In a national press release Monday, the Federal Bureau of Investigation (FBI) announced the rollout of its fully operational $1 billion Next Generation Identification (NGI) System, a futuristic and controversial biometric database that uses facial recognition to identify and track its targets.
The Bureau calls the system “a significant step forward for the criminal justice community,” but privacy advocates aren’t feeling quite as optimistic about NGI.
The day following the FBI’s press release, the American Civil Liberties Union and Electronic Frontier Foundation warned in a joint letter sent to Attorney General Eric Holder that NGI “has undergone a radical transformation” since its last Privacy Impact Assessment (PIA) completed six years ago, and now “raises serious privacy and civil liberty concerns.”
The groups argue that:
“The capacity of the FBI to collect and retain information, even on innocent Americans, has grown exponentially. It is essential for the American public to have a complete picture of all the programs and authorities the FBI uses to track our daily lives, and an understanding of how those programs affect our civil rights and civil liberties.”
Considering the NSA’s response to privacy concerns last year, it’s a bit difficult to imagine the FBI — a comparable organization — fully complying with such a request. Sure, we can expect a snippet of the program, but the “complete picture”? Don’t count on it.
What is NGI?
NGI is a massive biometric database that uses palm prints, iris scans, vocal data, and facial recognition for identification purposes.
In a sense, it’s the FBI’s personalized Google search engine, but instead of seeking out reviews on Yelp, its agents will be seeking out targets based on anything from decade-old scars to unique tattoos and markings.
The system builds off the FBI’s Integrated Automated Fingerprint Identification System (IAFIS), which already contains over 100 million individual records — approximately one-third of the American population — according to digital privacy expert Jennifer Lynch.
With 70 million subjects in its criminal master file and over 30 million civil fingerprints, IAFIS was already the single largest biometric database in the world, but with the added capabilities of NGI, it will become even more comprehensive.
Proponents of NGI argue that this was simply the logical next step for the identification database, but adding facial recognition to the mix certainly raises legitimate concerns.
The fear is not only that NGI will greatly expand on government data collection of both criminal and noncriminal individuals, but that it will also make it incredibly simple to locate and track Americans wherever they go.
In addition to maintaining a biometric database, the FBI is reportedly planning to use NGI in combination with America’s expansive network of CCTV cameras.
On one end, this system will undeniably make for more effective criminal investigations. On the other, it threatens our Fourth Amendment rights and further decreases any reasonable expectation of privacy we have left.
Increasingly Public
Fifty years ago, you could step out in the public domain with at least some expectation of privacy. Sure, the people around you could see what you were doing or hear what you were saying if they were close enough, but a stranger couldn’t find out who you were, where you lived, or whether or not you had any outstanding traffic tickets just by looking at your face.
Today, those expectations simply don’t exist. With the introduction of recent technologies such as GPS, cloud computing, and biometric identification, our lives have all become increasingly available to the public eye.
And while much of this dwindling privacy can be pinned on organizations such as the NSA and the FBI, we’re all partially to blame as well. We tirelessly post pictures of ourselves and our friends on social media, we give mobile apps permission to constantly track our location, and we even wear bracelets that record our heartbeats.
Whether or not you agree with this newfound culture of perpetual connection, there’s no denying this is the direction in which our society is moving. Advocacy groups continue to fight for digital privacy rights, but ultimately, very little can be done to halt technological progress.
NGI is just another step towards a society where the public domain truly is public domain. In the future, who you are, where you go, and what you do will all be recorded in digital form. In fact, we’re already halfway there — all you need to do is check your Facebook feed for confirmation.
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Big Data, Big Money
When it comes to biometrics, the best companies to invest in will undeniably be those managing the data and those collecting it.
As for collection, the FBI relies on a number of outside hardware products to make use of its identification systems and maintains a list of certified products that can be used in connection with the database.
In total, there are over 100 companies with products that have been tested and certified in compliance with NGI and IAFIS specifications. The vast majority of these companies don’t trade on the public market, but a select number do.
The list includes big-name defense firms such as Lockheed Martin (NYSE: LMT) and Northrop Grumman (NYSE: NOC), but also extends to mid- and small-cap sectors as well.
ImageWare Systems Inc. (OTYC: IWSY) and Aware Inc. (NASDAQ: AWRE) are better pure plays in the biometric space and are among the very small list of public companies with FBI-certified products.
Aware has 50 different certified pieces of hardware, primarily including fingerprint card printers and scanning systems. ImageWare has 11 products, also including fingerprint scanners and card readers.
In addition to providing hardware for collecting biometric data, both ImageWare and Aware also offer software for storing and managing that data.
For those looking to play the biometric market in regards to law enforcement and national defense, Aware is the only pure play on the market we’ve come across. The company operates in four related markets including Law Enforcement, Border Management, Credentials/Access Control, and Defense/Intelligence.
ImageWare, on the other hand, has wider breadth of focus. Like Aware, the company services law enforcement, but it has also diversified its portfolio into mobile payments, desktop security, and health care medication adherence.
According to Acuity Market Intelligence, the biometric market is expected to grow at a 19.69% annual growth rate for the next three years, reaching nearly $11 billion by 2017.
Fingerprint scanning is expected to dominate the market through this period, but iris and face recognition will represent more than 33% of global revenues.
Investors should look to companies advancing their biometric portfolios past fingerprint scans to experience the greatest level of growth.
Until next time,
Jason Stutman
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