We may not be unlocking top-secret vaults with retinal scans just yet, but many of us are already using our fingerprints or faces to access our smartphones. As biometric systems become more sophisticated and widespread, their applications are expanding rapidly. The global biometrics market is expected to grow by 20.4% annually (CAGR) over the next five years. For investors looking to capitalize on this trend, we’ve put together a guide covering the top biometrics stocks, ranked by pure-play focus.
The main growth driver behind the biometrics market is the rising need for flexible and robust security. Biometrics is a natural fit for mission-critical environments like government and law enforcement. But it’s also seeing strong adoption in commercial sectors like financial services and healthcare. Organizations are turning to biometric to combat fraud, protect sensitive data, and streamline identity verification processes. The rise of mobile biometrics, especially in smartphones, has also played a crucial role in familiarizing consumers with this technology and paving the way for wider adoption.
Another factor fueling the biometrics boom is the ongoing digital transformation across industries. As more services move online, the demand for secure and convenient authentication has blossomed. Biometric systems offer a promising solution, providing a higher level of security than traditional passwords while also improving user experience. Also, as new technologies like quantum computing emerge, digital security will be at the forefront of public concern.
However, the biometrics industry still faces some significant hurdles. Privacy remains a major concern, with many people worried about the collection of sensitive biological data. There’s also the challenge of accuracy and reliability. Biometrics is especially challenging in real-world conditions where factors like lighting, aging, or injuries can affect biometric readings.
Note: We make every effort to keep our info accurate and up-to-date. However, emerging tech moves fast and company situations can change overnight. This guide is an intro to the biometrics market; but ultimately, do your own due diligence before taking action.
Tier 1: Pure-Play Biometrics Stocks
These companies are laser-focused on biometric technology, making them potentially high-growth but also higher-risk biometrics stocks. Their success is closely tied to the adoption of specific biometric modalities like fingerprint or facial recognition. Note that many of these companies are traded on foreign exchanges (such as Nasdaq Oslo), but do have American Depository Receipts (ADRs).
IDEX Biometrics (IDEX)
IDEX Biometrics ASA (IDEX) specializes in off-chip fingerprint sensors for smart cards, targeting the biometric payment card market.
IDEX Biometrics specializes in off-chip capacitive fingerprint sensors and biometric solutions for smart cards. This gives IDEX a unique niche in the growing biometric payment card market. The company’s technology enables secure, convenient fingerprint authentication on battery-less payment cards. IDEX has partnerships with major card manufacturers and payment networks such as Mastercard, IDEMIA, and Infineon.
The off-chip sensor design is key to IDEX’s technology. This approach separates the sensor array from the processing circuitry. In plain English, it basically allows for a larger sensor area and more flexibility in card integration. The design also reduces costs compared to traditional sensors, as it requires less silicon. This is pivotal for the mass adoption of biometric payment cards, where cost is a significant factor.
IDEX has seen increasing commercial traction of biometric payment cards using its technology. Early customers include banks such as Eastern Bank Ltd (EBL) in Bangladesh and DenizBank in Turkey. While the biometric payment card market is still emerging, it represents a large potential global market. IDEX is also expanding into access control and cryptocurrency storage.
NEXT Biometrics (NXTBS)
NEXT Biometrics ASA (NXTBS) makes active thermal fingerprint sensors that work in tough conditions, suitable for high-security use.
NEXT Biometrics makes proprietary active thermal sensing technology for fingerprint sensors. This technology offers advantages in challenging environmental conditions and enables larger area sensors at competitive costs. NEXT’s focus on larger FAP20 sensors positions it for high-security applications in government, fintech, and access control markets.
The active thermal sensing technology works by detecting tiny temperature differences between the ridges and valleys of a fingerprint. As a result, these sensors are less affected by dirt, oil, or moisture on the finger, making them more reliable in real-world conditions. The technology also allows for larger sensors without significantly increasing costs. This gives NEXT a competitive advantage in use cases requiring higher security and more fingerprint data.
NEXT Biometrics is seeing increasing traction in large, growing biometrics markets like India and China. In India, NEXT has secured contracts valued at NOK 300 million over 2-5 years, largely related to the Aadhaar program. In China, the company recently obtained the ChinaID certificate, opening up opportunities in banking and healthcare. NEXT is transitioning from a turnaround phase to a growth phase, with the company targeting a positive result for 2024 in total.
Precise Biometrics (PREC)
Precise Biometrics AB (PREC) offers fingerprint software used by major sensor makers, expanding into facial and palm recognition.
Precise Biometrics offers fingerprint software and end-user biometric access solutions. The company’s core technology is its algorithm products for fingerprint matching. These algorithms are used by major sensor manufacturers, such as Qualcomm and EgisTec, to turn raw sensor inputs into usable biometric data.
Precise Biometrics’ software expertise allows it to adapt to different sensor technologies and biometric modalities. The company has recently expanded beyond fingerprint algorithms to facial and palm recognition. This flexibility is valuable as the biometrics market evolves, allowing Precise to address new applications and security requirements.
Precise Biometrics is seeing strong growth in its Digital Identity business, which provides biometric access control and visitor management systems. The company has partnered with Flowscape Technology to expand its reach with this business. Precise’s dual focus on licensing biometric algorithms and providing end-user solutions gives it two important avenues for growth.
Fingerprint Cards (FING-B
Fingerprint Cards AB (FING-B) focuses on capacitive fingerprint sensors for mobile devices and PCs, expanding into areas like payments.
Fingerprint Cards focuses on fingerprint sensors for mobile devices, PCs, and access control. The company’s technology is used over 100,000 times per second globally. Fingerprint specializes in “capacitive fingerprint sensors.” These offer a unique combination of accuracy, reliability, and cost-effectiveness for biometric authentication.
Capacitive sensors use an array of tiny plates to detect the ridges and valleys of a fingerprint by measuring tiny electrical differences. This allows for high-resolution imaging without optical components, making the sensors more compact. These sensors are also resistant to many forms of spoofing. They also work well in different lighting conditions and can be made thin enough for smartphones and laptops.
The company is expanding beyond mobile into new verticals like PCs, access control, and payments. Its sensors are now used by 4 of the top 5 Windows PC manufacturers. While facing near-term headwinds from the mobile market slowdown, Fingerprint Cards is focused on diversification, cost reduction, and R&D to drive future growth. The company’s over 700 patents provides a solid IP moat as biometric adoption increases across industries.
Tier 2: Integrated Biometrics and Identity Solutions
These biometrics stocks offer a broader range of products and services, often combining biometrics with other security and identity management tools. This can provide more stability but may also mean slower growth compared to pure-play companies. On the flipside, some of these companies do have an argument for bumping up into the pure-play tier, depending on how you define the market. Nevertheless, the difference between Tier 1 and Tier 2 in biometrics focus is quite small.
Aware, Inc. (AWRE)
Aware Inc. (AWRE) provides end-to-end biometric software, specializing in configurable and multi-modal solutions.
Aware is a global provider of end-to-end biometric software solutions. The company specializes in configurable solutions that can be deployed on-premises or in the cloud. This flexibility allows Aware to address a wide range of use cases in both government and commercial sectors. The company’s core offerings also work across various modalities, like face, fingerprint, and iris.
Multi-modal biometrics is important because it significantly enhances security and accuracy. Combining several biometric traits (e.g., face, fingerprint, iris) reduces false acceptance and rejection rates. In practice, it makes it much harder for fraudsters to spoof identities. Multi-modal biometrics provide stronger authentication, crucial for sectors like finance, healthcare, and government.
Aware is now focusing on growth areas such as mobile biometrics, anti-spoofing, and biometric fusion to combine modalities. These initiatives target the market’s growing demand for reliable remote ID verification. Aware is able to address both government needs (e.g., border control, law enforcement) and commercial needs (e.g., financial services, healthcare). This gives the company many avenues for growth alongside the expanding use of biometrics across industries.
BIO-key International (BKYI)
BIO-key International (BKYI) offers IAM with patented biometrics technology that doesn’t need smartphones or tokens.
BIO-key provides identity and access management (IAM), with a focus on biometric authentication. The company’s flagship PortalGuard is an IAM platform that handles multi-factor authentication, single sign-on, and identity management. The company’s key differentiator is its patented “Identity Bound Biometrics” technology. This technology streamlines authentication without the need of smartphones or hardware tokens.
BIO-key’s approach to biometrics is especially valuable in environments where personal devices are restricted or hardware token deployment is cost-prohibitive. Their solutions are attractive in sectors where security and user convenience are both critical. In healthcare or education, for example, biometrics solutions cannot be overly complex. Otherwise, they would interfere too much with day-to-day operations.
By offering a more flexible and cost-effective alternative to traditional multi-factor authentication, BIO-key is driving adoption of biometrics across a broad range of use cases. The company aims to replace legacy authentication systems and expand biometric use beyond initial login to enable continuous authentication.
Mitek Systems (MITK)
Mitek Systems, Inc. (MITK) specializes in digital identity verification and mobile capture technologies using AI for fraud prevention.
Mitek Systems specializes in digital identity verification and mobile capture technologies. As a biometrics stock, the company has two relevant core products. The first is Mobile Verify for identity document authentication and facial comparison. The second is Mobile Deposit for mobile check deposit. These solutions both use AI and machine learning to automate ID verification and biometric matching.
Mitek addresses the trend of digital transformation in finance, healthcare, and online marketplaces. By enabling remote ID verification during account opening or high-risk transactions, Mitek helps companies expand their digital channels while managing fraud risk and regulatory compliance. The company’s key selling point is its ability to detect fraud while maintaining a smooth user experience.
As businesses increasingly shift to digital channels, Mitek is well-positioned for growth. By continually enhancing its AI and machine learning capabilities, Mitek aims to stay ahead in the identity verification market, addressing evolving fraud threats and regulatory requirements across various industries.
Tier 3: Interface Firms with Biometrics Solutions
These companies are not necessarily pure biometrics stocks, but biometrics is or could become a significant part of their business. Compared to the biometrics stocks in Tier 1 or 2, these companies may offer slightly more diversified portfolios.
Synaptics Incorporated (SYNA)
Synaptics Incorporated (SYNA) focuses on interfaces and fingerprint sensors for consumer electronics and IoT devices.
Synaptics has established itself in the biometrics industry through its focus on human interface solutions, particularly in touch and display technologies. The company’s biometric offerings include fingerprint sensors that have found use in smartphones, laptops, and other consumer electronics. Synaptics has invested significantly in research and development to enhance the accuracy and security of its fingerprint recognition technology, addressing growing concerns about data protection and user authentication.
The company’s expansion into Internet of Things (IoT) applications has opened new avenues for its biometric solutions. By integrating its fingerprint sensors into smart home devices, automotive systems, and wearable technology, Synaptics has positioned itself to capitalize on the increasing demand for secure, personalized user experiences across various connected devices.
Intellicheck Inc. (IDN)
Intellicheck Inc. (IDN) specializes in identity authentication and validation, focusing on mobile ID verification for fraud prevention.
Intellicheck specializes in identity authentication and validation solutions, with a particular focus on ID verification technology. The company’s products are designed to prevent identity theft and fraud by quickly and accurately authenticating government-issued IDs. This technology has found applications in various sectors, including retail, financial services, and law enforcement, where rapid and reliable identity verification is crucial.
Intellicheck’s emphasis on mobile solutions has allowed it to adapt to changing market needs, especially as businesses increasingly rely on digital transactions. The company’s ability to provide real-time ID authentication through mobile devices has made its technology particularly valuable for retailers looking to prevent fraud in both online and in-store purchases. This focus on mobile-based solutions also aligns with broader trends in consumer behavior and business operations, potentially positioning Intellicheck to benefit from the ongoing digital transformation across industries.