Digital Identity Solutions Market

DIgital Identity Solutions Market Size, Share, latest Trends, Industry, global analysys 2028

[344 Pages Report] The global DIgital Identity Solutions Market size is projected to grow from USD 34.5 billion in 2023 to USD 83.2 billion by 2028 at a Compound Annual Growth Rate (CAGR) of 19.3% during the forecast period. The expansion of the DIS market can be attributed to a boost in the usage of online services offered by commercial businesses. Moreover, the threat of privacy and data breach may hinder market growth.

Moreover, the DIS market is experiencing growth due to the introduction of AI/ML-powered services and increasing adoption by SMEs. These factors contribute to the market’s promising growth potential, providing organizations with enhanced identity management capabilities and proactive security measures.

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Digital Identity Solutions (DIS) Market Dynamics

Driver: Rise in ID wallet solutions

A serious push for digital identification schemes worldwide is set to be given by new ID wallet solutions. A  secure mobile app to store digitalized and encrypted versions of ID documents is defined by this recent technology, be it an identity, a driver’s license, vehicle card registration, and healthcare credentials. In other words, citizens can have a single, secure source for identification and ID verification services for all their ID credentials. With the help of such wallets, citizens can prove their identity and rights online and in person to law enforcement officers, health professionals, or citizens. In June 2021, the creation of a digital ID wallet was suggested by the European Commission. More than 80% of the EU population can use this wallet across the EU by 2030. China, the US, the UK, Japan, Australia, and others are doing the same. According to a study, more than 30% of national governments expect to provide identity wallets for mobile devices by 2024. Similarly, more than 66% of Americans anticipate having a digital wallet, and 54% of customers across all age categories want to use one issued by a bank by 2023.

Restraint: Lack of information security of consumer data

An eBanking application is being used globally by a large population. In the case of breaches in the banking industry, failure or compromised user privacy is a significant concern. The BFSI industry has already adopted advanced solutions for physical and information security. However, the rising internal and external user population and increased volume and complexity of transactions are concerns related to insecure endpoints, such as desktops, laptops, and mobile devices. These are the prime targets of cyberattacks, as these endpoints provide easy access that can be used for multiple attack vectors. Thus, user awareness of complex threats and system vulnerabilities is lacking. Businesses must continuously engage with customers and educate them about their data security. Hence, better solutions are required to develop an organization’s security infrastructure.

Opportunity: Increased integration of AI, ML, and blockchain to enhance digital identities

Integrating Al, ML, and blockchain technologies is a trending concept. Human labor is being replaced with designed computerized systems, reducing possible dangers. These innovations make it possible for computers to discover hidden insights without explicit programming and automate the construction of analytical models. Vendors of digital identification solutions can use ML-based analytics to analyze massive amounts of data and access-related actions. Precise monitoring and reporting on a user, account, application, department, and organizational risk posture can aid in reducing the identity attack surface.

In April 2023, a bill was signed by the Utah government, which includes the launch of a pilot program by the state’s Division of Technology Services for digital verifiable credentials using blockchain technology.

Challenge: High cost associated with the deployment of digital identity solutions

Additional hardware and infrastructure might be required while deploying a digital identity solution to support the increased load and processing requirements. Acquiring and maintaining additional servers, storage systems, networking equipment, and security appliances infrastructure can contribute to the overall deployment expenses. Integrating a digital identity solution with existing systems and applications within an organization involves developing custom interfaces, APIs, and connectors to enable seamless data exchange and functionality—the complexity of integration results in higher costs. The cost increases if the organization has a diverse technological landscape and multiple legacy systems.

Sometimes a customized solution is required to cater to any specific need of the organization. Customization and configuration work involves tailoring a digital identification system according to an organization’s requirements. This involves customizing the solution’s features, processes, user interfaces, and authentication procedures to meet the organization’s needs. The amount of customization needed may increase the final cost.

Digital Identity Solution Market Ecosystem

By vertical, retail, and eCommerce segment is to grow at the highest CAGR during the forecast period.

In the retail and eCommerce sector, digital identity solutions will improve customer experience and reduce cost and resource expenditure. The retail and eCommerce vertical rapidly implement digital identity solutions, which support business stability and enhance competitiveness. Retail is one of the top cost-conscious verticals. Due to potential payouts and many monetary transactions by Visa and Mastercard, it is one of the most targeted verticals. The adoption of managed authentication services is driven by increasing supply chain complexities, employees, channel partners, and customers. Various third-party applications in eCommerce organizations help manage their websites, third-party vendors, employee access points, and the increasing Internet of Things (IoT)-based devices, such as printers and security cameras. These organizations require more robust and faster authentication technology for a seamless workflow. Furthermore, digital identity solutions help improve customer experience and reduce cost and resource expenditure for CPG companies.

By Identity Type, the Biometric segment accounts for the highest market size during the forecast period

Passwords were typically the starting point for digital identification solutions before moving on to biometric authentication techniques like a fingerprint, face recognition, retina or eye scan, handprint, and voice recognition. To verify people and grant access to a certain range of services, biometric systems use lock and capture techniques. The standard key (or keycard) and password methods are less secure than the biometric options. Multi-factor authentication is another security measure used by these solutions. Due to the rising need for digital identification solutions, identity authentication, ID verification, and other services like compliance management and fraud protection, the biometric solutions market is expanding considerably.

By organization size, the SMEs segment is to grow at the highest CAGR during the forecast period.

Due to their tiny personnel and restricted financial resources, SMEs encounter a variety of IT issues. As a result, SMEs are using cloud-based digital identification solutions more and more. SMEs increasingly need digital identity solutions since they frequently pose a significant security risk and do not adhere to proper identity management regulations. Vendors have been forced to offer a solution at a low price due to the growing need from SMES for security, authentication, and verification in order to increase their productivity and pool their knowledge base. The use of digital identification solutions by SMEs will increase their client base and operational efficiency. Governments are also taking steps to safeguard SMEs in their various nations.

By region, North America accounts for the highest market size during the forecast period.

North America consists of developed countries US and Canada. These countries are technologically advanced along with well-developed infrastructure. The adoption of digital identity solutions in this region is driven by growing incidents of identity theft. According to Federal Trade Commission’s data, it received 2.4 million reports of fraud in 2022, out of which 1.1 million were identity theft reports. This large number of identity frauds is motivating the government to focus on strengthening its digital identity system. Different federal, state, provincial, and local entities within the region have different rules and requirements for these initiatives. The way how citizens identify themselves online within the region in various sectors, from financial services to healthcare, is changing due to new technologies such as big data and analytics, mobile, cloud computing, and biometrics. Programs like the Gov.UK Verify project were started in the US. The government released its updated digital identity and characteristics trust framework in August 2021. The Pan-Canadian Trust Framework, a government digital identification program piloted by the non-profit Digital ID Authentication Council of Canada (DIACC), is also progressing in Canada.

Digital Identity Solutions Comapnies

NEC (Japan), Samsung SDS (South Korea), Thales (France), Telus (Canada), IDEMIA (France), GBG (UK), Tessi (France), Daon (US), ForgeRock (US), ImageWare (US), Jumio (US), iProov (UK), ID R&D (US), Refinitiv (UK), OneSpan (US), Smartmatic (UK), Freja EID Group (Sweden), Vintegris (Spain), AU10TIX (Israel), Signicat (Norway), Duo Security (US), Syntizen (India), Hashcash Consultant (US), Good Digital Identity (Czech Republic) are the key players and other players in the DIS market.

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Scope of the Report

The study categorizes the DIS market by offering, solution type, identity type, organization size, verticals, and regions.

By offerings:

• Solutions
• Services

By Solution Type:

• Identity Verification
• Authentication
• Identity Lifecycle Management
• Other Solution Types

By Identity Type:

• Biometric
• Non- biometric

By organization size:

• Large Organization
• SMEs

By Vertical:

• BFSI
• Retail and eCommerce
• Government and Defence
• Healthcare
• IT and ITeS
• Telecommunications
• Energy and Utilities
• Other Verticals

By Region:

• North America
• Europe
• Asia Pacific
• Middle East & Africa
• Latin America

Recent Developments

• In May 2023, iProov partnered with Wultra to provide iProov’s biometric solutions suite as part of its portfolio of digital banking solutions.
• In March 2023, Thales announced a partnership with the Finnish police. The National Police Board of Finland is planning to launch new biometric travel and digital ID documents.
• In November 2022, ForgeRock launched a cloud-native digital identity governance solution. The new ForgeRock Identity Governance increases enterprise efficiency by combining its digital identity and access management platform.
• In November 2022, NEC launched a touchless, multimodal biometric authentication terminal. This terminal integrates face recognition technology with iris recognition technology to provide high levels of authentication.
• In November 2022, GoTyme Bank partnered with Daon. GoTyme Bank will utilize Daon’s IdentityX platform to enable digital identity capture and authentication in its mobile app.

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