Mobile Biometrics Identity Disrupted The Rise of True

Mobile Biometrics: Identity Disrupted The Rise of True Digital Identity C. Maxine Most Principal Acuity Market Intelligence Smart Card Alliance Member Meeting October 6, 2015

About Acuity Market Intelligence The Definitive Source for Biometrics Market Intelligence 2 • • • Strategic Research Consultancy Founded in 2001 Identity Focus: Mobile Biometrics, Automated Border Control, Secure Documents Consistently delivers thought-provoking, data-driven insight and analysis Proven record of accurately forecasting market trends Research Reports on Automated Border Control, National IDs, EPassports • NEW REPORT: The Global Biometrics and Mobility Report © 2015 Acuity Market Intelligence

Today’s Discussion: Mobile Biometrics Identity Disrupted: The Rise of True Digital Identity – Converging Market Forces – Acuity’s Uncharacteristically High Market Forecasts – Critical Elements of Market Disruption • • • Evolution of Digital Identity 3. 0 Rise of “Consumer Centricity” Mobile Commerce Disrupted Monetization Model Disrupted Identity Credentials Disrupted – Mobility Fuels Biometric Boom; Redefines Digital Identity GBMR_Report. php#sthash. Dwb. FYA 63. dpuf 3 © 2015 Acuity Market Intelligence

Converging Market Forces Mobility is the driving force that will unleash the long awaited biometric revolution! Need for Anonymous Identity Rise of Digital Money Smartphones as Defacto Authentication Device Smart Mobile Device Growth Alternate Payment Ecosystems Emergence of Cloud Based Identity Growth of Identity Theft & Fraud Social Media Influence on Commerce & Community Gl 1 obalization of E & M Commerce Frequency of Large Data Breeches Mainstreaming of Biometrics New Models of PII Management ©Acuity Market Intelligence 4 © 2015 Acuity Market Intelligence

Mobile Biometrics Annual Revenue $35 000 Mobile Biometric Revenue by Segment Annual Revenue ($ Millions) Devices, Transactions, Apps $30 000 $25 000 Millions of Dollars $21 708 $19 159 $20 000 $14 282 $15 000 $7 994 $10 000 $1 008 $5 000 $0 $1 527 2014 5 $3 077 $3 675 $4 432 $335 $6 473 $1 592 $7 629 Devices Transactions Apps 2015 2016 2017 2018 © 2015 Acuity Market Intelligence $3 576 $6 738 $7 573 $6 183 ©Acuity Market Intelligence 2019 2020

Forecast Period Revenue by Segment Total Forecast Period Market Revenue Exceeds $117 billion Mobile Biometrics Market Share by Segment Total Revenue 2014 - 2020 Devices 31, 5% Apps 58, 0% ©Acuity Market Intelligence 6 © 2015 Acuity Market Intelligence Transactions 10, 5%

Mobile Biometrics Devices Annual Units Mobile Biometric Devices Annual Unit (Millions) Smartphone, Tablet, 169, 66 Wearables 126, 01 3 000 Millions of Units 2 500 2 000 1 500 28, 53 243, 70 51, 09 323, 00 1 000 1 258, 96 1 409, 04 400, 60 87, 96 331, 80 199, 00 477, 72 441, 71 369, 30 1 586, 74 1 757, 38 1 949, 84 2 088, 81 2 276, 12 ©Acuity Market Intelligence 500 ©Acuity Market Intelligence 0 2014 7 237, 45 2016 Smartphones 2017 Tablets © 2015 Acuity Market Intelligence 2018 Wearables 2019 2020

Biometric vs. Non-Biometric Devices 3 000 Biometric vs. Non-Biometric Mobile Smart Devices Annual Units Market Share (Millions) Smartphones, Tablets, Wearables Millions of Devices 2 500 2 000 1 500 1 000 500 0 2014 ©Acuity Market Intelligence 2015 2016 Biometric Smart Devices 8 © 2015 Acuity Market Intelligence 2017 2018 2019 Non-Biometric Smart Devices 2020

Acuity’s Uncharacteristically High Forecasts 9 Acuity 2020 Global Mobile Biometrics Market $34. 6 Billion 6 Wresearch 2020 Global Biometrics Market $21. 9 Billion Market and Markets 2020 Next Generation Biometrics Market $24. 5 Billion BCC Research 2019 Global Market For Biometric Technologies $27. 5 billion BIS 2020 Global Biometric Market $25. 31 Billion Tractica 2024 Worldwide Biometrics Technology Market $14. 9 Billion Tractica 2024 Mobile Biometric Device And Software Revenue $3. 5 Billion Acuity 2020 Biometric Smart Mobile Device Shipped Annually 3 Billion Tractica 2024 Fingerprint Readers In Mobile Devices Shipped Annually 1 Billion Acuity 2020 Smart Mobile Device With Embedded Biometrics 100% Tractica 2024 Smartphone And Tablets With Fingerprint Readers 34% Acuity 2020 Wearable Biometric Devices Installed Base 410 Million Goode Intelligence 2020 Wearable Biometrics Devices Accessing Banking Services 160 Million Acuity 2020 Mobile Biometrics Apps Downloaded Annually 5. 5 Billion Goode Intelligence 2020 Mobile Banking App Downloads 620 Million Acuity 2019 Mobile Biometrics Apps Downloaded Annually 3. 7 Billion Juniper Research 2019 Biometric Authentication Application Downloads Annually 770 million © 2015 Acuity Market Intelligence

Acuity’s Uncharacteristically High Forecasts • Acuity sees MASSIVE Market Opportunity & Scope • DISRUPTION on Multiple Fronts: – Transformation and Convergence of Commerce and Privacy Driving Consumer Control of Identity and PII. How will consumers use mobile devices to navigate complex, interconnected global ecosystems expecting frictionless access to information, communities, goods and services while their privacy is protected and their PII secured? – Consumer Centric Data Aggregation Ecosystems Transfer Data Ownership from the Enterprise to the Individual. How will enterprises that rely on the monetization of PII - accumulation, management, use, and sale - evolve or be displaced as a massive global platform based on personal mobile devices disrupts conventional business models? – Identity Credentials Merge with Mobile Devices. How will “Identity Tokens” and associated security features translate as they become digital identity credentials merged with mobile devices? 10 © 2015 Acuity Market Intelligence

Critical Elements of Market Disruption • Evolution of Digital Identity • Rise of “Consumer Centricity” • Mobile Commerce Disrupted • Monetization Model Disrupted • Identity Credentials Disrupted 11 © 2015 Acuity Market Intelligence Identity 3. 0

Evolution of Digital Identity 1. 0 Identity 2. 0 Identity 3. 0 • Centralized site-centric • Privacy of the identity limited by privacy of the site Users • Comprised of characteristics or data attributes: • Decentralized user-centric • Emphasis on simple and open method of identifying transactions • An ID that is transparent and flexible across Internet • Can be Social Media based • Sign in with Facebook, Google Plus, Disqus, etc. • Key areas of concern security & privacy • “Next Gen” digital Identity • Combines strong authentication (BIOMETRICS) with anonymity • Increases privacy and provides user-centric control over PII • Creates secure, consumer centric ecosystem for commerce - Username and password - Online search activities - Date of birth - Social security number - Medical history • Key areas of concern security & privacy 12 Identity 3. 0 © 2015 Acuity Market Intelligence

Rise of “Consumer Centricity” + Consumer Centric Identity 13 = Consumer Centric Data Ownership/Privacy

Mobile Commerce 1. 0 Payment Processing Issuing Bank Merchant Processor Card Issuer Processor 14

Mobile Commerce 1. 5 Payment Processing Issuing Bank Merchant Processor Card Issuer Processor 15

Mobile Commerce 2. 0 Biometric Identity Service Provider 16 Payment Processing Issuing Bank Retailer POS Merchant Processor Card Issuer Processor © 2015 Acuity Market Intelligence ©Acuity Market Intelligence Card Association

Mobile Commerce 2. 0 Biometric Identity Service Provider 17 Payment Processing Issuing Bank Retailer POS Merchant Processor Card Issuer Processor © 2015 Acuity Market Intelligence ©Acuity Market Intelligence Card Association

Mobile Commerce “Disrupted” ? Direct From Bank Credit on Demand Biometric Identity Service Provider

Monetization Model $$$$ ©Acuity Market Intelligence 19 © 2015 Acuity Market Intelligence

Monetization Model Identity 3. 0 $$$$ ©Acuity Market Intelligence 20 © 2015 Acuity Market

Monetization Model Disrupted ©Acuity Market Intelligence 21 $$$$ © 2015 Acuity Market Intelligence

Identity Credentials ©Acuity Market Intelligence 22 © 2015 Acuity Market Intelligence

Smarter Credentials ©Acuity Market Intelligence 23 © 2015 Acuity Market Intelligence

Identity Credentials Transformed ©Acuity Market Intelligence 24 © 2015 Acuity Market Intelligence

Identity Credentials Disrupted ©Acuity Market Intelligence 25 © 2015 Acuity Market Intelligence

Mobility Fuels Biometric Boom; Redefines Digital Identity • Global biometrics market poised to explode - “ticket to ride”. – Pace of market development accelerating as previously unrealized biometric opportunities coalesce around rapid expansion of mobile consumer applications. • Biometrics being “seized” to reduce user friction & simplify user experience. – Facilitate more interaction, communication, engagement, comfort, security, and ultimately more information access and digital transactions - the “holy grail of mobility”. • • Biometrics have the potential to disrupt global commerce, fundamentally shift power and control of consumer PII away from “monetization” enterprises, and transform Identity Credentials. Turf over which major consumer technology companies – hardware and software, device, and services – will fight with established banks, CC companies, payment processors, retailers, etc plus emerging start-ups. – ALL seek to PROFIT off changing the way we interact, conduct business, and prove our Identity. • Not clear how market development will play out, who win and lose, and how ecosystems will transform. – HOWEVER, NO QUESTION “invisible integration” of biometrics is critical this transformation. – Biometrics will facilitate trusted, reliable, free flowing global commerce while offering consumers increased privacy and PII protection. 26 © 2015 Acuity Market Intelligence

Thank You! Visit www. acuity-mi. com for more insight and analysis. Contact me @: cmaxmost@acuity-mi. com +1 720 530 5836 Available NOW: Global Biometrics Industry Report Coming SOON: Biometric Mobility and the Enterprise 27 © 2015 Acuity Market Intelligence