Digital Identity Solutions Market

Digital Identity Solutions

Digital identity refers to the information that is associated with an individual or entity in a digital context. This information includes attributes such as name, address, date of birth, and other details that can be used to uniquely identify an individual or entity. Digital identity solutions are technologies and strategies that are designed to manage and protect digital identities. In this essay, we will discuss the importance of digital identity solutions and their impact on various industries.

The Importance of Digital Identity Solutions

Digital identity solutions are becoming increasingly important in today's digital landscape. As more and more people conduct their personal and professional lives online, the risk of identity theft and fraud has increased. Digital identity solutions can help to mitigate these risks by providing secure and reliable methods for verifying the identities of individuals and entities. They also enable better access control to online resources and protect user privacy by limiting access to personal information.

In addition, digital identity solutions are critical for businesses and organizations that rely on online transactions. These solutions help to build trust between customers and businesses by ensuring that their personal and financial information is protected. They also enable businesses to comply with regulatory requirements such as Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.

Impact of Digital Identity Solutions

Digital identity solutions have a significant impact on various industries, including finance, healthcare, and e-commerce. In the finance industry, digital identity solutions enable secure online banking, investment, and payment transactions. They also help financial institutions comply with KYC and AML regulations, reducing the risk of fraud and money laundering.

In healthcare, digital identity solutions enable secure access to patient records and other sensitive information. They also facilitate the sharing of information between healthcare providers, improving patient outcomes and reducing medical errors.

In e-commerce, digital identity solutions enable secure online transactions and help to prevent fraud. They also enable personalized marketing and customer experiences by providing businesses with valuable customer data.

Dynamics of Digital Identity Solutions Market

Drivers in Digital Identity Solutions Market

Digital identity solutions have emerged as a critical tool for combating cyberattacks and identity-related fraud and theft in recent times. One of the primary drivers of the digital identity solutions market is the rise of ID wallet solutions, which allow citizens to securely store and share digitalized and encrypted versions of their ID documents. These solutions use cutting-edge technologies like machine learning, face-based biometrics, blockchain, and artificial intelligence to establish a trusted identity and provide a higher level of assurance.

Restrains in Digital Identity Solutions Market

However, despite the numerous benefits of digital identity solutions, one of the key restraints in the market is the high cost involved in deploying such solutions. The initial investments and costs associated with implementing digital identity solutions are significant, and organizations across all verticals face budget constraints that make it challenging to carry out IT security operations effectively. This often leads to SMEs focusing on security only after a breach has occurred, while larger enterprises prioritize the security of critical servers and pay less attention to the data stored in databases, leaving them vulnerable to cyber threats.

Moreover, the increasing complexity of organizational structures, the growing number of people and devices with unique identities across networks, and the rise of mobile computing and e-commerce are further driving demand for digital identity solutions. Despite the challenges posed by cost, the need for secure and trusted digital identity solutions is likely to continue to grow as organizations seek to combat cyber threats and protect their sensitive data.

Opportunities in Digital Identity Solutions Market

The integration of AI, ML, and blockchain technologies presents a promising opportunity for enhancing digital identities. By automating analytical model building, these technologies can enable computers to uncover hidden insights and minimize potential risks. This is particularly useful in the digital identity solution market, where ML-based analytics can be applied to large volumes of identity-related data to accurately measure and report on user, account, and organizational risk posture. Sectors like automobile, BFSI, and government have already started implementing these technologies to improve identification and authentication processes.

Blockchain technology, in particular, is playing a vital role in this area. Decentralized identity solutions using blockchain technology provide an open-standards-based identity framework that uses digital identifiers and verifiable credentials that are self-owned, independent, and enable trusted data exchange. As investments in digital transformation increase, identity results have garnered increasing acceptance as they aid in secure identification and upgraded security, which supports industry growth.

Challenges in Digital Identity Solutions Market

However, the implementation of digital identity solutions is not without its challenges. One major challenge is the threat of privacy and data breaches. People are hesitant to share their facial data for fear of it being misused, particularly in countries in Latin America and Africa. Additionally, citizens are afraid that their personal data, including social security numbers and bank account details, may be breached and compromised if they enable the use of digital identities.

To overcome these challenges, governments and enterprises must engage with end-users more actively and make them aware of the advantages of digital identities. Once people gain confidence in the security of their digital identities, they will be more willing to adopt digital identity solutions. This will enable organizations to plan corrective measures and strategic steps and open up many growth avenues for digital identity solutions vendors.

Ecosystem of Digital Identity Solutions Market

The retail and eCommerce sector is expected to experience the highest growth rate among all verticals, according to forecasts. Digital identity solutions have been swiftly implemented in this sector to support business stability and enhance competitiveness. This is particularly important for the retail industry, which is known for being cost-conscious, and is frequently targeted by cyberattacks due to the potential payouts and a large number of monetary transactions via credit card companies like Visa and Mastercard.

The retail and eCommerce sector holds significant potential for the digital identity solutions market. Retailers are being compelled to adopt managed authentication services due to the increasing complexity of their supply chains, as well as the channels they use to reach their customers and partners. Ecommerce organizations use various third-party applications to manage their websites, vendors, employee access points, and a growing number of Internet of Things (IoT)-based devices, such as security cameras and printers. They require a more robust and rapid authentication technology to maintain a seamless workflow. For consumer packaged goods (CPG) companies, digital identity solutions are beneficial in enhancing customer experience while reducing costs and resource expenditure. Therefore, it is critical for retail and eCommerce organizations to adopt digital identity solutions to protect themselves against critical incidents and improve the overall customer experience.

The Asia Pacific region boasts several developing and developed economies, including Australia, China, Japan, India, Singapore, and South Korea. With the rapid increase in technological innovations, the digital identity solutions market in the Asia Pacific region is experiencing substantial growth opportunities. This region comprises a mix of developing and developed countries, and in 2019, it suffered a loss of USD 260 million to digital fraud, with 71% of online fraud stemming from identity theft.

Developing countries such as India, China, and Japan are adopting digital identities to authenticate their citizens, while developed countries like South Korea are using digital identities for more advanced applications, including accessing government services and identification. Australia, a developed country, has launched its federated digital identity system to allow citizens access to government services. Singapore is leading the way in the Asia Pacific region with regards to advancements in digital identity. The country has introduced SingPass and CorpPass programs to provide enhanced security for citizens while accessing government services. Singapore is also planning to implement a real-time payment authentication system based on digital identity in the near future.

During the forecast period, the solutions segment emerged as the market leader, accounting for over 66% of global revenue. Various vendors offer digital identity solutions as an integrated platform or tool that can be easily integrated into an organization's existing infrastructure. These vendors also provide hardware and services to help organizations implement the necessary solution.

Digital identity solutions are aimed at enhancing security, reducing costs, streamlining business processes, and enhancing customer satisfaction. Retail, IT, healthcare, and financial services customers are incorporating digital identity solutions into their operations to automate the customer onboarding process and save time. The IT and Telecommunication sector accounted for over 19% of global revenue during the forecast period. Additionally, BFSI is expected to generate the highest revenue after IT and Telecom. Due to the increase in bank fraud committed by in-house employees and helpdesk calls related to forgotten passwords, BFSI firms have adopted digital identity solutions. Customers expect banking services anytime, anywhere, so BFSI firms are deploying various services, such as internet banking, mobile banking, and stock trading via web and mobile applications.

Furthermore, the BFSI industry vertical is increasingly concerned about securing its customers' sensitive data, driving the digital identity solutions industry forward. In November 2022, Daon, Inc. announced that GoTyme Bank Corporation, a joint venture of Tyme, a new digital bank, used Daon IdentityX for digital identity capture and authentication in the GoTyme banking app. The solution will assist in lowering the barriers to setup accounts for consumers while also ensuring GoTyme Bank has precise proofing and identity verification for all prospective consumers. The retail and e-commerce sector is expected to experience significant growth during the forecast period. The retail and e-commerce sector is rapidly implementing digital identity solutions to enhance business stability and increase competitiveness. Due to the high number of monetary transactions processed by MasterCard and Visa, it is one of the most cost-conscious verticals and the most vulnerable to cyberattacks.

During the forecast period, the biometric segment accounted for over 59% of global revenue, leading the market due to its superior security compared to conventional keys or keycards, and password systems. Biometric authentication methods like fingerprint, facial recognition, retina or eye scan, handprint, and voice recognition have traditionally replaced passwords as digital identity management solutions have evolved. Biometric solutions use lock-and-capture mechanisms to verify individuals and provide access to specific services. For example, a "photo verification" system based on face biometrics, a crucial part of an Australian state digital ID, was pilot tested in New South Wales in November 2022. The opt-in public service decentralizes selfie biometrics and other personal data security, placing it in the hands of citizens who can control which information about them is visible by storing their credentials on their mobile devices.

In the coming years, the non-biometric segment is expected to see significant growth. This segment facilitates the authorization and validation of an individual's identity to enable the provision of entitlement or services, relying on factors such as passwords, PINs, and knowledge of personally relevant information or events. Incorporating Machine Learning (ML) and Artificial Intelligence (AI) technologies into non-biometric digital identity solutions can effectively detect and remediate unauthorized and suspicious activities, as well as invasive access requests on an enterprise network. The non-biometric solutions segment is a crucial component of digital identity solutions and has witnessed rapid growth in recent years.

During the forecast period, the authentication segment of the digital identity solutions market led in terms of revenue, accounting for over 46% of the global market. Authentication plays a crucial role in verifying user identity and preventing fraudulent activities. The market for digital identity solutions is segmented into two categories based on authentication types: single-factor and multi-factor.

Single-factor authentication employs only one feature to verify a person's identity. This type of authentication includes solutions such as passwords, fingerprints, PINs, facial, voice, iris, and vein recognition. Single-factor authentication is simple and widely used in various industries, including government, consumer electronics, banking and finance, and healthcare.

On the other hand, multi-factor authentication provides a high level of security and ensures the confidentiality of personal information. It is considered more secure than traditional one-factor authentication methods such as usernames and passwords/PINs, which are easily guessed and forgotten. For example, in April 2021, HID Global Corporation, a division of ASSA ABLOY, launched WorkforceID Authentication, a multi-factor authentication solution for the workforce. The cloud-based solution enables businesses to organize, issue, and deploy digital identity credentials for physical and logical access control.

During the forecast period, the on-premises segment emerged as the leader, contributing to more than 64% of the global revenue. This is mainly due to the availability of infrastructure in large enterprises that allows them to deploy their solutions on-premises, ensuring greater flexibility and control. The deployment mode involves a one-time licensing fee and service agreement, which makes it more convenient for larger organizations. Digital identity solutions, deployed on-premises, provide valuable insights into clients, thereby creating a more consistent experience.

In contrast, the cloud segment is projected to exhibit significant growth in the future due to benefits such as lower installation and maintenance costs, as well as ease of use. Cloud-based digital identity solutions are becoming popular as they save organizations costs associated with infrastructure maintenance and technical staff. By deploying these solutions on the cloud, companies can focus on their core competencies rather than investing in expensive security infrastructure. For example, in April 2021, Innovatrics, a European provider of multimodal biometric solutions, introduced a cloud API to make its remote digital identity verification, with liveness detection and selfie biometrics, more accessible to businesses and developers.

Dominating Companies in Digital Identity Solutions Market

• NEC Corporation
• SAMSUNG SDS
• THALES
• GBG
• TELUS
• TESSI
• DAON
• IDEMIA
• FORGEROCK
• IMAGEWARE
• JUMIO
• IPROOV
• ID R&D
• REFINITIV
• ONESPAN
• SMARTMATIC
• FREJA EID GROUP
• VINTEGRIS
• AU10TIX
• SIGNICAT AS
• RAULWALTER
• DUO SECURITY
• SYNTIZEN
• HASHCASH CONSULTANT
• GOOD DIGITAL IDENTITY

Recent Developments in Digital Identity Solutions Market

• In May 2022, Microsoft announced the acquisition of ID.me, a digital identity verification provider that allows users to prove their identity online and access various services.
• In December 2021, Okta, a leading identity management platform, announced its acquisition of Auth0, a developer-focused identity platform, in a deal worth $6.5 billion. This acquisition aimed to bring together two powerful digital identity solution providers to offer a more comprehensive service to their customers.
• In November 2021, Ping Identity, a provider of digital identity management solutions, announced a partnership with Amazon Web Services (AWS) to provide customers with secure access to cloud services. This partnership aimed to simplify the integration of digital identity solutions for customers using AWS cloud services.
• In August 2020, ForgeRock, an identity and access management solutions provider, announced a strategic partnership with Google Cloud to provide customers with a secure and flexible digital identity solution that integrates with Google Cloud services.
• In January 2020, Entrust Datacard, a provider of trusted identity and secure issuance solutions, acquired Safelayer Secure Communications, a Spanish-based digital identity solutions provider. This acquisition aimed to expand Entrust Datacard's offerings in the digital identity space and increase its presence in the European market.
• In February 2022, Veriff, an Estonian-based identity verification company, announced a strategic partnership with Airwallex, a cross-border payment platform. This partnership aimed to provide Airwallex customers with a more streamlined onboarding experience through Veriff's digital identity verification solution.
• In October 2021, Experian, a global information services company, announced the acquisition of Avoco Secure, a digital identity verification provider. This acquisition aimed to expand Experian's capabilities in the digital identity space and provide more comprehensive solutions to its customers.
• In July 2021, ForgeRock announced its acquisition of IoT security provider, IoT.nxt. This acquisition aimed to enhance ForgeRock's capabilities in the IoT space and provide customers with a more comprehensive digital identity solution that includes IoT devices.
• In May 2021, Idemia, a global leader in identity verification and authentication, announced a partnership with Microsoft to develop a secure digital identity solution. This partnership aimed to leverage Idemia's expertise in biometrics and identity verification with Microsoft's expertise in cloud computing to create a more secure and comprehensive digital identity solution.
• In October 2020, Jumio, a leading identity verification provider, announced a partnership with Microsoft Azure to provide customers with a more seamless integration of Jumio's identity verification solutions with Azure's cloud services.

In conclusion, digital identity solutions are becoming increasingly important in today's digital landscape. They provide secure and reliable methods for verifying the identities of individuals and entities, and they help to mitigate the risks of identity theft and fraud. They also have a significant impact on various industries, including finance, healthcare, and e-commerce, by enabling secure transactions and improving customer experiences. As the digital landscape continues to evolve, digital identity solutions will play an increasingly important role in protecting user privacy and securing online transactions.