PHYSICAL SECURITY IN FINANCIAL SERVICES CURRENT TRENDS AND FUTURE THREATS

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1 Information Analytics Expertise IHS TECHNOLOGY CONSULTING & ADVISORY SERVICES PHYSICAL SECURITY IN FINANCIAL SERVICES CURRENT TRENDS AND FUTURE THREATS Oliver Philippou Senior Analyst 2016 IHS. ALL RIGHTS RESERVED.

2 IHS The World s Leading Source for Information, Analytics, and Expertise IHS Since 1959 Headquartered in Englewood, CO (traded on the NYSE) 8,000+ colleagues in 30+ countries speaking 50+ languages Serve businesses and governments in 165+ countries worldwide 70% of the US Fortune % of the Global Fortune 500 IHS is supported by 140+ offices around the world 2016 IHS. ALL RIGHTS RESERVED. 2

3 Why IHS Physical Security Research? Largest global analyst team Complete security channel coverage Most detailed research on the market Credible data 15+ analysts covering every aspect of the physical security industry. Our analysts are located across the world in four locations throughout Europe, Asia, and the USA. Extensive coverage of the entire physical security route to market, from components and equipment data, to insight on the integration and endusers of physical security systems. IHS provides the most detailed research available on the physical security market. Equipment markets are segmented by numerous products, end-user industries and geographic regions. IHS has been researching the physical security market since Our focus on primary data collection and analysis has allowed us to produce the industry s most accurate market data and forecasts. IHS physical security research is supported by the industry s largest team of analysts and provides unrivalled depth, breadth and expertise 2016 IHS. ALL RIGHTS RESERVED. 3

4 Banking and finance video surveillance and security report Published in January This is the third edition in a series of reports by IHS on physical security in the banking and finance market. This report forms part of a larger series of security application reports covering markets including airports, education, critical infrastructure and retail. This report mainly used information collected through telephone interviews with equipment manufacturers, system integrators, banking end users IHS. ALL RIGHTS RESERVED. 4

5 Banking and Finance Market Data 2015 IHS. ALL RIGHTS RESERVED. 5

6 Revenues ($M) How big is the banking and finance market? In EMEA the Banking and Finance market, for all security products, accounts for $330m. EMEA market for for electronic security equipment in banking and finance Revenue growth profile to That accounts for ~8% total manufactures revenues. IHS forecasts a 2.7% CAGR growth from for all equipment Total Source: IHS 2015 IHS 2016 IHS. ALL RIGHTS RESERVED. 6

7 Revenues ($M) How fast is the banking and finance market growing? Video surveillance accounts for ~60% of revenues. EMEA market for video surveillance equipment in banking and finance Revenue growth profile to % Video surveillance equipment will only grow at a forecast sub 1% CAGR from The market average for all other verticals is over the same period is 3.7%. 4.0% 3.0% 2.0% 1.0% 0.0% % Banking and finance Other verticals (exclusind Banking) Source: IHS 2015 IHS 2016 IHS. ALL RIGHTS RESERVED. 7

8 Market Trends 2015 IHS. ALL RIGHTS RESERVED. 8

9 Transition to network video surveillance Safety is still considered first and foremost, with physical security systems being a way to achieve this safety. However, in recent times information has become one of the more important factors. IT managers were reluctant to open up their networks to new devices. EMEA market for video surveillance equipment in banking and finance Trasition Installbase from network to 2016 to analog to 2020 Revenues ($M) IHS estimates that much of the banking industry installed base is still mainly analog technology. Source: IHS Analog Network 2015 IHS 2016 IHS. ALL RIGHTS RESERVED. 9

10 Revenues ($M) Transition to network video surveillance EMEA market for video surveillance equipment in banking and finance Trasition from network to analog to 2020 However, interviews with security managers within the banking industry during the research for this report indicated that the majority of banks are now mainly installing network based video surveillance video cameras. Banking 2015 Others 2015 Banking 2020 Banking is behind the rest of the Others 2020 market in terms of network penetration rates. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Network Analog Source: IHS 2015 IHS 2016 IHS. ALL RIGHTS RESERVED. 10

11 Transition to network video surveillance Most important requirements of video surveillance systems in banking and finance facilities 1) Reliability: Reliable systems mean banks spend less money on replacements and repairs. 2) Ease of use: In the banking and finance sector, the users of the video surveillance system are typically dedicated security officers. 3) Image quality: Video surveillance systems are used primarily as an investigative tool. It is therefore critical that the cameras are able to positively identify those involved in any incident being investigated IHS. ALL RIGHTS RESERVED. 11

12 Operational Budgets In the last few years, operational budgets and capital equipment budgets have not seen an real increase. This is largely because of a strategy decision by the banks to move away from bricks and mortar. Most interviewees do not expect any considerable changes to budgets for the next 12 to 18 months. As many reported, there is little to change, and most of the work is fix and replace. UK Banking Sector - Security Systems Intgration Market CAGR Design & Consultancy % Installation % Service & Maintenance % Equipment % Total % Most said that because of budget constraints they are more likely to fix and replace rather than choose complete refits. This is likely to result in an increase in the Service and Maintenance costs IHS. ALL RIGHTS RESERVED. 12

13 Use of Analytics Despite the increased use of video content analytics within the security industry, video analytics has failed to live up to expectations. The banking market remain skeptical that the technology is ready, as analytics are not 100% accurate yet. Analytics are rarely used as security system enhancers, and are mostly used business intelligence applications. The type of data that is collected includes ethnic profiling, queue counting and waiting times, and heat map analysis of where the customers walk. This type of information can be used for marketing and operational functions. A key consideration for business intelligence applications is now cost versus the benefit gained in customer insight IHS. ALL RIGHTS RESERVED. 13

14 ATM security Besides video surveillance there is often little other physical security (that is included within this report) protecting ATMs. Video content analytics have been identified as a potential addition to an ATM s security. Analytics that are likely to be used include: Facial recognition Expensive Does not produce 100% accuracy Requires a database of images to check against Loitering recognition analytics More practical application that identifies potential fraudsters Provides an indication that a device has been placed on the ATM to skim cards Questions remain as to the genuine usefulness of this analytic compared with analysis of ATM activities 2016 IHS. ALL RIGHTS RESERVED. 14

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