Secure Enclave

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The Secure Enclave is part of the A7 chip and a basic part of Apples Touch ID fingerprint technology. Within the Secure Enclave the fingerprint data is stored in an encrypted form which - according to Apple - can only be decrypted by a key available by the Secure Enclave thus making fingerprint data walled off from the rest of A7 Chip and as well as the rest of iOS. The secure enclave itself is a flashable 4MB processore called the secure enclave processor (SEP) as documented in Appple Patent Application 20130308838. The technology used is basically ARM's TrustZone/SecurCore.

Further References

www.forbes.com