Identity Verification Market size is forecast to reach $11866.74 million by 2026, growing at a CAGR 14.05% from 2021 to 2026. Acceptance of digital payment method is predicted to increase following the COVID-19 outbreak and play a larger role in the long run. Governments and regulatory authorities are restricting the use of currency, which is considered as a potential carrier of the virus. For example, during a government-imposed shutdown, the use of currency in the United Kingdom was halved. Due to the COVID-19 epidemic in the United Kingdom, FATF guidelines have allowed consumers to transmit selfies and email scanned ID documents as proof of identification. Increased digitization initiatives, an increase in fraudulent activities and identity theft over the last decade, and an increase in use cases of digital identities across sectors are the primary reasons driving the identity verification industry. Furthermore, initiatives by governments and companies focusing on digitalization and the use of new technologies such as Artificial Intelligence, Machine Learning and automation in identity verification systems would present lucrative opportunities for identity verification vendors and will help to grow identity verification industry.
Identity Verification Market Segment Analysis – By Solution
By solution, the identification verification market is segmented into Digital Identity Verification, ID Verification, Identity Authentication, Document Verification, AML Screening and Monitoring, Business Verification, Others. Among them, the Digital identity verification segment is expected to grow at a highest CAGR 17.20% over the forecast period. Digital identity verification is a process that validates a person’s traits and verifies their identity using computer technology. Businesses in every industry today are moving to digital models. From banking, to shopping, to travel, companies are using digital infrastructure for the purpose of identity verification of their customers as well as fraudsters to avoid cybercrimes. As a result, high adoption of identification verification solution is witnessed. For Instance: In August 2020, Citi Ventures and Wells Fargo Strategic Capital joined a $35 million funding round for machine learning-based digital identity verification startup called Socure. This investment is aimed at the development of Socure’s digital identification technology that reduces fraud for online new account openings by up to 95% with false positives of better than 1:1, while cutting manual review rates by as much as 90%. Such investments are anticipated to boost the digital identification market during the forecast period 2021 – 2026.
Identity Verification Market Segment Analysis – By End-User
By end-user, the identification verification market is segmented into BFSI, Government and Defence, Retail, Healthcare, IT & Telecom, Entertainment and Gaming, Transportation and Mobility, Energy & Utilities, Hospitality, Others. Out of which, IT & Telecom is projected to grow during the forecast period at the highest CAGR 16.42%. With increase in advancements in technology, there has been increasing risks of data privacy, fraud protection and security. Telecommunication sector is directly or indirectly associated with several essential services such as national security, health, finance, and others. Adoption of identity verification in this sector propels the market. Criminals often use fabricated identities to secure telecom services. Telecom fraud involves identity theft or the use of fabricated identities during onboarding. This has resulted in adoption of identity verification in IT & telecom sector. According to GSMA (Global System for Mobile Communications), since early 2020, the governments in 155 countries need customers to provide proof of identification before registering for and buying a SIM, which also applies to e-SIMs and related products. This has been driving the identity verification market in telecom sector.
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Identity Verification Market Segment Analysis – By Geography
APAC is expected to hold a large share of Identity Verification market and is expected to grow at a CAGR 15.52%. With the early acceptance of new technology, APAC is becoming technologically equipped. Factors such as initiatives taken by the government to combat identity-related fraud, particularly for strengthening eKYC to verify identities, compliance regulations initiated by countries, rising demand for cloud-based identity verification, and rising identity-related cyber-attacks are driving revenue growth in this region. More Asian companies are incorporating real-time liveness detection capabilities into their eKYC systems to ensure the remote user is physically present and to protect against spoofing attempts. As the digital economy expands, multi-factor biometric identity verification and certified liveness detection technologies will adapt to better serve and solve the changing security needs of consumers and businesses. For Instance: India had a tremendous growth in cybercrime registration, ranking fifth overall in terms of DNS hijacks. According to Gemalto, India accounts for 37% of global breaches in terms of compromised or stolen records. With the rising amount of malware and ransomware attacks in the country, it is clear that identity verification solutions will play a crucial role in driving their adoption.
Identity Verification Market Drivers
Increasing Number of Cyber-Thefts, Money Laundering and Other Malicious Activities:
The Consumer Sentinel Network, maintained by the Federal Trade Commission (FTC) of UK, tracks consumer fraud and identity theft complaints that have been filed with federal, state and local law enforcement agencies and private organizations. Of the 3.2 million identity theft and fraud reports received in 2019, 1.7 million were fraud-related, about 900,000 were other consumer complaints and about 651,000 were identity theft complaints as stated by CST. Due to the exponential increase in such malicious activities, various businesses, financial institutions and other end users across the globe are adopting identity verification solutions, which is one of the major factor driving the market.
Rising Digitalization among Various End User Verticals
Wide–scale penetration of digitalization has brought to light so many identity-related frauds and urged corporations to take stringent steps to protect them. Identity verification has become a critical component due to mandatory verification of individual’s identity especially in applications such as border controls and access to digital services. Moreover, enterprises across the world are increasingly spending on the digitization of their businesses, including their payment processes. For Instance: according to a survey by Visa, over 80% of consumers mentioned digital-related benefits as motivating factors to shop. As the digital economy grows, multi-factor biometric identity verification and certified liveness detection technologies are evolving accordingly, to better serve and address the changing security needs of business and consumers.
Identity Verification Market Challenges
Presence of inefficient and costly identity regimes
Online identity authentication is only starting to pick up momentum as a digital service, and there are many versions of the ID concept and how they are checked. The basic idea behind screening identities is relatively clear, but the principle of digital identity authentication has acquired more than one connotation, as online transactions have grown in complexity and volume. Users also find it uncomfortable to include information for screening purposes for various sources and platforms. Basic credentials, such as name, address and official ID number, are often not sufficient to recognise an entity and construct relevant profiles. Therefore, service providers need to behave responsibly to make identity authentication processes more transparent in order to collect relevant data. This is one of the major restraining factors of the identity verification market. In addition, the development and administration costs can be very high for an identity card scheme. For the discarded UK ID card, estimates from £30 ($ 45 in the United States) to £ 90 or even higher were proposed. The identification card is directly paid by each user up to £6 in countries such as Chile; the ID card is free in other countries such as France or Venezuela. This, however does not reveal the true cost of issuing ID cards, as taxpayers in general will bear some extra costs.
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in Identity Verification Market. Identity Verification Market is expected to be dominated by Identity Verification top 10 companies such as GBG, Idemia, Experian, Equifax, Transunion, LexisNexis, Thales Group, Acuant, and many more.
In June 2020, GBG partnered with CredoLab to easily and confidently analyse the creditworthiness of any Indonesian citizen, including the unbanked and underbanked for CredoLab by using GBG’s digital/AI-driven risk management.
In March 2020, the government of Singapore is preparing for the transition to a facial recognition program, which will eliminate the need for ID cards by 2022.
Surge in number of cyber-crimes and stringent regulation relevant to data protection and identity theft are the major factors propelling the growth of identity verification market during the forecast period.
Digital identification has the potential to multiply future economic value across multiple regions. Digital identity schemes play a vital role in the development of innovative products and solutions, as well as in drastically lowering operational costs for relying parties.
With technological improvements, there has been an increase in the risks of data privacy, fraud prevention, and security. The telecommunications industry is directly or indirectly linked to a variety of critical services, including national security, health, finance, and others. The market is being propelled by the adoption of identity verification in this industry.
As a result of its early acceptance of new technologies, Asia Pacific is predicted to contribute to the fastest-growing region with the greatest CAGR during the projection period.
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