutions which hopefully then contain our components. It’s more of a customisation and deployment model where we can to help our customers solve the problems. We have some very strong components, but it is a matter of communicating and educating, helping our customers deploy those applicable to their specific use case.

The other thing I would mention is that we are expanding our line of standards based fingerprint readers. What I am seeing is that the growth in the commercial programs, specifically health care and financial services in the emerging markets, are taking their lead from government sponsored national ID programs. These programs by and large use “standards based” sensors. So although we focus on the commercial markets, we see that the solution designs are being modelled after the national ID programs and we are making sure we have the standards based readers that are necessary in those programs.

The final thing that I would say is that our next generation multifactor authentication platform which we will be unveiling at the Cartes show next month called ALTUS is moving outside of active directory which has been our domain for the past several years. Now we can address not only employee facing authentication use cases which is still a growing market, but also expand to customer facing applications which need to exist outside of active directory and ultimately in the cloud.

fB: This is a very exciting time for the industry and you are really well positioned as a company to take advantage of all of the things that are happening right now in this space. At the Tampa BCC we held a one day Executive Summit called Biometrics UnPlugged to specifically make sure that companies were aware of health care and financial and how great the opportunities are in these markets. You have already made moves to solidify your position there so I think you are doing a lot of the right things.

DP: Well thank you. We do think we have a combination of unique experience within DigitalPersona. Not only do we have many, many years of biometric experience specifically fingerprints, but we also have many, many years of strong authentication software which is not perhaps as well known. We have probably 200 million users around the world that use a combination of our hardware and software platforms. We have one of the most widely distributed authentication platforms in the world. The combination of strong authentication as well as biometrics will position us well, so I thank you for that.

fB: How do you see Apple’s adoption of fingerprint biometrics impacting your business?

DP: Well I think we do view it as a very significant event. I think most of the world does, principally because it is driving the trust and awareness of the use of fingerprint biometrics. Our markets, of course, are commercial and Apple is squarely focused on the consumer space, but as the general public gets more and more used to the idea of using their fingerprint to establish their identity, to authenticate themselves, that of course will migrate into the workplace where there will be more wind behind efforts that already exist. I think that will be the principal thing that we are excited about. We are watching it very closely and are pleased with the way that the technology has performed on the phone. We certainly think that it will help drive further adoption in the commercial space.

fB: I agree and I am sure we will hear more over the next few months. Thank you very much for taking the time to speak with findBIOMETRICS.

DP: It has been my pleasure Peter.