Exclusive Q&A: Robert LaPenta on the State of Biometrics

Robert "Bob" LaPenta, former CFO and President of homeland security solutions provider L-3 Communicatioins, left the company in April to start his newest venture, L-1 Investment Partners, which will be investing and providing management support in the biometrics industry. For LaPenta, biometrics is as much of a personal issue as it is a business investment. Just recently LaPenta himself has been plagued by identity theft -- including an instance in which someone tried pose as him to use his access to a corporate jet -- so it's no surprise that he strongly advocates for the presence of more biometrics terminals for identity verification. His new company, which will invest in some companies, serve as a consultant to others, and be available to purchase even others, is about to close its first investment into the biometrics marketplace with an as-of-yet unnamed company. SecurityInfoWatch.com caught up with LaPenta over the phone from his Westport, Conn., office on Wednesday, June 8, 2005, for a quick interview about the state of the biometrics marketplace.

With your background, it seems like you would be well-poised to venture into any security market -- be that access control, RFID, sensors or video. What interested you into focusing on the biometrics marketplace?

LaPenta: I think that there is an incredible opportunity in the biometrics markets. It's a lot like the defense industry was in the 1980s. It was poised to grow, but tremedously fragmented. Then in the 1990s when defense spending grew, those companies that could pull in the horizontal and vertical markets took off. I'm a fan of the roll-up theory, at least when a company knows how to make it work.

Not only is the biometric industry ripe for consolidating -- there is good technology but the companies are undercapitalized -- but it's really just emerging. There is a chance to create a dominant player in a rapidly growing market.

So why enter this market as L-1 rather than doing this kind of consolidating and purchasing as part of L-3?

L-3 is an $8 billion company; to do this you really need to be focused on these smaller companies. This is not a market that they need to be focused on. At L-3 we talked about all the gorillas of the marketplace, and I don't think the gorillas can focus the kind of energy needed to develop this kind of industry. It requires a lot of management attention for these companies. We [at L-1 Investment Partners] want to do what InVision did, to be in the kind of place they were before GE bought them.

When we speak with end-users, we still find a lot of the wait-and-see attitude about biometrics. What do biometrics manufacturers need to do to break this technology into mainstream access control and verification markets?

I think it's just continuing to demonstrate that the technology is there and that the costs are coming down. I think that goverment mandates are going to play a large role in integrating biometrics into access control and I think that this will shape how the commercial market uses it.

Speaking of emerging technololgies, at the recent ISC show, there were companies trying to create buzz about vein recognition. What's your take on this technology?

I think it's very premature. I think the closest thing to its position is the iris technology. But we also see it in some places where companies use vein recognition in fingerprints to verify the fingerprint is from a living person, mainly to ensure against the spoofers and prostheses. There are also no databases for vein recognition. I don't think of this as one of the core biometrics. By those I mean fingerprint, palm, face and iris.

Where is the biometrics industry poised for growth?

I think it's going to depend on which market you're looking at, but everything will trail fingerprints because it's already so accepted. The databases are available and it's already used by the US-VISIT and Trusted Traveler programs. But what are more accurate, less intrusive and requires less maintenance are facial and iris recognition. There are no worries about scars or sweat because it's basically just taking a picture of you.

I think we'll see multi-level biometric authentication where an iris scan is coupled with a fingerprint scan. But in this silicon-world, you're first going to see a lot of fingerprint keypads, at computers, in grocery check-out lines.

For markets, I think you'll see biometrics used in facility access, IDs, travel and transportation. Passports, financial transactions, elections, driver's licenses, etc. ... these are all going to be leading markets for biometrics. It's going to be used for ID verification and authentication.

When we start discussing issues of biometric databases, it brings strong concerns from civil libertarians. How does the biometrics industry address concerns of civil liberties?

I think the demographics post-9/11 are very favorable when it comes to security. One survey I recently heard was that 65 percent of people are in favor of enhanced security using biometrics. In situations like when they're traveling, people feel a lot better about IDs being checked with biometrics. So what I'm saying is that we could talk for three days about identity crimes and still not come up with all the reasons to use biometrics.