BIO-key International, a Wall-based provider of biometric-authentication technology, appears to be gaining traction in marketing its fingerprint scanning devices as powerful weapons in the battle against identity theft and other cybercrimes.
BIO-key announced late last month that its USB fingerprint readers, SideSwipe, SideTouch and EcoID, are being sold through Microsoft’s online and retail stores. The fingerprint scanners, marketed to both consumer and business customers, are being used for Microsoft’s Windows 10 sign-in feature, Windows Hello.
The Microsoft deal might provide the impetus needed to drive impressive growth for BIO-key. According to BIO-key CEO and Chairman Michael W. DePasquale, Microsoft has upgraded 350 million customers to Windows 10 within the past year. This means that BIO-key could generate substantial revenues even if only a fraction of those customers buy the fingerprint scanning devices.
“Even if we get one percent of that market share of customers, we will become a $100 million [company] very quickly,” he said.
That announcement apparently helped lift the company’s stature and its stock price, which is steadily edging toward a three-year high of nearly 40 cents per share. On October 11, BIO-key’s stock price closed at 29 cents per share in the over-the-counter (OTC) market.
BIO-key’s stock price has a long way to go to reach its historic high of over $13 per share, posted the year when the company went public in 1997. But the Microsoft deal and other recent and pending agreements are seen to favorably position the company in the highly competitive biometric authentication market.
The Microsoft announcement didn’t come any too soon for BIO-key, which released disappointing second-quarter results this year. Revenue was $415,000 for the quarter, compared with $2.27 million for the same period last year. During second quarter of this year, the company reported a net loss of $1.57 million, compared with a net income of $753,146 the year before.
The company blamed the dismal quarterly results on “several large-scale opportunities [that] did not close during the period for a variety of reasons that were unrelated to BIO-key,” a company press release said.
Founded in 1993, BIO-key has raised more than $50 million over the past decade. This included an infusion of $19.1 million a year ago from the Hong Kong-based China Goldjoy Group, which manufactures the company’s devices. BIO-key has a staff of 28 employees working at its offices in Wall; its development center, in Eagan, Minnesota; an administrative office outside of Boston; and in Hong Kong.
DePasquale is now carefully charting the course for the company at a time when the need for greater online security has reached a tipping point, from teenagers’ mobile phones to corporate databases.
DePasquale, who has led BIO-key since taking over his current role in 2003, said that the conversation about digital security has moved from the domain of techies to the corporate boardroom within the past few years.
“Everyone was always concerned about security, but it was handled by the CIO,” he noted. “Today, plans are being presented and risks are being discussed about security at the board level. The world we live in today is dramatically different than the one we lived in 10 years ago.”
Fingerprint scanning devices and other biometric security technologies — such as facial and voice recognition, iris scans and palm print recognition — are increasingly seen as crucial technologies for deterring cybercriminal activity.
These technologies have apparently gained greater acceptance among users because passwords, PINs, tokens and other older forms of online security are more easily breached, and are not as easy to use as biometric devices.
Given the growing concern over data security, the adoption rate of these devices is expected to increase significantly over the next few years. According to a report by the management consulting firm TechSci Research (New York), the global biometric market is projected to exceed $24.8 billion by 2021.
DePasquale believes that fingerprint scanning devices will remain the dominant technology in the biometric security field because it doesn’t have the drawbacks inherent in the other systems.
For instance, facial and iris scans might not work in places with limited or nonexistent lighting. As for voice-recognition devices, DePasquale explained that this technology can be rendered useless in buses, subways and other places where there are a number of noisy conversations going on simultaneously.
Fingerprint scans, however, are more reliable because they can be taken anywhere, and each person has his or her own distinct set of fingerprints. “It is the least invasive, most accurate and scalable” in the biometric security field, DePasquale said.
BIO-key’s fingerprint readers can be found in many industries that require fingerprint scans of prospective employees during background checks.
In the healthcare field, the company’s devices are used to verify that medical personnel are authorized to review patient records or electronicallyprescribe controlled substances.
BIO-key has also supplied retail technology brands like NCR with its fingerprint scans to use with its point-of-sale (POS) systems for retail establishments, particularly in the fast-food market. DePasquale said that many fast-food restaurants and convenience stores have updated their POS terminals, which now require users to swipe a finger rather than a card for identification purposes.
The company has also decided to market its devices to call centers because of the sensitive customer data that are readily available to call-center employees.
“If you speak with a customer representative at a call center, they will pull up your account, which could have your social security number, your driver’s license number and maybe a credit card on file,” he explained. “So if you work at a call center and want to create some havoc or steal a bunch of identities, you can do that very easily. Our technology will provide an audit trail of when accounts are accessed, which helps when there is a breach.”
On the consumer side, BIO-key sees convenience, not security, as the main incentive for individuals to switch to biometric authorization devices from cumbersome passwords. That’s because it’s far easier to swipe a finger than trying to remember a bunch of passwords to gain access to a smartphone or other device.
“Consumers are overwhelmed with passwords,” DePasquale noted.