Identity Verification Market

[408 Pages Report] MarketsandMarkets forecasts global identity verification market is projected to grow from USD 10.9 billion in 2023 to USD 21.8 billion by 2028 at a compound annual growth rate (CAGR) of 14.9% during the forecast period. The identity verification market flourishes as a result of several converging factors. Rising security risks, escalating online transactions, and the integration of digital identities underscore the need for more robust verification techniques. Progress in artificial intelligence (AI) and biometric technologies bolsters precision and user experience and triggers heightened demand, notably in sectors such as finance and healthcare. Moreover, the expanding technological landscape in emerging markets fosters fresh prospects, thereby driving the market's overall growth.

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Identity Verification Market Dynamics

Driver: Growing digitalization initiatives

As digitalization expands globally, businesses are under increasing pressure to fortify their security measures due to the surge in identity-related theft incidents. The need for reliable identity verification is becoming ever more critical, particularly in border controls and access to digital services, where validated identity is paramount. Initiatives like electronic ID cards (eID), intelligent border control utilizing facial recognition, and the integration of video analytics and liveness detection in smart cities and airports underscore the importance of secure identity verification in online security.

Moreover, corporations and governments are spearheading initiatives to embrace digitalization, leveraging advanced technologies like automation, artificial intelligence (AI), and machine learning (ML) in identity verification systems. These efforts are anticipated to drive adoption rates within the identity verification industry, offering promising vendor opportunities. As internet usage and eCommerce continue to flourish, identity verification technologies are poised to play an increasingly pivotal role in major enterprises. Additionally, the widespread adoption of emerging biometrics technologies further contributes to the growing demand for robust identity verification solutions.

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

The growth of the identity verification systems industry is hindered by a lack of awareness regarding security risks and the potential losses they entail. Inexperienced system integrators and security professionals risk disrupting existing IT infrastructure, which relies on critical systems, by attempting to integrate outdated IT systems with upgraded identity verification technologies. Organizations struggle to meet increasing demands for verification security due to a shortage of technical expertise and security skills.

Many companies employ security personnel who lack the necessary knowledge to comprehend the complexities of identity verification systems, leaving them vulnerable to multiple breaches. Security firms provide essential services, including on-site training for the client's team upon implementing new solutions, enhancing employee skills, and elevating security levels. With the rapid advancement of security technologies, mobile devices, and applications, the market for security training and consulting is expected to experience significant growth in the coming years.

Opportunity: Adoption of biometric devices in identity verification systems.

Adopting biometric devices in identity verification systems presents a significant opportunity for enhancing security and efficiency. Biometric authentication methods, such as fingerprint recognition, facial recognition, and iris scanning, offer more reliable and secure ways of verifying identity than traditional methods like passwords or PINs. This trend allows businesses and organizations to implement more robust identity verification systems that provide a seamless and frictionless user experience while significantly reducing the risk of identity fraud and unauthorized access. Additionally, as biometric technology continues to evolve and become more accessible, there is a growing market for innovative biometric devices and solutions across various industries, including finance, healthcare, and government, driving further growth and innovation in the identity verification market.

Challenge: Disparities in costs of several identity verification solutions

The advancement of competent mobile devices with advanced cameras, microphones, and GPS functionalities has facilitated self-service identity verification, allowing for robust multi-factor authentication in various forms. Combined with other data-driven verification methods, this approach holds significant promise for digital identity verification. Biometrics, as a component of digital identification, offers enhanced attribution to individuals due to their unique characteristics, making them less susceptible to impersonation if acquisition methods are carefully regulated. Numerous companies are developing mobile applications and SDKs to tap into this burgeoning sector. Document verification procedures, such as blinking and nodding, enhance the recognition and authentication of passports and driver's licenses.

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

The BFSI sector manages highly confidential and sensitive data, encompassing client financial details, login credentials, and other personal identifiers. The BFSI industry is increasingly adopting robust security measures such as identity verification to safeguard this information from fraud and theft. Moreover, identity verification solutions and services are gaining broader traction within the BFSI vertical, bolstering the security of online services against cyber threats and bolstering customer confidence in digital identities as a prerequisite.

Offering the solutions segment is to account for a larger market size during the forecast period.

The identity verification market comprises various segments categorized by components. Identity screening solutions seamlessly integrate KYC-compliant ID verification for Politically Exposed Persons (PEPs), sanctions, and adverse media screenings, along with offering real-time monitoring capabilities. This reduces false positives, saving organizations time during onboarding and assessment processes. Additionally, the increasing demand for solutions aiding firms with Anti-Money Laundering (AML) and Know Your Customer (KYC) standards is expected to drive industry growth in the future. Moreover, assessing multiple layers of identification variables (such as location, activity, device, and email attributes) can offer a more comprehensive and accurate representation of identity than solely verifying ID documents. Adopting integrated and advanced identity verification solutions is poised to fuel market expansion.

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

The adoption of cloud-based deployment is rapidly increasing within the identity verification industry, driven by factors such as the affordability of cloud services, the widespread availability of Software as a Service (SaaS) and Infrastructure as a Service (IaaS) models, and the growing demand for robust security measures in the cloud environment. Throughout extended lockdown periods, cloud services remained indispensable, with businesses frequently verifying that their data, accessed remotely, adheres to regulatory requirements and compliance standards. Cloud technologies prevent identity fraud, particularly in organizations transitioning to remote work setups. Moreover, the proliferation of reputable identity verification vendors leveraging cloud-based deployment is expected to fuel the expansion of the cloud segment further, projecting a higher Compound Annual Growth Rate (CAGR) during the forecast period.

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

North America asserts its dominance in the global identity verification market, buoyed by many vendors such as LexisNexis Risk Solutions, Equifax, Trulioo, and Mastercard, among others, driving the widespread adoption of identity verification solutions across the region. The escalating concerns over identity breaches and the imperative for enhanced security measures contribute significantly to the market's growth trajectory in North America. Additionally, the region's proactive embrace of cutting-edge technologies like Artificial Intelligence (AI) and Machine Learning (ML) and a heightened public consciousness regarding security protocols catalyze the demand for identity verification solutions, prompting North American enterprises to leverage them extensively.  

Key Market Players

LexisNexis Risk Solutions (US), Experian (Ireland), Equifax (US), Thales (France), GBG (UK), TransUnion (US), Mastercard (US), Onfido (UK), Trulioo (Canada), IDology (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 Offering

• Solutions
• Services

By Type

• Biometrics
• Non-Biometrics

By Organization Size

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

By Deployment Mode

• Cloud
• On-Premises

By Application

• Access Control and User Monitoring
• KYC, KYB, and Onboarding
• Identity Fraud Compliance and Forensics

By Vertical

• BFSI
• Retail & eCommerce
• Government & Defense
• Healthcare & Life Sciences
• IT & ITeS
• Telecommunication
• Energy & Utilities
• Education
• Gaming & Gambling
• Other Verticals

By Region

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

Recent Development

• In May 2023, Thales unveiled its Trusted Identity Services, a cloud-based platform designed to streamline identity verification processes across industries. This comprehensive platform encompasses a range of functionalities, such as KYC/AML compliance, document verification, and liveness detection. Thales aims to simplify identity verification for businesses operating in diverse sectors by offering these services through the cloud.
• In July 2023, LexisNexis' ThreatMetrix Identity Insights emerged as a robust solution for real-time risk evaluation and fraud mitigation. Utilizing machine learning and advanced analytics, it delves into user conduct and device information to give businesses actionable insights, bolstering the security of their digital interactions.
• The September 2023 partnership between Experian and Jumio signals significant advancements in identity verification, particularly for KYC and AML compliance. Leveraging Experian's expertise in data analysis and compliance alongside Jumio's AI-powered verification solutions, the collaboration aims to streamline onboarding processes, enhance fraud detection, ensure regulatory compliance, and cater to diverse industry needs. This partnership holds promise for various sectors, including financial services, e-commerce, gaming, government services, and travel, by offering secure identity verification solutions tailored to their specific requirements.
• In June 2023. Global Identity Check offers real-time verification by leveraging diverse data sources and methods, reducing onboarding friction and wait times. With a global reach covering multiple countries and document types, it supports businesses with international operations. The solution authenticates government-issued IDs using advanced image recognition, employs various identity verification methods like facial and phone verification, and ensures compliance with KYC and AML regulations. Businesses benefit from faster onboarding, reduced costs, enhanced security, global scalability, and improved data accuracy. Use cases include financial services, e-commerce, gaming, travel, and cryptocurrency exchanges.

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