Sensar knows!

["X" <xasper8d@lobo.net>]

<the last line of this is a funny double entendre>
HERE'S LOOKING AT YOU, SENSAR
By Peter D. Henig <mailto:peteh@redherring.com>
Red Herring Online
November 3, 1998
You walk out the door and down the street to find the closest ATM machine,
but reaching into your wallet -- "oops" -- you forgot your cash card.
Don't you hate that?
Well, if Sensar, a biometrics manufacturer of iris identification products
has anything to say about it, you'll soon be tossing that ATM card in the
can.
Sensar has announced the world's largest ever combined equity investment in
the field of personal electronic identification -- which is actually a
bigger deal than you might think.
Moving a step closer, as the company puts it, "toward making PINs and
passwords obsolete," Citibank, NCR, J.P. Morgan, Lehman Brothers, Merrill
Lynch's wholly-owned subsidiary, KECALP Inc., and others have invested an
aggregate of $28 million in Sensar as the company attempts to further roll
out its iris identification pilot programs around the world in the hopes of
owning this futuristic segment of the biometrics market targeted at the
financial services and banking industries.
Who cares?
Who cares about equity stakes in biometrics companies?
Good question, and the same one we asked when the company came a-pitching us
their story.
It turns out, however, that biometrics is -- as Sensar likes to remind us --
an emerging technology that could soon turn into a hot, if not huge, market
around the globe.
With the initial results of their European pilot program (set up in a small
city outside London), it's "going very, very well, and I do mean very well."
According to Per-Olof Loof, Senior Vice President of NCR's Financial
Solutions Group, Sensar is pumped to push forward with its iris recognition
products, shooting for commercial roll out in 1999, and a real ramp up of
shipping product by 2000 and 2001.
The Sensar Secure Iris Identification System is currently being used in NCR
ATMs and at teller stations at Nationwide Building Society, the United
Kingdom's largest savings and loan. Sensar's Iris Identification product was
also used by professional athletes for access control and security at the
1998 Winter Olympics in Nagano, Japan. Citibank, an equity investor, has
also launched an in-house pilot program using its employees to test iris
scan technology.
And just how big is this market?
While company officials wouldn't be pinned down on specific forecasts, Mr.
Olof noted that there are 20 billion customer transactions annually on NCR
ATM machines alone, and that NCR has 37 percent market share. That's not a
bad partner for a private company like Sensar to have.
Moreover, Tom Drury, president and CEO of Sensar noted that there are
currently 900,000 ATMs worldwide and 160,000 new machines shipping each
year.
Smile!
The unique aspect of Sensar's products is that you may not even be aware
you're being watched.
Sensar's iris identification products use standard video cameras and
real-time image processing to acquire a picture of a person's iris (the
colored portion of the eye), digitally encode it, and compare it with one on
file -- all in the space of a few seconds. It allows for highly accurate
identification (comparing features across a whole database) and verification
(comparing features with a single template) in a user friendly environment;
second in accuracy only to retina identification using sans-laser beams.
In layman's terms, this might mean opening up an account at your local bank
by simply sitting down, having them take a snapshot of your eyeballs, and
then hitting the ATMs or tellers for some cash.
According to the company, iris recognition uses digitally encoded images of
the iris to provide a highly accurate, easy-to-use and virtually fraud-proof
means to verify a customer's identity. With 266 identification
characteristics, the iris is the human body's most unique physical
structure. And unlike other measurable human features in the face, hand,
voice or fingerprint, the patterns in the iris do not change over time;
receeding hairlines be damned.
They're not alone
"This landmark agreement puts iris identification light years ahead of any
other personal electronic identification technology," said Mr. Drury.
"Clearly, this agreement validates Sensar's product as the most accurate,
customer-friendly, cost effective personal electronic identification product
ever developed."
That's not bad cheerleading, but Sensar is clearly not the only biometric
firm in the identification market's field of vision.
According to the Gartner Group (IT
<http://www2.nordby.com/herring/returnquote.asp?SYMBOL=IT>), Miros and
Visionics were the first companies to enter the facial recognition market,
although facial recognition tends to be a less accurate means of
identification. These two companies offer far cheaper products than Sensar,
and are targeting applications to such markets as PC and network access and
online transactions. Sensar, however, will also be designing for and
marketing to the online environment, as it envisions iris technology hitting
the desktop environment.
While the Gartner Group forecasts that the more widely accepted fingerprint
recognition techniques will be the remote access standard of choice through
2001, it also predicts that "aggressive financial organizations will begin
full-scale rollouts of iris recognition for tellers and ATMs by 2000."
Hence, the $28 million equity stake in Sensar by this highbrow club of
financial institutions.
By 2002, Gartner analysts predict iris recognition will be the biometric of
choice, an area where IrisScan Inc. holds an exclusive patent. (Sensar uses
the iris recognition process developed and licensed from IriScan, Inc., and
has the exclusive use of that technology for all financial services
transactions.)
And as far as exit strategy goes, everybody, including Sensar, still has
dreams of Silicon Valley dollars dancing in their heads.
"We have a classic Silicon Valley entrepreneurial team," said Mr. Drury, who
is located in New Jersey, "and we consider an IPO as a definite exit
strategy."
We'll be watching.

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