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A finger sensing apparatus may include a finger sensor including an integrated circuit (IC) substrate, an array of finger sensing elements on the IC substrate, and match circuitry on the IC substrate for performing final finger matching. The finger sensing apparatus may also include a host platform cooperating with the array of finger sensing elements for performing at least one finger prematch function. In addition, the finger sensor and the host platform may implement at least one security function therebetween. The at least one security function may include a watermarking function, and/or an encryption/decryption function.