Apple has released a new white paper explaining how Touch ID works in detail. The Secure Enclave is responsible for processing fingerprint data from the Touch ID sensor, determining if there is a match against registered fingerprints. It’s encrypted and authenticated with a session key that is negotiated using the device’s shared key. The analysis discards minutia data that would be required to reconstruct the user’s actual finger-print, such as subdermal ridge flow angle mapping, and then it’s discarded after.”]
Source: https://gizmodo.com/apple-finally-explains-touch-id-security-in-detail-1532298901