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Businesses collect biometric customer data, leading to privacy concerns

Biometric technology developed for security purposes is being extended into new applications for CRM and BI. However, companies attempting to deploy biometric systems have recently come under fire for invading consumer privacy.

The Cahners In-Stat Group estimates the biometric technology market will grow more than 225 percent from 2000 levels to reach $520 million in 2005. This expanding market has inspired biometric innovations. For instance, Bioscrypt Inc., in conjunction with Indivos Corp., is developing the Pay By Touch fingerprint authentication-payment system for retailers that will let shoppers leave their wallets at home.

EyeTicket Corp. is testing its JetStream airline passenger processing technology at London's Heathrow Airport with Virgin Atlantic and British Airways. JetStream speeds up international arrivals by letting selected passengers bypass traditional passport checkpoints. A biometric system linked to a video camera identifies passengers by scanning their irises and matching the iris patterns to a database of travelers with advance clearance from U.K. customs officials.

The gambling industry is also avidly exploring biometric technology for CRM, BI, and security applications at casinos. Blake Cumbers, vice president of marketing and entertainment at Boyd Gaming Corp., recently obtained patents for his player tracking and identification system, which adds iris and facial scanning technology to slot machines, with prototypes planned for early 2002.

Cumbers said, "The idea is to ... sit down at the game, begin the scan, play, and from that point on, 100 percent of the players are tracked 100 percent of the time." He hopes to add to customer data collected through players' clubs, which only attract 30 percent of out-of-town casino visitors.

The system ties facial and retinal scans to a unique identification number, stores information on casino players, and tracks gaming transactions, letting casinos market to players based on their level of play. Casinos can send staff over to slot machines to collect even more guest data.

Cumbers believes his technology could be extended to other transactions. For example, a video scanning system could keep track of individual purchases at cafes and give repeat customers free beverages as part of a biometric loyalty program.

While businesses may be excited about biometric data collection opportunities, consumers are alarmed about potential privacy issues. The Sunday Herald recently reported on public criticism of U.K. Borders bookstores, which were planning to install Visionic Corp.'s SmartFace facial scanning systems. Known as FaceIt in U.S. markets, Visionic's system scans customers' faces as they enter stores, then compares the "digital facemaps" to a database of shoplifters. U.S. attempts to use Visionics technology have raised similar objections.

Gartner Inc. senior analyst Arabella Hallawell thinks biometric privacy regulation is a necessity. "New privacy laws that outline how biometric identity information will be used and protected will need to be introduced," Hallawell said.

The privacy backlash prompted the International Biometric Industry Association to issue voluntary privacy principles, such as not linking biometric data to personal information and developing stringent administration and technical controls to protect data. Visionics also supports biometric privacy regulations.

— David Butler

David Butler (djbutler@ix.netcom.com) covers technology issues from the Silicon Valley region.

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