Identity Verification Market

[354 Pages Report] MarketsandMarkets forecasts global identity verification market is projected to grow from USD 9.5 billion in 2022 to USD 18.6 billion by 2027 at a compound annual growth rate (CAGR) of 14.4% during the forecast period. The rising occurrences of identity thefts and increasing risks of fraudster access to business networks, apps, or services is one the primary factors driving market growth, Moreover, stringent government regulations and mandates concerning privacy, and increased digitalization initiatives will drive the demand for these products in the near future.

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Covid-19 Impact

The primary contribution of COVID-19 is the transition from a manual to an automated work culture; there has been an increase in online activities, which has led to a huge rise in the number of online registrations and profile identification, increasing the risk of fraud; as a result, there is also an increase in demand for id verification. A growing number of enterprises across all sectors are being pushed to adjust to the difficulties of the post-COVID world as the coronavirus pandemic continues to have an impact on people and businesses worldwide. While under lockdown, individuals are shifting their everyday activities to online services, which is growing both the volume of online transactions and the number of fraud instances. Because of this, a number of businesses must consider the need for digital transformation in order to offer their clients safe and secure services and ensure that neither their personal information nor their money is in danger. As a result, identity verification is becoming more and more popular as a security solution, and this trend is anticipated to continue during the projection period.

Identity Verification Market Dynamics

Driver: Growing digitalization initiatives

Due to the large number of identity-related thefts that are being discovered as a result of global digitalization, businesses are obliged to implement extreme security measures. Due to the increasing digitalization of governments and the commercial sector globally, identification verification is increasingly essential in circumstances where verified identity is required, such as border restrictions and access to digital services. With global initiatives like electronic ID cards (eID), smart border control that uses facial recognition for identity verification, and smart cities and smart airports that use video analytics and liveness detection for ID verification, secure identity verification has become a crucial part of online security in these areas. Additionally, corporations and governments have launched a number of programs to focus on digitalization and the implementation of cutting-edge technologies like automation, artificial intelligence (AI), and machine learning (ML) in identity verification systems. These initiatives are expected to fuel adoption trends in the identity verification industry and present attractive prospects for vendors. As internet usage and eCommerce activities grow, identity verification technologies will likely be used more frequently in significant enterprises. Additionally, the use of emerging biometrics technologies for identification verification is widespread. growing the demand for identity verification as a result.

Restraint:   Lack of technical expertise and requirement for security awareness and training

Lack of knowledge regarding security risks and the resulting potential losses is impeding the growth of the identity verification systems industry. Inexperienced system integrators and security experts run the danger of destroying the present IT system, which is built on critical infrastructure, by attempting to connect antiquated IT systems with upgraded identity verification technologies. It is becoming more difficult for organizations to meet their growing verification security demands due to a lack of technical competence and security skills. Many companies use security staff that lacks the knowledge necessary to understand the intricacies of identity verification systems. Businesses with strict identity verification system requirements are susceptible to multiple breaches since they struggle to obtain competent workers. Security companies offer a number of crucial services. The team at the customer's location is shown the newly installed solution. This training improves the abilities of the employees, increasing the level of security and safety. As security technologies, mobile devices, and applications are developing so fast, it is predicted that the market for security training and consulting will expand quickly in the future years.

Opportunity: Adopting biometric devices in identity verification systems.

Highly powerful mobile devices with increasingly sophisticated cameras, microphones, and GPS capabilities have enabled self-service identity verification to deliver real multi-factor authentication in a variety of different forms. When paired with other data-based verification, this type of technique provides excellent possibilities for digital identity verification. Biometrics, as a form element for digital identification, provides better attribution to an individual due to its distinguishing characteristics and, as a result, is less vulnerable to impersonation, provided the means of acquisition is strictly regulated. Several companies are building mobile applications and SDKs to capitalize on this growing sector. Document verification tests, such as blinking and nodding, enable the recognition and authenticity of passports and driving licenses.

Challenge: Disparities in costs of several identity verification solutions

The price fluctuation of various solutions is a substantial obstacle to identity verification. There are several factors that influence costs. As a result, the prices charged by businesses to clients may differ from the initial expenses of identity verification systems. These characteristics include languages, technological help, and data storage, for example, prices at certain firms vary depending on the type of product selected by the client. Larger companies provide annual and monthly rates for each verification. Price fluctuations occur from the customer only having access to a limited number of ID verification checks. Customers struggle considerably as a result of price discrepancies since they are unsure of what they will receive. Furthermore, customers are less inclined to be satisfied if they settle for identity verification that does not match their company.

Identity Verification Market Ecosystem

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By vertical, the BFSI segment is to account for a larger market size during the forecast period

The BFSI sector caters to a variety of highly private and sensitive data, including client financial information, usernames, passwords, and other identifying details. This is prompting the BFSI industry in implementing strong security solutions like identity verification to protect its data and resources from fraud and theft. Additionally, Identity verification solutions and services are being used more widely in the BFSI vertical by strengthening the safety of online services from cyberattacks and serving as a requirement for increasing customers' trust in digital identities.

By component, the solutions segment is to account for a larger market size during the forecast period

Solutions and services make up the market segments for identity verification, organized by component. Identity screening solutions may easily integrate KYC-compliant ID verification for Politically Exposed Persons (PEPs), sanctions, and adverse media screenings, as well as providing real-time monitoring. As a result, it produces fewer false positives, saving the organization time while onboarding and assessing people. Also, the requirement for solutions to assist firms with AML and KYC standards is projected to boost the industry in the future. Furthermore, assessing many layers of identification variables (such as location, activity, device, and email attributes) can provide a far more thorough and precise likeness of identity than simply verifying ID documents. Such integrated and advanced identity verification solutions would drive market growth.

By deployment mode, the cloud segment to grow at a higher CAGR during the forecast period

Due to factors such as the low cost of installing cloud services, the broad availability of cloud services including SaaS and laaS models, and the demand for efficient security controls on the cloud, the cloud-based deployment method is gaining pace in the identity verification industry. During the prolonged lockdown, cloud services were continuously used, and as a measure of compliance and regulatory risk, businesses frequently verify that the accessible data complies with all applicable laws outside of the workplace. The use of cloud technologies to prevent identity fraud is still widely used in organizations that are moving to remote working. Furthermore, its expansion is anticipated to be aided by the large number of well-known identity verification suppliers who employ cloud-based deployment. Thus, the cloud segment is to grow at a higher CAGR during the forecasted period.

By region, North America to have the largest market size during the forecast period

North America dominates the global identity verification market with a large number of vendors, such as LexisNexis Risk Solutions, Equifax, Trulioo, Mastercard, and several others, resulting in the adoption of identity verification solutions in the region. The increasing need for identity breaches, with growing concerns for security, is leading to the growth of the identity verification market in the region and is the reason for the expansion of identity verification in the region. The region's early adoption of cutting-edge technologies like Al and ML as well as a high level of public awareness of security measures are other factors that are fueling the market for identity verification solutions and encouraging North American firms to use them.

Key Market Leaders

Experian (Ireland), LexisNexis Risk Solutions (US), Equifax (US), Thales (France), GBG (UK), TransUnion (US), Mastercard (US), Onfido (UK), Trulioo (Canada), Acuant (US), Mitek Systems (US), IDEMIA (France), Jumio (US) are some of the key players operating in the global identity verification market.

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Scope of the Report

The study categorizes the identity verification market by component, type, organization size, deployment mode, application, vertical, and region.

By Component

• Solution
• Services

By Type

• Biometrics
• Non-Biometrics

By Organization Size

• Large Enterprises
• Small and Medium-Sized Enterprises (SMEs)

By Deployment Mode

• Cloud
• On-Premises
• Application
• Access Control and User Monitoring
• KYC, KYB, and Onboarding
• Identity Fraud Compliance and Forensics
• Vertical
• BFSI
• Retail and eCommerce
• Government and Defense
• Healthcare and Life Sciences
• IT and ITeS
• Telecom
• Energy and Utilities
• Education
• Gaming and Gambling
• Others

Region

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

Recent Development

• In December 2022, Thales unveiled a new solution, Thales' multimodal biometric pod, an effective enrollment and identification solution that aids in the seamless management of border and immigration operations for travellers. The combination of iris and face capture and recognition capabilities allows for quick and secure enrolment and ID verification at borders. The pod has a contemporary design that meets the demand of the authorities in highly secure areas.
• In April 2022, LexisNexis introduced a new product, AmplifyID. The LexisNexis AmplifyID is an identity-centric platform designed to place identity verification at the forefront of mission-critical decision-making. This product expands the company's knowledge across public and private sectors as well. AmplifyID improves identity management across crucial agency activities. The safe and powerful platform also increases service coordination, fraud prevention, program integrity, policy understanding, and decision-making.
• In October 2021, Experian partnered with Citadel API. Experian introduced new verification capabilities to connect lenders to over 120 million consumer-permissioned payroll accounts. Through this partnership, Experian is integrating technology from Citadel API and is bolstering its existing suite of digital verification solutions to provide lenders with access to permissioned payroll records from more than 40 of the top payroll providers across the US.
• In September 2021, Equifax introduced a Digital Identity Suite solution designed to simplify the rental application process. The Suite includes a document verification tool that matches a selfie to the picture on a photo ID using facial recognition. The platform's auto-fill function will aid in this process, while the device verification tool ensures that the device is in the hands of its rightful owner.

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