Identity Verification Market Growth, Opportunities Business Scenario, Share, Growth Size, Scope, Key Segments and Forecast to 2027
MarketsandMarkets forecasts the global identity verification market size estimated to be USD 9.5 billion in 2022 and is projected to reach USD 18.6 billion by 2027, at a CAGR of 14.4% during the forecast period. Globally increasing identity thefts with increasing risks of fraudster access, stringent government regulations, and growing digitalization initiatives are key factors driving the market growth.
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What is Identity Verification?
Identity verification is a process of verifying the individual’s identity by using publicly or privately available databases. The solutions offered in the identity verification market help organizations verify an individual’s identity quickly and easily, thereby actively improving customer experience and complying with privacy laws, Anti Money Laundering (AML) legislation, and Know Your Customer (KYC) requirements.
By component, the services segment to grow with the highest CAGR during the forecast period
The identity verification market is segmented into solutions and services on the basis of components. The services segment has the highest CAGR because of the increase in smartphone penetration and the adoption of online services that have prompted businesses and governments to use digital identities for identity verification. Also, the ability of an online identity verification service to process and approve customers quickly and without friction is boosting the growth of the services segment. Furthermore, a number of educational institutions have begun including online identity verification services in their online curriculum. These services may be used to authenticate students remotely when they sign up for or take part in online classes. Thus, leading to growth in the services segment.
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By type, the biometrics segment to hold a larger market size during the forecast period
The identity verification market is segmented into biometric and non-biometric based on the type. The biometrics market is anticipated to be driven by the rise in digitization, which is accompanied by an increase in online services and other organizational activities. Currently, the manufacturers of biometric systems are concentrating more on creating cutting-edge contactless solutions based on technologies like vein, iris, and 3D face recognition. As a result, the market for contactless biometric systems is anticipated to expand more rapidly post-pandemic. Additionally, the need for consumers for easy onboarding, compliance management, and fraud protection is driving considerable growth in the biometric system segment of the market.
Unique Features in the Identity Verification Market
This market is distinct in that it places a high priority on international compliance standards. Identity verification companies must abide by a complicated network of international and regional norms and standards due to the sensitivity of personal data. These include the AML/KYC rules in place all over the world, the GDPR in Europe, and HIPAA in the United States. In this business, compliance is a major concern, which has prompted the creation of reliable and flexible verification solutions.
An important development in the identity verification business is the advent of remote identity verification. The market has developed strategies that enable users to verify their identification online without a physical presence in response to the growth of remote work and digital services. In a post-pandemic environment, these remote identity verification technologies are highly relevant, safe, and practical.
Additionally, machine learning and artificial intelligence (AI) integration are crucial to the identity verification sector. These technological advancements are essential for advancing fraud detection over time. In order to maintain reliable and current verification processes, AI and machine learning discover suspicious patterns and adapt to new threats in real time.
In the industry for identity verification, blockchain technology is also gaining traction. Enhancing data security and giving people more control over their identification data are its two main goals. Blockchain technology enables people to control who has access to their identity data and keep ownership of it, in line with developing privacy concerns and legal requirements.
Last but not least, the identity verification market must have scalability and adaptability. These systems need to be adaptable enough to handle a variety of businesses and use cases, from social networking and e-commerce to financial services and healthcare. One distinguishing quality of them is their capacity to adapt to changing requirements.
Major Highlights of the Identity Verification Market
The identity verification market also emphasises the importance of upholding local and international compliance standards. Identity verification companies must make sure that their solutions adhere to the strict guidelines set forth by legislation like the GDPR in Europe, HIPAA in the United States, and Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements that are in place everywhere. The market’s emphasis on data security, privacy, and legal compliance is reflected in this commitment.
Another important element of this market is biometric innovation. Facial recognition, fingerprint scanning, iris scanning, and voice recognition are among the cutting-edge technology being seamlessly incorporated into identity verification processes. These biometric technologies provide a secure and user-friendly manner of validating an individual’s identity, minimising reliance on traditional and often insecure methods such as passwords.
The market has embraced remote identity verification solutions in response to the growth of remote work and the increasing demand for digital services. Users can now verify their identification online without having to be present in person thanks to these advancements. These technologies are quickly altering the identity verification environment with a blend of security, ease, and relevance in a post-pandemic world.
One cannot exaggerate how important machine learning and artificial intelligence (AI) are to the identity verification sector. Improving fraud detection relies heavily on these tools. In order to maintain reliable and current verification processes, AI and ML algorithms can detect suspicious patterns and instantly adapt to new dangers.
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Competitive Overview:
The identity verification market is led by some of the globally established players, such as 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), and others. Partnerships, agreements, collaboration, acquisitions, and product developments are some of the various growth strategies by these players to increase their market presence.
Experian (Ireland) is a market leader in the world for consumer and commercial credit reporting and marketing services. The company offers products and services for managing credit risk, safeguarding clients from fraud and identity theft, and analyzing the market and consumer demand. Its four primary business segments are consumer services, marketing services, decision analytics, and credit services. It helps its clients understand and control their financial status and safeguards them against fraud and identity theft. It operates in the healthcare, retail, financial institutions, telecommunications, and automotive industries. Through collaborations and acquisitions, the firm has grown its portfolio and market presence with companies such as Prove Identity (US), Citadel API (US), Global Data Consortium (US), Microsoft (US), and many more.
Thales (France) specializes in a system that controls digital identities and safeguards “Next-Generation Digital Security” assets to secure the global shift toward digital commerce, border management, and IoT. Thales Group provides identity verification services that include features including document verification, face verification, and onboarding. Thales acquired Gemalto in 2019 and utilized Gemalto’s biometric security expertise.
Thales specializes in data encryption, tokenization, data masking, Hardware Security Module (HSM) management, key management, and digital signature. Thales Group’s identity management and data security solutions assist banks in exchanging cash, maintaining border control, and a variety of other applications.
Apart from large vendors, some other players, such as HyperVerge, AU10TIX, Innovatrics, Intellicheck, Signicat, and SecureKey Technologies are also evolving in the identity verification market. Intellicheck is dedicated to providing the finest identity verification solutions with an extremely effective approach, identifying false IDs 99.9% of the time. The company offers mobile, browser, and scanner solutions that simplify reaping the benefits of accurate and rapid identity verification. The solutions offered by the company include Preventing Fraud, Know Your Customer, Age Verification, and Intellicheck Identity Platform, amongst other things.
According to MnM’s approach to evaluating the market, the majority of businesses use inorganic growth tactics to hold onto their market share. In 2020–2021, the number of transactions rose by 50–60%. These agreements cover alliances, acquisitions, collaborations, and partnerships together. Product launches and corporate growth activities abruptly decreased as a result of the COVID-19 pandemic. On the other hand, organizations are anticipated to embrace organic growth strategies starting in 2021 to provide end consumers with identity verification solutions and services, which would assist businesses in boosting market revenue.
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