Global trends have certainly affected the banking, financial services, and insurance (BFSI) market related to biometric hardware. Geopolitical and macroeconomic events, including the conflict in Ukraine, the shortage in semiconductor supply, and downturns in supply chains, have resulted in turbulent market dynamics over the last few years.
ABI Research estimates that the overall worldwide biometric device shipments fell from 4.1 million in 2019 to 3.4 million in 2021 and recovered slightly to 3.6 million in 2022.
With a CAGR of 11.3%, fingerprint recognition will expand from 1.7 million to 2.9 million shipments in 2022 and 2027 to claim the lion’s share of the biometric modalities market. However, due to simplicity and the expanding use of liveness detection, facial recognition biometrics will experience the fastest growth over the same period, with a CAGR of 11.9%,” said Sam Gazeley, digital payment technologies analyst at ABI Research.
He went on to explain that in terms of biometric hardware technology shipment share, ID/Authentication will account for 64% of the BFSI market in 2023.
“This is partly because, aside from smartphone-centric biometric technologies, user registration and authentication are the key use cases for biometrics in the BFSI sector,” he added.
Getting worst before it gets better
Exacerbated by the increasing integration of biometrics in mobile banking apps and with more customers turning to mobile banking apps, several BFSI businesses are including biometric authentication methods like fingerprint and facial recognition in their solutions.
While this applies predominantly to the smartphone industry, the BFSI market’s growing use of biometrics will encourage the deployment of biometric hardware in branches.
“The customer experience as it relates to the client authentication processes is being streamlined by deploying biometrics such as fingerprint and facial recognition, which improves the entire experience with BFSI services and combating fraud by eliminating the need for passwords,” explained Gazeley.
However, it is also important to remember that branchless banking is growing in popularity and will limit the accessible market for biometric hardware providers as we enter the forecast period, particularly regarding neo and challenger banks.