Biometrics Market in Singapore

 


A. Summary

 


This report covers the market potential for biometric technologies within the public, and to some extent private, environments in Singapore. It includes current trends, competitive issues, and market opportunities for U.S. firms.


 


The Singaporean economy stumbled following the SARS outbreak in 2003, but stability quickly followed.  In 2004, the “Year of Internationalization,” Singapore experienced 8.4% GDP growth.  In 2005, Singapore is still experiencing growth, but the government is cognizant of past problems that could instantly change the situation.  For example, another outbreak of a SARS like epidemic would probably result in lower investment levels and restrict spending.


 


Security products, however, have not been hit by Singapore’s recent economic fluctuations.  The September 11 attacks adversely impacted Singapore’s economy but the desire for security was and remains larger than ever.  Now security takes a huge precedent, and many institutions list it as their number one concern.  Corporations continue to receive many requests for new or updated security systems by government institutions, commercial firms, and even residential complexes.


 


To solve the on-going problem, the public and private sectors are beginning to see the need for biometric technology.  Some ports of entry, like the causeway entries at Woodland and Tuas, and Changi Airport, have already implemented systems that have improved accuracy and allowed people to clear immigration quickly.  Others, like PSA Singapore, realize the need for biometrics and are strongly considering implementation.  


 


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B. Market Highlights


 


At present, we believe that there are about ten types of biometric technology that are commonly used or currently in development.  They are fingerprint scanning, iris scanning, facial scanning, voice recognition, hand and/or finger recognition, retina scanning, thermo scanning, signature recognition, keystroke dynamic recognition, or DNA comparison. 


 


Currently in Singapore, public agencies have begun to implement biometric technology into their systems.  However, the market is far from saturated.  Government institutions across Singapore stress the need for increased security and look to biometric technology to replace or complement their security procedures. 


 


Based on preliminary survey results, basic fingerprint, facial, and hand/finger scanning seem to be the most appealing for Singaporeans.  Institutions with biometrics in place have tended to use the above mentioned.  Those looking to install a new or upgrade to a biometric security system have also mentioned these as their technologies of choice.  Some agencies, such as the Immigration and Checkpoints Authority, have even identified DNA comparison as the future of biometric security in Singapore.  So, while biometrics might not have made it into mainstream life just yet, it seems to be well on its way.


 


 


C. End-User Analysis


 


With the current spate of bomb blasts and terrorist attacks, the need for security is one of the key drivers for the widespread adoption of biometric technology in Asia.  Singapore is no exception.  In fact it is getting the thumbs-up from various government agencies and corporations.  Many of Singapore’s government agencies, as well as commercial firms, are interested in upgrading their security systems to feature biometrics.  Their classifications follow:


 


Government

 


Singapore Civil Defense Force (SCDF):  authentication of identity is especially important for the SCDF.  Drivers of vehicles carrying hazardous materials have their fingerprints verified when they report to checkpoints identified by SCDF.  At the checkpoints, the drivers’ particulars and biometrics are verified against the SCDF record.  Its director of public affairs, Lt-Col N. Subhas, said: “Fingerprints captured in the driver’s permit (that comes in the form of a smart card) can easily be authenticated by the enforcement officers using hand-held fingerprint scanning devices.”


 


Fingerprint scanning technology is also being deployed in the Building and Construction Authority (BCA).  BCA scans the fingerprints of foreign construction workers in their home countries and verifies the prints when the workers arrive in Singapore.  This process is conducted to ensure that workers who passed the skills test at overseas tests center are the same ones who subsequently come to Singapore to work.  According to the BCA, the application of biometric technology effectively “enhances the integrity of its skills certification system” and “provides a unique recognition of the workers’ identities while minimizing abuse”.


 


A similar biometric system was adopted at the Ministry of Manpower (MOM).  New identification cards for work-permit holders were launched in May 1999.  The MOM captures the workers’ fingerprints on the cards to reduce the likelihood of forgery.  


 


 


Customs/Ports of Entry

 


Currently, the largest amount of biometric activity in Singapore has been seen at the country’s ports of entry, notably Singapore’s Changi Airport.  In November 2004, the Civil Aviation Authority of Singapore (CAAS), along with Singapore Airlines (SIA) and the Immigration and Checkpoints Authority (ICA) launched the world’s first automated check-in and immigration clearance system.  This Fully Automated Seamless Travel system (FAST) combines the three stages of check-in into one:


           


1.    Airline check-in counter.  Passengers receive boarding passes, check luggage, and select their seats.


 


2.    Police check.  Passengers and their carry-on luggage are subjected to a brief security sweep.


 


3.    Immigration counter.  Passengers and their passports are verified.


 


In terms of convenience and safety, this process should prove to be revolutionary.  While the normal process can take up to fifteen minutes, the FAST lane ushers passengers through the terminal in less than two minutes.  FAST travelers receive a card imbedded with a microchip that contains all of their facial and fingerprint details.  Through a touch-screen monitor, passengers can easily complete and verify their credentials.  The trial ended June 30, 2005 and approximately 9,000 passengers participated in this exercise.  While the results of the trial are not yet available, it is widely believed FAST is just the first of many biometric expansions in Singapore.


 


The ICA has also implemented fingerprint biometrics on National Identity cards to help manage citizen flow.   While they have been mostly satisfied with their safety technology, the ICA admitted there could be improvements.  A faster system could be worth the price if accuracy is not compromised.  The ICA listed improving its previous fingerprint biometrics as its first preference.  However, they also showed interest in facial scanning, iris scanning, and DNA comparison.


 


The border linking Singapore to the Malaysian state of Johor has also implemented a more sophisticated form of security.  Iris scanning has been deployed to motorcyclists, with the intention to not only tighten security, but to also speed up the process of clearing immigration.  The ICA found the biometric system helped to clear cyclists an average of six seconds faster than before.  Previously, Singapore had tried smart cards with stored fingerprint data.  However, the process’ efficiency was compromised when it rained, and it also slowed down traffic when riders wore gloves.  


 


Singapore has also used its prime geographical location to its advantage.  On the tip of the Malaysia peninsula, Singapore’s maritime post connects many of the world’s largest shipping routes.  In total, terminals in Singapore handle about one-fifth of the world’s total container transshipment and 6% of the world’s total container shipments.  Safety in these areas is particularly sensitive.  For these areas, PSA Singapore uses conventional swipe cards, ID cards, and proximity cards.  Being realistic about commerce in a world after 9/11, PSA stressed they had already made additions to their security, such as enhanced access control checkpoints.  Asked if they would be interested in converting to a biometric system, PSA seemed extremely intrigued.  Price was less of a factor, with SGD 3 million (US.8 million) being a ballpark number for the installation of an entire system.  They also noted fingerprint, hand and/or finger, and facial recognition technology as their primary systems of choice. 


 


(Source


 


Military

 


The importance of strong and able-bodied armed forces is very important to Singapore.  Equally important is the ability to secure and maintain the workings of the Singapore Armed Forces (SAF). 


 


Defence Science & Technology Agency (DSTA)


 


The DSTA is responsible for developing and implementing defense technology used by the Singapore military.  They develop technology for land, sea, and air, as well as run many research and development facilities.  As their mission states, they have “a clear focus on the needs of [their] partner, the SAF.”  Equally as important is ensuring the safety of their products and services.  The DSTA realizes the need for heightened security, especially in a post-9/11 world.  They have introduced additional physical and cyber security measures, such as car screening and computer protection, and have also implemented smart card technology.  Eventhough they would be interested in upgrading to a more dependable and accurate biometric system, no such system is currently in place.  When asked, they ranked fingerprint, iris, facial, and hand and/or finger biometric technology as their most preferred.  The system would be used primarily for identification and securing encryption tokens.  The only obstacle preventing DSTA from purchasing a more sophisticated security system is the price.  They listed price as a “very important” factor in their decision, and would be looking to spend less than SDG 1 million (US0,000) to fully integrate a biometric system.  


 


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Commercial Firms and Learning Institution

 


Biometric technology has gained acceptance in private enterprises as well.  Chaks Cosmetic Design, a local company that specializes in the design and development of packaging for the personal care industry, installed X-Bio in 2002.  X-Bio is a fingerprint access system.  Prior to X-Bio, Chaks used a traditional card access system, where anyone picking up a lost card could easily gain access to its premises before loss of the card is reported.  A fingerprint access system (X-Bio), on the other hand, provides “a  higher level of security” and offers ease of use, said Ms. Carol Kandasamy, Chaks financial controller.


 


Mary Chia Beauty and Slimming Specialist uses fingerprint sensor access to grant authorized access to employees and to track employee attendance.


 


Cedar Girls’ Secondary School installed X-Bio fingerprint access units to prevent unauthorized entry to science and computer laboratories.  Also, acts such as forgetting to switch off air-conditioners are reduced.  “We are able to track who last used the room whenever there are problems,” said Ms. Susan Leong, the school’s principal.


 


Biometric product manufacturers have also answered the call for increased security by integrating fingerprint access systems with laptops.  Lenovo, Fujitsu, Hewlett-Packard and NEC now offer integrated biometric fingerprint readers in selected notebook PC models available for sale in Singapore.   


 


 


Residential Buildings

 


Biometric technology is also the future of apartments and condominiums in Singapore.  Because of a small land area, housing in Singapore is forced upwards instead of out.  This results in large apartment complexes across the island.  All of them need to ensure safety and privacy for their tenants.


 


One such complex has already implemented biometric technology.  As of October 2004, residents at The Light at Cairnhill have had the services of a fully functional fingerprint system.  Ms. Jacquelyn Wong of Wing Tai Property Management stressed the importance of biometrics as a way to offer convenience, while also securing the residents’ building from unwanted visitors.  “There is no need to worry about the keys being duplicated, or even being locked out of your apartment.”


 


To date though, The Light at Cairnhill is one of only a handful of biometrics-outfitted complexes.  In addition, mere fingerprint technology is already becoming outdated.  Customers have responded to surveys, confirming some expert’s opinions, that more sophisticated and accurate models are preferred.  Three-dimension models, such as a facial recognition system, would improve on the high rejection rate that currently accompanies common two-dimensional systems.  


 


(Source 6 Oct. 2004)


 


  Banking and Financial Services

 


Automated Teller Machines (ATM) using fingerprint recognition technology are gaining popularity around the world.  However, scanning fingerprints or irises to verify an ATM customer’s identity has yet to penetrate the Singapore banking market because of concerns about expense and privacy.  It is anticipated that once the customers are convinced that the technologies provide more benefit than the card-and-PIN system, then perhaps the market in Singapore will be open to this new technology.  


 


 


D. Best Sales Prospects


 


The heightened terror threat around the world has led to international concern for safety and security.  As a result, government agencies as well as local businesses are stepping up their efforts.  With the endorsement of government agencies and local organizations and the increasing integration of biometric applications into devices, Singapore’s biometric market looks set to continue its growth.  The prospective areas are in anyone’s imagination. 


 


At a recent conference on biometrics, Singapore’s Deputy Prime Minister and Home Affairs Minister Wong Kan Seng said that the Government was crafting “a set of standards” to beef up physical security at important buildings, though it is not clear when these systems might be in place.  Nevertheless, this is an area where it would offer tremendous opportunity to U.S. biometric suppliers.


 


The Singapore Government is also considering new measures requiring people using government e-services to log in by scanning their fingerprints or swiping a smart-card, as government agencies tighten up computer security amid growing concerns over identity theft.  Serene Tan of the the Infocomm Development Authority confirmed that some of the 1,600 e-government services currently available could feature added security measures in future.  However, she declined to say when these might be rolled out or how much they would cost.  It is also unclear whether users would have to pay for personal fingerprint or smart-card readers for their computers.   


 


One other area of future potential lies in the Integrated Resort (IR) projects.  An RFP is currently in progress for the Marina Bay location and the winner of the project will be known sometime mid 2006.  The IR will cover a range of entertainment activities and trade exhibition events, in addition to the casino gaming like those offered in Las Vegas.  Biometric control access would be a good solution to rid of undesirable people, for example, by using iris or full face recognition for personnel entry authentication criminal tracking.  Biometrics could also be deployed during the construction phase like those used at the Venetian Macau where a contactless smart card, typically kept in a hip pocket, calls up a stored biometric template which is then immediately validated by placement of the employee’s hand on the HandReader terminal.  Everyone entering the site, from employees to outside subcontractors and vendors, is required to use the HandReaders for access. 


 


 


E. Competitive Analysis


 


The largest factors in determining a buyer’s biometric preference is brand recognition, price, and innovative products.  Currently, many MNCs, or sub-divisions of MNCs, are active in the Singaporean biometrics market.  For example, NEC Solutions Asia Pacific Pte. Ltd. is a subsidiary of NEC Corporation of Japan.  They were awarded Singapore’s biometric passport project in early 2005 with a contract valued at close to US million.  By October 2006, every Singaporean will have facial and fingerprint identification incorporated into their passport.  “The issuance of the Singapore biometric passport,” said Tan Guong Ching, Permanent Secretary (Home Affairs), “will be a major milestone, not only in the history of the development of the Singapore passport, but also for the security of Singapore.”  Another corporation with regional headquarters in Singapore is Siemens Business Services Pte. Ltd.  Headquartered in Germany, Siemens Business Services leads a full-scale IT service provider capable of helping companies focused on biometrics.


 


Singapore does not, however, play host to many U.S. biometric companies.  One U.S. company that conducts business in Singapore is Identix Incorporated.  Based in Minnetonka, Minnesota and considered one of the market leaders, Identix provides multiple aspects of biometric technology.  In addition to fingerprint, facial, and skin biometrics, Identix also has a wide range of partners that can assist in targeting the government, law enforcement, gaming, finance, travel, transportation, corporate enterprise, and healthcare markets.  The company’s offerings include:


 


-          live scan systems and services for biometric data capture.


 


-          mobile systems for on-the-spot ID.


 


-          backend standards-based modules and software components for biometric matching and data mining.


 


As in other countries, the market for biometrics in Singapore has yet to fully mature.  Biometric technology has been pushed at Singapore’s Changi Airport, but it is still only in the developing stages.  Despite the implementation of iris scanning at the Singapore-Malaysia border and the completion of FAST’s trial, customers continue to want more.  In an International Air Transport Association (IATA) survey, eighty-one percent of respondents called for more use of biometrics at airports.  “The main benefit,” explained IATA spokesman Grant Wilkinson, “would be an increased fast track system through check-in … and increased level of security that would improve the safety of passengers.”  In the end, while price may be a large deterrent for companies and governments, customers are increasingly finding biometric technology to be a necessity. 


 


(Source: 22 Mar 2005)


 


F. Market Access


 


 Singapore is consistently regarded as one of the best places to start or grow a business.  Over 7,000 MNC are stationed in Singapore, and the city-state was ranked Asia/Pacific’s top business environment in 2003 by the Economist Intelligence Unit (EIU).  The U.S.-Singapore free trade agreement (USSFTA) has only helped trade matters.  To this day, the United States remains Singapore’s second largest trading partner, while Singapore ranks 15th on the U.S.’s list. 


 


Singapore is one of the world’s most open economies, and the completion of the USSFTA has only helped that claim.  Now more than ever, local and international companies are guaranteed secure and foreseeable transactions in Singapore.  A significant part of the USSFTA was Intellectual Property Right protection.  The Copyright Act helps ensure integrity and promote good business practices, and the U.S. Commercial Service at the American Embassy can help with additional problems.  Also, it is extremely easy for MNCs to invest and/or start a local office in Singapore.


 


Singapore’s infrastructure is world renowned, with ports of entry that constantly rank among the best.  Mass transportation is widespread and affordable, public works are first class, and telecommunication services are tremendous.  In addition, there are no duties, tariffs, or taxes on security products to Singapore.  For an American company to operate in the Singapore market, the following channels are normally used:


 


1.    A branch of the American firm or an associated company that are looking to establish a subsidiary in the region.


 


2.    A U.S. company representative stationed permanently in Singapore and whose responsibilities include supervising local distributors and/or agents, but with no direct responsible for obtaining orders and making sales. 


 


3.    Appointing a local firm as an agent.  The profile of an agent could range from a small security firm working on a small project basis, to a large system integrator representing a number of manufacturers in the biometric field.


 


4.    Conducting sales directly from the U.S. on an open market basis.  But this can only be successful if the U.S. products are already well recognized here.


 


 


Guidelines For Selecting an Agent or Distributor


 


An ideal way to sell U.S. products in Singapore is through a local agent or distributor.  By keeping their financial obligations to a minimum, U.S. companies are able to select one that has the company’s best interests in mind.  Not only are Singaporean agents fully aware of U.S. companies’ interests, but there is also no Singaporean legislation covering agency agreements.  As a result, companies and agents can come to their own terms and conditions.  Potential issues that should be addressed in a contract include:


 


·         Terms of contract


 


·         Payment terms


 


·         Sales targets and goals


 


·         Rule of law and the issue of jurisdiction in the U.S. and/or Singapore


 


·         Protection of intellectual property rights


 


·         Discussion of exclusivity and sales territories.  This can be especially important in Singapore, where many firms end up doing business in other Asian markets.


 


·         Dialogue restricting activity upon a contract’s commencement.


 


Guidelines to Improve Market Share


 


Distributors and end-users alike raised several issues that are often overlooked by U.S. companies in the region.  They include:


 


·         The importance of price.


 


·         Rebuffing the stigma that U.S. manufacturers are slow in responding to inquiries.


 


·         Demonstrating loyalty to the particular distributor.


 


·         Understanding that local agents have the option representing many foreign firms, not ones just from the U.S. provided there are no conflicts of interest.


 


·         Addressing the needs of the end user.  Examples include using the metric system, converting to the local voltage, etc.


 



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