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The market dynamics of digital identity in the Banking, Financial Services, and Insurance (BFSI) sector are now in the middle of great changes caused by the technological progress, reginal requirements and the changes of customer’s expectations. The BFSI industry has been transforming into digital ones in current years just to secure the most advanced identity solutions for themselves, which helps make processes more efficient and improve customer experience
The regulatory compliance and data security requirements that are becoming ever-more-stringent are other important factors likely to have significant influence on the market patterns. Impacted by the laws like GDPR, PSD2 and KYC the financial institutions are thus driven to invest in the powerful and dependable means of digital identity to help them be compliant and shield their financial data. The result of this flood of online activity is a dramatic push in advance auth, biometric recognition and identity verification technics to protect the users from different risks and fraud.
In addition, the desire for convenient and reliable digital banking consumes from robust identity verification procedures have resulted in an escalation in the need for frictionless identity verification processes. This out render BFSI players to adopt into biometrics, artificial intelligence, and blockchain as the technologies are evolving fast. This enable swift and secure customer onboarding, account access, and transaction authorization. This gradual change to the landscape of identity solutions for convenience but with security is, therefore, bringing about a competitiveness that calls for organizations to be clear and transparent by way of security of login, proper authentication, or somehow following the privacy-friendly path.
In addition, banking being open and digital channels spread progressively has made the digital identity management an even more essential and urgent topic. With the progressive convergence of community and service boundaries by third-party agencies, there is an emergence of a central ground for identification. The technology has, in turn, lit the fuse for federated identity management systems, decentralized identity solutions, and digital wallets that render frictionless identity portability and interoperability across the multitude of financial services and ecosystems.
Further in the scope, the COVID-19 pandemic has sped up digital transformations in the BFSI sector, and therefore the demand for secure, contactless, and remote identity solutions has gained significantly. Many online transactions, new-customer accounts opening, and other digital customer meetings have evidenced the necessity to create robust and flexible digital identity infrastructures that will be able to withstand all adverse conditions. Consequently, BFSI sectors are adapting AI fueled-fraud detection, behavioral biometrics, and continuous authentication techniques which serve as the safeguard of their digital identity from these emerging threats.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Market Size Value In 2022 | USD 29.79 Billion |
| Market Size Value In 2023 | USD 36.85 Billion |
| Growth Rate | 20.5% (2023-2032) |
Digital Identity in BFSI Market Highlights:
Digital Identity in BFSI Market Overview
Digital Identity in BFSI Market Size was valued at USD 29.79 Billion in 2022. The Digital Identity in BFSI market industry is projected to grow from USD 36.85 Billion in 2023 to USD 197.9 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 20.5% during the forecast period (2023 - 2032). Better customer service, quicker access to financial products, lowered risks of identity fraud and spoofing, and avoiding costly data maintenance, are the key market drivers enhancing the market growth.
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Digital Identity in BFSI Market Trends
Digital identification providing a new frontier in value creation for individuals is driving the market growth
Digital identification, sometimes known as "digital ID," opens up new possibilities for people and organizations all around the world to create value. Without a legally valid form of identity, almost a billion individuals worldwide risk being excluded from government assistance, health care, financial services, the job market, the capacity to protect property rights, and the opportunity to start a business. Digital ID can also benefit the remaining 6.6 billion people on the planet, who either lack an ID or only have limited access to online services or who are online users but find it difficult to manage their digital footprints securely and effectively.
A good digital ID offers high levels of assurance for verification and authentication, uniqueness, individual consent, privacy protection for users, and control over personal data. If done right, this can benefit both people and entire societies. By 2030, countries implementing digital ID may unlock value equal to 3 to 13% of GDP, according to research from the McKinsey Global Institute. eID in Estonia and Aadhaar in India are two examples of government-led digital ID systems that have already been implemented with some success in a few nations. Other examples include financial institution-led digital ID systems SecureKey Concierge in Canada and BankID in Sweden.
Digital ID can enhance customer satisfaction, increase productivity, and enhance risk management for institutions. For instance, in the UK, around 25% of all bank applications are abandoned because of problems with the registration procedure, which digital ID might assist to ease by providing more convenient authentication. One survey indicated that nearly 30% of calls to banks' call centers were requests for account access due to misplaced or forgotten passwords. Digital ID can also enhance the quality and minimize the cost of continuous customer support. Additionally, banks, as employers, can utilize digital ID to extend and enhance talent matching and automate employee identification, which will help them fill open positions more quickly with candidates who are more qualified. Thus, driving the Digital Identity in BFSI market revenue.
Digital Identity in BFSI Market Segment Insights
Digital Identity in BFSI Offering Insights
The Digital Identity in BFSI Market segmentation, based on offering, includes solutions and services. Solutions segment dominated the global market in 2022. The goal of digital identification systems is to improve customer satisfaction while simultaneously boosting security, cutting costs, and automating business processes.
Digital Identity in BFSI Solution Type Insights
The Digital Identity in BFSI Market segmentation, based on solution type, includes identity verification, authentication, identity lifecycle management, and other solution types. The authentication segment dominated the Digital Identity in BFSI Market in 2022. A new trend in the digital sector is the use of cloud-based digital identification solutions. Furthermore, demand for cloud-based digital identification solutions is increasing due to expanding usage among small, medium, and large organizations. This data is used to calculate an occupant's cost based on how much energy they use over the course of a year, month, or four weeks. Additionally, it lowers the indirect expenses associated with money recovery for property managers.
Digital Identity in BFSI Identity Type Insights
The Digital Identity in BFSI Market segmentation, based on identity type, includes biometric and non-biometric. Biometric segment dominated the Digital Identity in BFSI Market in 2022. Biometric software enables communication and operation between biometric devices, computers, and networks to which they are connected. Additionally, it enables successful connection and compatibility across numerous applications running on diverse operating systems. Software is an essential part of biometric systems.
Digital Identity in BFSI Organization Size Insights
The Digital Identity in BFSI Market segmentation, based on organization size, includes large organization and SMEs. Large organization segment dominated the global market in 2022. Large corporations are rethinking their security policies and architecture to incorporate digital identity solutions in order to safeguard crucial assets from various cyber-attacks. Large businesses were early adopters of digital identification solutions because they have a sizable workforce and accompanying networking equipment that are susceptible to identity-related risk.
Figure 1: Digital Identity in BFSI Market, by Organization Size, 2022 & 2032 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Digital Identity in BFSI Regional Insights
By region, the study provides the market insights into North America, Europe, Asia-Pacific and Rest of the World. The North America Digital Identity in BFSI Market dominated this market in 2022 (45.80%). In the North American region, a number of significant market companies operate, offering cutting-edge solutions to all of the region's industry verticals. Thus, in addition to physical presence, strategic investments, collaborations, and significant R&D operations are contributing to the widespread adoption of digital identification solutions. Further, the U.S. Digital Identity in BFSI market held the largest market share, and the Canada Digital Identity in BFSI market was the fastest growing market in the North America region.
Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
Figure 2: DIGITAL IDENTITY IN BFSI MARKET SHARE BY REGION 2022 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Europe Digital Identity in BFSI market accounted for the healthy market share in 2022. Europe is regarded as the considerably mature market in terms of adopting digital identity solutions due to factors like the rise in identity and authentication frauds and the presence of important suppliers in the region. Further, the German Digital Identity in BFSI market held the largest market share, and the U.K Digital Identity in BFSI market was the fastest growing market in the European region.
The Asia Pacific Digital Identity in BFSI market is expected to register significant growth from 2023 to 2032. This is because emerging economies in the area like China and India are increasingly adopting cutting-edge solutions across the majority of business verticals. The regional market growth is also anticipated to be supported during the forecast period by the increasing adoption of smart devices and increasing internet penetration. The expansion of digital identity solutions in this region is also anticipated to be aided by the growing government initiatives and investments to support smart solutions. Moreover, China’s Digital Identity in BFSI market held the largest market share, and the Indian Digital Identity in BFSI market was the fastest growing market in the Asia-Pacific region.
Digital Identity in BFSI Key Market Players & Competitive Insights
Leading market players are investing heavily in research and development in order to expand their product lines, which will help the Digital Identity in BFSI market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, Digital Identity in BFSI Industry must offer cost-effective items.
Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global Digital Identity in BFSI Industry to benefit clients and increase the market Solution Type. In recent years, the Digital Identity in BFSI Industry has offered some of the most significant advantages to medicine. Major players in the Digital Identity in BFSI market, including NEC, Samsung SDS, Thales, Telus, IDEMIA, GBG, Tessi, Daon, ForgeRock, ImageWare, Jumio, iProov, ID R&D, Refinitiv, OneSpan, Smartmatic, Freja EID Group, Vintegris, AU10TIX, Signicat, Duo Security, Syntizen, and Hashcash Consultant Good Digital Identity, are attempting to increase market demand by investing in research and development operations.
IDEMIA is a company that offers enhanced identities for the public security, telecommunications, and financial industries. Through identification, authentication, embedded biometric modules, and digital identities, the company offers securing banking and payments, telecom connectivity, physical locations, digital assets, as well as public identity, giving customers identities that ensure privacy and security, verifiable transactions, and communication.
A provider of identification data intelligence services is GB Group PLC (GB Group). The business provides solutions for fraud, risk, and compliance, including services for sharing and accessing fraud data, document validation, application fraud detection, and consumer behavior monitoring. Additionally, it provides location and customer intelligence services, such as worldwide address, global phone, global bank account, and global email validation services. The GB Group provides solutions for ID (identification document) verification, registration, engagement, solutions for ID tracing and investigation, solutions for ID employ and compliance, and solutions for ID fraud and risk management. China, the Philippines, Vietnam, Thailand, Indonesia, Malaysia, Australia, Spain, Germany, Turkey, and the US are among the countries where the organization conducts business. Chester, England, is home to the GB Group's headquarters in the UK.
Key Companies in the Digital Identity in BFSI market include
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NEC
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Samsung SDS
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Thales
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Telus
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IDEMIA
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GBG
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Tessi
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Daon
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ForgeRock
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ImageWare
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Jumio
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iProov
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ID R&D
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Refinitiv
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OneSpan
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Smartmatic
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Freja EID Group
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Vintegris
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AU10TIX
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Signicat
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Duo Security
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Syntizen
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Hashcash Consultant
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Good Digital Identity
Digital Identity in BFSI Industry Developments
March 2023: The Lloyds Banking Group committed £10 million in the digital identity company Yoti to support the creation of cutting-edge technology that would keep people safe online, battle the growing concerns of identity fraud, and give people more control over their personal data.
Digital Identity in BFSI Market Segmentation
Digital Identity in BFSI Offering Outlook
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Solutions
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Services
Digital Identity in BFSI Solution Type Outlook
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Identity Verification
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Authentication
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Identity Lifecycle Management
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Other Solution Types
Digital Identity in BFSI Identity Type Outlook
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Biometric
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Non-biometric
Digital Identity in BFSI Organization Size Outlook
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Large Organization
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SMEs
Digital Identity in BFSI Regional Outlook
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North America
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US
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Canada
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Europe
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Germany
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France
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UK
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Italy
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Spain
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Rest of Europe
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Asia-Pacific
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China
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Japan
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India
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Australia
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South Korea
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Australia
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Rest of Asia-Pacific
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Rest of the World
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Middle East
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Africa
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Latin America
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