The Battle for Your Biometric Data

Fingerprints and mugshots were once the purview of law enforcement and intelligence agencies to keep track of convicted criminals. Today we’ve become accustomed to retailers and technology firms seizing these biometric measures for their own purposes. Often, this is justified as enabling authorities to better protect us by tailoring services for our security. It’s time we paid closer attention to this creeping fog of biometric scanning and storage.

Mugshots for Marketers

Last week a micro-furore ensued when leading Australian retailers, including Bunnings, Kmart, JB Hi-Fi and The Good Guys, were discovered to be using facial recognition software to identify customers as they entered the stores. Predictably, these firms all claimed that the biometric data captured was used only to prevent crime and anti-social behaviour in their stores.

If you’re hearing alarm bells for potential commercial usage of this biometric data, history tells us we should trust our instincts. This sneaky practice of recording our personal data without consent raises a number of issues that won’t go away in the battle for our biometrics.

Explicit permission was not granted. Although some retailers install inconspicuous signs advising consumers their faces would be scanned, documented and stored, most of the businesses declare their privacy policies on their websites. No one is checking websites for these small disclaimers as they walk into a physical store.

The main issue is that to participate in modern society, opting out is rarely a viable option when interacting with the economy. In an era of mass permission-free surveillance in online and in-store retail, we lack two important things:

1. Clear regulatory guidelines and
2. A proclivity to protect biometrics, because their significance lies beyond their usage as a tool for security or marketing.

Biometric data will soon become the keys to our entire lives. Yet here they are floating around in who knows how many corporate servers.

A Password-less Future

One of the most daunting realities of the digital world is that we need to remember and manage a zillion passwords just to get through the day. While inventions like password managers help alleviate this plight – we need a better solution.

Enter biometrics.

At Apple’s recent developer conference, they announced password-less logins would be launched across their entire ecosystem later this year. As per some of their existing products, password-less logins will combine tools like facial recognition and touch ID for user authentication. It appears that traditional passwords will be replaced entirely by biometric scans in the long run.

No doubt this will create a more consumer-friendly and seamless experience. Hopefully, this will also make for a more secure internet experience, by using ‘human codes’ that are 100 per cent unique to the user.

This move pertains to the FIDO alliance –Fast IDentity Online. Formed in 2013, FIDO’s stated mission is to help develop and promote authentication standards that "help reduce the world’s over-reliance on passwords". FIDO supports a wide range of biometric authentication technologies, using fingerprint, iris scanner, voice, walking gait and facial recognition on top of existing solutions and communications standards.

Removing passwords from our lives won’t just reduce memory strain and prevent poor digital hygiene, it will open up many forms of utility and interoperability in our homes, travels and even energy markets, as the internet of things and digital twins come online.

Many large security-centric firms are part of the FIDO alliance, as well as nearly all of Big Tech – Apple, Amazon, Alphabet (Google), Microsoft and Samsung. Password-less infrastructure is the goal. Noticeably absent is the business with the worst reputation when it comes to digital security – Meta Platforms, owner of Facebook, Instagram and WhatsApp. If anything, it shows who values trust and desires a migration toward a more secure world. It’s easy to see where the corporate value system of Meta lies.

We are currently shifting to a more scrutinised corporate world. As money tightens and yield supersedes growth in times of uncertainty, it would make sense for trusted brands that more readily adapt to expected regulation to fetch a premium in their share prices similar to how digital growth firms once fetched a premium despite their lack of profitability (classic examples are ridesharing and BNPL for which the music has stopped).

The Biometric Contradiction

It’s clear we have a problem. While a password-less future is where we need to go, the personal biometric code tools we need to get there are being used in opposite directions. The same codes are being used as keys. These keys are being stored by a multitude of corporations, without our consent or knowledge, to unlock marketing opportunities and bespoke brand offers. As I write this I can hear the cries of “It doesn’t matter, because end-to-end encryption secures the biometric data used as logins!”

This is where we need to reflect carefully. Remember, not only is everything hackable, but drinking from the same river you’re polluting is never a good idea.

The End of Biometric Marketing

I predict biometric marketing will come to an abrupt end. It’ll go the same way that polluting rivers did, after the EPA was formed in the US in 1970 and the environmental movement gathered momentum around the world. Heavy industry had a good 25 years after World War II doing pretty much whatever they pleased in the pursuit of profit. Likewise, digital firms have surveilled us for over 25 years to get us to now. However, it is very clear that biodata being used as a marketing tool won’t make sense when it is the keys to a secure lifestyle.

What does this mean from an investing perspective? When assessing businesses for investment, we need to pay close attention to how their digital advantage is garnered. If harnessing our private data is their most important tool, then we need to consider whether those investments will survive the shift when biometrics go the way of tobacco advertising.