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The Roundup: Biometrics Gaining Traction

Dec 12, 2001
By

David Aponovich






PINs and Passwords Aren't Enough
The financial services industry, under pressure from consumers to secure financial transactions and prevent identity theft, is poised to be a major player in the growth of biometrics, according to a report from Meridien Research.

Biometrics include a range of authorization technologies, including facial and voice recognition and fingerprint, retinal and palm scans.


Meridien, a financial technology analyst firm in Newton, Mass., says increased security concerns after the Sept. 11 attacks is leading to a "paradigm shift" in financial services that will speed up the use of facial recognition and other biometric technology. Early implementations are forecast for ATMs, standalone kiosks and inside brank branches, according to Meridien.

The report says biometrics have become increasingly attractive to financial institutions base don their improved accuracy, greater availability, and reduced price.

There are other incentives, including rising consumer fears and losses due to fraud. Also, consumers are coming to accept decreased privacy and increased intrusiveness if it ensures greater security. Also, the reduction of expenses related to fraud and security maintenance is expected to be more incentive for institutions to invest significantly in biometrics, Meridien says.

Business Wireless LANs Grow
Despite a downturn in tech spending, the business wireless LAN market grew over the first half of 2001 at a rate that exceeded expectations, according to a recent report from Cahners In-Stat Group of Scottsdale, Ariz.

Growth was helped along with strong sales to several vertical markets, including education, retail, financial and healthcare, along with the build-out of existing WLAN networks.

Though research is not yet complete, In-Stat said market performance in the second half of the year will be shaped by the early release of 802.11a products, the downturn following the September 11 attacks, the ability of IEEE 802.11g products to penetrate the market, and the acceptance of Windows XP as a necessary upgrade for businesses.

In-Stat also found:

  • Asia Pacific and Europe remained strong geographic segments in the first half of the year. North America grabbed the biggest share of the market. Hot geographies for WLAN growth included South Korea, Australia, New Zealand and Brazil.
  • Agere and Cisco battled for leadership in the WLAN Network Interface Card (NIC) market, with Agere leading the market in the first half of the year, accounting for 15% of units shipped and almost 14% of end-use sales. Linksys, D-Link, Netgear, SMC and other high-volume, low-cost vendors pushed out their WLAN wares aggressively through retail channels, online venues and catalogs, greatly spurring 802.11b sales to the small business space.
  • The overall WLAN market will grow from 3.3 million total units shipped in 2000 to 23.6 million total units shipped in 2005.

Retailers Learning from Past Web Woes
New research by Shop.org and The Boston Consulting Group finds that the online operations of many retailers are surprisingly effective this year, despite widespread holiday discounts and promotions.

A survey examining 63 retailers in several categories found that multichannel and Web-based retailers have learned from past marketing mistakes. Instead of offering steep discounts to attract customers, they're finding ways to offer the minimum discounts necessary to increase sales volume and to deliver targeted promotions to the more than 100 million consumers expected to use the Internet over the holiday season.

Links to Previous Roundups
The Roundup: E-Business Spending Turns Conservative

The Roundup: Holding Back on IT Services Spending

The Roundup: Pay Rising for Many IT Certifications

Peter Stanger, BCG vice president, said retailers are finding success focusing on multichannel customers - those who research and buy online and in stores or via catalogs. The online channel is a key way to reach these customers and get "a larger share of their wallets," he said. "Retailers who deliver merchandising and promotions through online and offline channels targeted at the biggest spenders in any given category will emerge as the winners this holiday season. On the other hand, an undifferentiated, heavily discounted offering will lead to low margins and losses."

Among other findings of the study:

  • Free shipping offers are paying dividends for e-retailers. The tactic is driving incremental sales without being big money losers, provided the free shipping includes conditions such as minimum order size. This year, 45% of retailers planned to offer that promotion this holiday season, 17% more than last year. Retailers report that consumers prefer free shipping to percentage discounts, even if the total amount saved is less.
  • Customer-acquisition costs in the third quarter were 40% lower than in the third quarter 2000, $12 compared to $20.
  • Retention costs declined by almost 50 percent since first quarter 2001, to $5 from $9.
  • The use of online media was at an all-time high, accounting for 78% of overall marketing spending, led by e-mail, the most cost effective vehicle to reach online consumers.
  • Catalogs were the only significant offline medium used to promote online offerings.


 

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