Biometrics Fuels Integrator Opportunity
State and local governments deploy the much-hyped technology to curb fraud
Biometrics, the branch of biology that singles out individuals using unique identifiers, such as fingerprints, is creating new opportunities for integrators as a roster of state and local governments seek to apply the science.
Illinois will shortly award a contract for a three-year pilot project to install an automatic fingerprint identification system. A contract for a three-year biometric pilot involving retinal scans started on May 20. Both efforts will initially focus on new applicants to the Aid to Families with Dependent Children program within select counties.
Six other states have recently contracted for biometric systems or have announced plans to do so. They are: California, Connecticut, Massachusetts, New Jersey, New York and Pennsylvania.
"Biometric systems are on the verge of taking the country by storm," said David Mintie, project coordinator for Digital Imaging, Connecticut Department of Social Services, which administers a biometric program under a three-year contract with National Registry Inc. valued at $5.1 million. The state expects to save $7.5 million annually by eliminating double-dipping and discouraging welfare recipients from cheating.
Biometrics fall into two categories. One consists of physiological characteristics, such as a retinal pattern or DNA. The second involves behavioral patterns, such as a person's voice, signature or even the way they type. Besides welfare and law enforcement applications, biometrics can help tighten network security and combat licensing and voting fraud. Biometrics also can verify the identity of a person conducting financial transactions, said Todd Lowe, vice president of identification systems and services for NRI, St. Petersburg, Fla., which supplies finger-imaging products.
Use of the technology in the state and local welfare arena is so new that market projections are unavailable. In law enforcement applications, the market is expected to grow from $89 million in 1995 to $157 million in 2000.
Biometrics is about to become a standard part of systems integration for state and local governments but integrators keen to participate in this market - particularly in the welfare arena - must partner with a company specializing in this area, said Jackie Fenn, research director of advanced technology with Gartner Group Inc., Stamford, Conn.
It's unlikely integrators will develop their own in-house capabilities because the technology is still evolving and they could become locked into an outdated product, said Fenn. There is a limited likelihood for acquisitions because of the same reason, said Fenn.
Still, some large corporations are exploring biometrics in-house. Dave McQueeney, a researcher who works in an IBM Corp. laboratory in Yorktown Heights, N.Y., said he has been involved in several biometric development projects using fingerprinting and voice recognition technology.
"We work with different groups throughout IBM, but government is probably one of the more fertile areas for adopting this technology," said McQueeney. One voice recognition application, being developed for law enforcement by IBM has been dubbed "flash," because of the speed with which it's able to identify individuals.
"States are typically very quick to copy ideas they learn from each other's experiences," said Rick Ferreira, manager of human services policy for Plano, Texas-based Electronic Data Systems, which was awarded a finger printing contract for Los Angeles County and four other California counties. However, it often takes a while for these projects to get off the ground, he said.
Reasons for such delays include high start-up costs and concerns voiced by civil libertarians, said Mintie.
The Connecticut legislature took four years to approve use of a biometric system. Ironically, a survey of Connecticut welfare clients found that almost 90 percent liked having a digital fingerprint imprinted on their welfare card.
In the law enforcement area, fingerprints have a clear advantage because of the large database of existing prints and because few criminals leave behind a scan of their eye or a voice print.
Printrak, which supplies automatic fingerprint identification system technology, has partnered with EDS to administer an AFIS for the five California county welfare systems. County governments can administer certain aspects of welfare programs on their own. Other areas, such as AFDC, are regulated by the state, and local governments must obtain waivers before using biometric systems.
Los Angeles County was the first in the nation to use biometrics for an application unrelated to law enforcement. The county's system became operational in June 1991, and until recently there have been few other implementations.
A study by Ernst & Young estimates that total savings over the life of the L.A. pilot project, due to end in September 1996, will be $86 million. The study puts total project costs at $23 million.
The project works more as a fraud deterrent than as a method of catching double-dipping. A random sampling of 137 people who left the California welfare rolls showed that 80 percent of them were committing welfare fraud. Companies that develop biometric systems are counting on integrator partnerships and heightened interest among state and local welfare installations for their growth, said Michele Walsh-Grisham, vice president of G2 Research Inc., a Mountain View, Calif., market research and consulting firm.
Biometric fingerprint systems have had a long history in the law enforcement market, but have had limited use elsewhere. Still, the technology must evolve further before it will be widely used commercially, said Steve Yeich, director of business development for Printrak International Inc., Anaheim, Calif.
Banks could install biometric systems in ATMs, for example, but on a cold day it would be hard to get a good print, he said. This is because current technology requires a controlled environment.
In the early 1990s, there was a lot of hype surrounding the use of biometrics, but the deployment of fingerprint systems in non-law enforcement applications seems to be taking hold, principally because of the fraud deterrence aspect, said Walsh-Grisham of G2. The fingerprints are scanned digitally.
But other systems will evolve over time. Governments want to see a level of accuracy and public acceptance that new technologies, such as retinal scans, have not yet demonstrated, said Lowe.
Retinal scans make people nervous because they must be correctly positioned to allow a beam of infrared light to enter their eye. Voice recognition is widely accepted, but it is not as accurate as fingerprints.
"The best biometrics are those that can't be altered," said Yeich. For example, people can't change their DNA, but if they're nervous, their voice could change and trigger a false reading.
"Clients don't have a problem with the technology because it's not intrusive and they are just as concerned as the general public about not being ripped off," said Ferreira.
State and local governments are learning that despite initial public outcries against biometric systems for welfare applicants, once people are educated about the benefits of biometrics, they embrace the system whole-heartedly.