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Perspectiva Global 2016: Tendencias del Mercado de

Seguridad de IT

Marc Einstein, Director Transformación Digital, Frost &

Sullivan

2

June 2016

Marc Einstein

ICT Practice, Frost & Sullivan

Public Safety &

Biometrics Market Outlook

NEC Business Forum Colombia

2016

Today’s Agenda

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Introduction

Public Safety Market Overview

Biometrics Market Overview

Biometric Technology Update

Use Cases

Implications for Colombia

Conclusions

Key Trends for Public Safety in 2016

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Global Biometrics Market Revenue Growth

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The global market for biometrics hardware and software is increasingly due to lower

costs, higher performance and the increasing need for security. In 2015 the global

market for biometrics with worth US$15bn and will increase significantly by 2020 to

US$35bn.

Global Biometrics Market, 2015-2020 (US$m)

4,725 5,521 6,452 7,539 8,810 10,295 3,300

3,631 3,996

4,397 4,839

5,325

3,900 4,830

5,981

7,407

9,173

11,360

1,050

1,265

1,523

1,835

2,210

2,663

1,200

1,443

1,735

2,087

2,509

3,018

825

1,056

1,353

1,732

2,218

2,840

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2015 2016 2017 2018 2019 2020

North America Europe Asia-Pacific Latin America Middle East Africa

2015-2020

CAGR (%) North America

21.5%

Europe

12.7%

Asia Pacific

30.6%

Latin America

26.2%

Middle East

25.9%

Africa

36.2%

Biometrics Market Adoption by Technology & Industry

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In terms of technology fingerprint scanning is still the most popular technology in

the industry in use in the market today although facial and voice recognition are

becoming mature. Government, military and border control are the most common

vertical deployments.

2015 Biometrics Market by Technology

Hand 1%

Signature 3% Other

5% Vein 6%

Iris 14%

Voice 15%

Face 20%

Fingerprint 36%

Government 31%

Military & Border Control

23%

Corporate Security

17%

IT & Telco 8%

Banking & Finance

9%

Healthcare 8%

Others 4%

2015 Biometrics Market by Industry

Biometrics Technology Comparison

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Fingerprint and Facial Recognition are the most cost effective solutions .

Technology Security Accuracy Price Speed Device size

Vein-pattern Small-med

Fingerprint Small-med

Palm-pattern Small-med

Iris Large

Facial Small-med

High

Low

Medium-

high

Medium

Low-

medium

2015 Biometrics Technology Comparison

NEC Biometrics Market Leadership

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NEC has consistently ranked the highest in the US National Institute of Standards

Technology test for facial recognition in 2014 and for fingerprint recognition in 2015.

Frost & Sullivan believes that with 200 bimodal deployments worldwide NEC is the

global leader in biometrics technology.

The Future of Biometrics: IoT

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New wireless technologies such as SigFox and Lora are offering new possibilities

for smart cities.

Wireless Technologies Enabling the Smart City

Smart Garbage Can = -40% TCO

New wireless companies

such as SigFox and Lora

are offering very wide

coverage areas (10mi) for

low bandwidth transmission

and low power

consumption at a low cost.

Common use cases include

agriculture, smart buildings,

healthcare, smart home,

utilities and emergency &

security services.

Much of Western Europe is

covered already & the city

of San Francisco runs its

own open platform in order

to encourage use and

innovation.

The Future of Biometrics: IoT

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Faced with declining population, rising costs & health concerns IoT is quickly gaining ground in

agriculture and some interesting use cases have emerged in Japan.

Connected Cow Facially Recognized Cow Japan has developed a

“connected cow” IoT service

which monitors the birthing

cycle of cows.

There are now over 50,000

“connected cows” and in one

case the average income of the

cow increased by US$740.

Facial recognition technology is

being used even with animals in

Japan and are able to quickly

recognize lameness in cows.

Facial recognition technology

has an excellent ROI as the

cost of the software is US$10

per cow vs. US$241 for an

untreated sick animal.

The Future of Biometrics: Blockchain

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Industry Company Business Activities

Bitproof uses the blockchain to verify

and timestamp legal documents

eliminating the need for notary services.

Bitproof has partnered with US

universities to verify diplomas.

Everledger uses blockchain to track

individual diamonds from the mine to its

current owner and verifies authenticity to

insurers, owners and law enforcement.

Global diamond fraud is over US$600m

per year.

Provenance stores all supply chain

information for retail products into a

shared ledger and allows consumers to

access this information in real time.

Legal

Diamond

Insurance

Retail

Biometrics for the Private Sector: SoftBank Pepper

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The Pepper robot is now

working in the Yurakucho

branch of Bic Camera and has

facial recognition capability.

Pepper is able to identify

customers, answer questions

and engage in casual

conversation with customers.

Nestle Corporation has

purchased 1,000 Pepper robots

to sell coffee machines across

Japan.

Pepper is also currently serving

as a customer service

representative in many

SoftBank mobile stores.

SoftBank is already being used in stores to replace sales representatives and uses facial

recognition.

Human In Store Worker Cost:

US$10 x 8 hours/day x 30 days =

US$2,400 per month

Pepper In Store Worker Cost:

Robot fee US$ 1,980 + US$ 246 per month =

US$2,226 in the 1st month

Biometrics for the Private Sector: Universal Studios Japan

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Universal Studios Japan in

Osaka is the fifth-largest

amusement park in the world

with roughly 12m visitors per

year.

Annual pass holders are

identified by looking at a

monitor at the entrance gate.

The identification process less

than one second.

Image matching method

identifies the position, shape

and color of eyes, and position

and shape of nose.

Guaranteed high-speed and

accuracy despite the slight

changes in appearance, such

as the hairstyle or glasses.

Facial recognition technology reduced guest management OPEX by 30%.

Biometrics for Public Safety – John F. Kennedy Airport

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John F. Kennedy Airport in New

York City is the largest airport

for international travellers in the

USA (30m in 2015) and has the

longest average waiting time.

The system matches an image

of the traveller taken at the

customs against the image

stored on e-passport chip, while

at the same time verifying the

passport details.

The system will make it harder

to counterfeit a passport and

protect legitimate travellers from

fraud and identity theft.

New York-JFK airport started using NEC’s facial recognition technology in 2016.

Biometrics for Public Safety – Brazil, Nationwide

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Tax evasion is a serious

problem in Brazil with

losses of US$280bn in

2015.

In response in 2015 the

Brazilian National Tax

Collection Agency selected

NEC to provide NeoFace

Watch system to 14 airports

across the country.

NEC delivered facial

recognition systems that

consist of facial recognition,

CCTV cameras, servers

and network infrastructure,

as well as integration

services for existing

systems..

NEC was selected to provide facial recognition technology for 14 international

airports in Brazil.

Belo Horizonte – Minas Gerais

Brasília – Distrito Federal

Campinas – Sao Paulo

Curitiba – Parana

Florianópolis – Santa Catarina

Fortaleza – Ceará

Manaus – Amazonas

Natal – Rio Grande do Norte

Porto Alegre – Rio Grande do

Sul

Recife – Pernambuco

Rio de Janeiro – Rio de Janeiro

Salvador – Bahia

Guarulhos – Sao Paulo

Foz do Iguacu – Parana

Biometrics for Public Safety – Tigre, Argentina

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Tigre, Argentina is a city of

400,000 people 32km north

of Argentina.

In 2013 the local

government contracted

NEC to provide a Public

Safety system consisting of

1000 security cameras and

associated software.

The system uses facial and

behavioural recognition to

identify criminals & missing

persons in real time and

also to identify suspicious

behavior.

Automobile theft in the city

has fallen by 40% since the

implementation of the

system.

NEC was selected to provide facial recognition technology for 14 international

airports in Brazil.

Biometrics for Public Safety – Medellin, Colombia

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The Estadio Atanasio

Girardot is the third largest

stadium in Colombia with a

capacity of 45,000 people.

In 2016 the Secretaria de

Seguridad en Medellín

contracted NEC to provide

a safe stadium solution.

The solution consists of 170

surveillance cameras, a

control room and facial

recognition technology.

The system will be able to

initially track 200,000

visitors and will be used to

prevent violent behavior

during football matches.

The system is being

expanded across Colombia.

The city of Medellin, Colombia has deployed a Safe Stadium project with NEC.

Biometrics for Public Safety – Okayama, Japan

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Telephone scams targeting

the elderly are a serious

social problem in Japan, with

losses reaching nearly

US$600m annually.

To cope with the problem

mobile operator NTT

DoCoMo is using a voice

recognition/artificial

intelligence service to solve

the problem.

They have deployed an opt –

in system where family

members are notified when a

scam phonecall is detected.

The detection accuracy rate

is over 90% and the number

of fraudulent calls has fallen

by 75%.

In Japan voice recognition and artificial intelligence are being used to combat

telephone fraud.

In 2014, damages from telephone fraud in Japan

amounted to a total value of US$563m

80% of victims are people over 65 years old

Conclusions & Implications for Colombia

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Biometric Technology is a critical part of public safety systems and as such the market is growing rapidly

Facial recognition & fingerprint recognition are the two most mature and growing technologies

NEC is the global leader in biometric technology for public applications

Biometric use will expand significantly with new technologies like IoT and Blockchain

Colombia has significant potential use for biometric technology for smart cities, smart stadiums, smart government and private sector applications.

Muchisimas Gracias

June 2016