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The identity verification market is witnessing a significant surge in growth, driven by various market factors that play a crucial role in shaping its landscape. One of the primary drivers is the escalating need for robust security measures in the face of increasing cyber threats and identity-related fraud. As businesses and individuals become more interconnected digitally, the demand for reliable identity verification solutions has intensified. Government regulations and compliance requirements also contribute significantly to the dynamics of the Identity Verification Market.
Implementing stringent data protection laws and Know Your Customer (KYC) regulations across various industries, particularly in finance and healthcare, propels the adoption of advanced identity verification technologies. Companies are compelled to invest in solutions that ensure compliance and enhance their systems' overall security. The global shift towards a more digital and remote-centric lifestyle is another pivotal factor influencing the Identity Verification Market. With the rise of online transactions, digital onboarding processes, and e-commerce platforms, seamless and secure identity verification has become paramount. This shift is further accelerated by the ongoing global events, such as the COVID-19 pandemic, which underscore the necessity for contactless and remote authentication methods.
Technological advances also play a crucial role in shaping the identity verification landscape. The market is witnessing a continuous evolution of biometric technologies, artificial intelligence, and machine learning algorithms, which enhance the accuracy and efficiency of identity verification processes. The integration of facial recognition, fingerprint scanning, and behavioral analytics has become commonplace, providing a multi-layered approach to identity verification. Moreover, the increasing awareness and acceptance of identity verification services among businesses of all sizes contribute to market expansion. Small and medium enterprises, in particular, recognize the importance of protecting their digital assets and customer data. This growing awareness drives adopting identity verification solutions as a proactive measure against potential threats, fostering a competitive market landscape. Collaborations and partnerships within the industry also significantly impact the Identity Verification Market.
As the demand for comprehensive and integrated solutions rises, companies are forming strategic alliances to offer end-to-end identity verification services. This collaborative approach allows businesses to leverage the expertise of multiple entities, creating synergies that result in more robust and versatile solutions. However, challenges such as the balance between security and user experience and concerns regarding privacy continue to influence the market dynamics. Striking the right equilibrium between stringent security measures and user-friendly experiences remains a constant challenge for identity verification solution providers. Additionally, addressing privacy concerns and ensuring compliance with evolving regulations pose ongoing challenges that industry players must navigate.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Market Size Value In 2022 | USD 13.83 Billion |
| Growth Rate | 14.30% (2022-2030) |
Identity Verification Market Highlights:
Identity Verification Market Overview
Identity Verification Market Size was valued at USD 12.1 billion in 2021. The identity verification market industry is projected to grow from USD 13.83 billion in 2022 to USD 35.25 billion by 2030, exhibiting a compound annual growth rate (CAGR) of 14.30% during the forecast period (2024 - 2030).
Growing digitization initiatives and increasing uses of digital identities among verticals are the key market drivers enhancing market growth.
Figure 1: Identity Verification Market Size, 2023-2030 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Identity Verification Market Trends
Increasing Internet and Digital Literacy to boost the market growth
The expansion of smart services businesses provide to their customers is expected to increase the need for new trends in virtual identity verification. Business identity verification in international marketplaces has increased due to an increase in online activities, including bank transactions and online onboarding. The worldwide formation and growth of third-party verification businesses result from the demand for internet services. These businesses have online ID verification capabilities. People are becoming more technologically savvy worldwide, enabling them to use online services.
Businesses increasingly rely on digital data and computer networks for daily business operations and commercial activity. Cybercriminals exploit credentials that have been stolen to open phony accounts for online merchants, internet payments, and mobile phones. According to ITRC, 577 cyber events compromised 15.3 million records in 2019. As crooks improve, identity theft is rising. More losses due to account fraud are occurring due to cybercriminals targeting retirement accounts and reward and loyalty programs. The market will expand as identity theft and data breaches rise.
The banking industry's expanding partnerships also accelerate the market's growth rate. For instance, in February of this year, Shufti Pro, an AI-powered verification service provider, was integrated into the client manager and client portal of FYNXT, a worldwide FinTech company that offers digital solutions. Without leaving the platform, brokers using FYNXT can access Shufti Pro IDV services. A financial technology platform called FYNXT provides straightforward, affordable, and transparent payment options for remittance, wealth management, and multi-asset management, enhancing the identity verification market CAGR across the globe in recent years.
In addition, the use of fake identities in fraud is rising. In the majority of any area worldwide, 61% of merchants reported greater rates of this type of fraud in APAC. In APAC, 84% of businesses reported revenue losses owing to payment fraud; in Singapore, this percentage is significantly higher, with 90% reporting losses. In 2020, 57% of retailers in APAC predicted significant costs associated with victims of payment theft, another factor driving the growth of the identity verification market revenue.
Identity Verification Market Segment Insights
Identity Verification Component Insights
The identity verification market segmentation, based on components, includes solutions and services. The solution segment held the majority share in 2021 of the identity verification market revenue. Digital identity verification, ID verification, and identity authentication are the three subcategories of the solution. Following the adoption of additional digital platforms by the private and public sectors, including border controls and digital service access, digital verification has become a crucial component.
Identity Verification Type Insights
The identity verification market segmentation, based on type, includes biometrics and non-biometrics. The biometrics segment dominated the market in 2021 and is projected to be the faster-growing segment during the forecast period 2022-2030. The most popular form of identity verification is biometrics, which confirms a person's authenticity based on one or more biological characteristics. Using fingerprints, iris and retinal patterns, and other biometric verification techniques is widespread, positively impacting the market growth.
Identity Verification Deployment Mode Insights
The identity verification market data has been bifurcated by deployment mode into on-premises and cloud. The on-premises segment dominated the market in 2021 and is projected to be the faster-growing segment during the forecast period 2022-2030. An on-premises service allows the business to authenticate its clientele and keep its data on its servers. After a one-time installation, no outside party can access the customer data. Therefore, there is no need for a second vendor or service provider.
Figure 2: Identity Verification Market by Deployment Mode, 2021 & 2030 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Identity Verification Organization Size Insights
Based on Organization Size, the identity verification industry has been segmented into SMEs and large enterprises. Large enterprises held the largest segment share in 2021. Large organizations have chosen identity verification systems because of rising fraud, money laundering, processing of high-risk transactions, identity theft, cost-cutting on manual operations, and compliance with various laws. Identity verification services are being used by many businesses to increase the consistency of their security tools and platforms.
Identity Verification Verticals Insights
Based on Verticals, the industry has been segmented into BFSI, government & defense, healthcare & life sciences, retail & e-commerce, IT & ITeS, energy & utilities, and others (education, travel, and gaming). The BFSI segment held the largest share in 2021. The necessity for identity verification is growing ly due to the rising digitization of banking processes, such as digital onboarding and digital payments, to enhance the client experience.
Identity Verification Regional Insights
By Region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. North America identity verification market accounted for USD 5.31 billion in 2021 and is expected to exhibit a significant CAGR growth during the study period. It is a technologically advanced region with many early adopters and important market participants. The expansion of government projects like smart cities, smart infrastructure, and digital identification-based driver's licenses is anticipated to fuel the demand for identity verification.
Further, the major countries studied in the market report are: The U.S., Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
Figure 3: IDENTITY VERIFICATION MARKET SHARE BY REGION 2021 (%)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Europe identity verification market accounts for the second-largest market share. The nation has established itself as one of the most promising markets in the world for creating AI-based identity verification solutions because of numerous innovations and research institutes for artificial intelligence. Further, the Germany identity verification market held the largest market share, and the UK identity verification market was the fastest-growing market in the European region.
The Asia-Pacific Identity Verification Market is expected to grow at the fastest CAGR from 2022 to 2030. Government attempts to prevent identity-related fraud and strengthen eKYC to authenticate identities are some of the causes driving the growth. Moreover, China identity verification market held the largest market share, and the India identity verification market was the fastest-growing market in the Asia-Pacific region.
Identity Verification Key Market Players & Competitive Insights
Major market players are spending a lot of money on R&D to increase their product lines, which will help the identity verification market grow even more. Market participants are also taking various strategic initiatives to grow their footprint, with key market developments such as new product launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the identity verification industry must offer cost-effective items to expand and survive in an increasingly competitive and rising market environment.
One of the primary business strategies manufacturers adopt in the identity verification industry to benefit clients and expand the market sector is manufacturing locally to reduce operating costs. In recent years, the identity verification industry has provided some of the most significant benefits. The identity verification market major player such as IDEMIA (France), Jumio (US), Experian (Ireland), GBG (UK), and others are working on expanding the market demand by investing in research and development activities.
GBG is a company that verifies identities, gathers location data, and guards against fraud. GBG provides enterprises with tools and data to validate and verify the location and identity of their clients. The data used to create GBG products comes from more than 200 international partners. In August 2020, GBG collaborated with Contemi Solutions to fully automate its Know Your Client (KYC) and Anti Money Laundering (AML) checks for Contemi clients and financial sector organizations.
Also, the aerospace, defense, transportation, and security industries use the electrical systems, gadgets, and equipment that the French multinational Thales Group designs, develops, and produces. In October 2020, a secure biometric solution for customer onboarding, the new identity verification suite, was unveiled by Thales Group. Confirming the legitimacy of the documents reduces the danger of ID fraud and enables service providers to digitally confirm the identities of new clients.
Key Companies in the identity verification market include
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IDEMIA (France)
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Jumio (US)
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Experian (Ireland)
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GBG (UK)
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Equifax (US)
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Mitek Systems (US)
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Thales Group (France)
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LexisNexis Risk Solutions (US)
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Onfido (UK)
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Trulioo (Canada)
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Acuant (US)
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TransUnion (US)
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AU10TIX (Israel)
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IDology (US)
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Innovatrics (Slovakia)
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Idenfy (Lithuania)
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WebID (Germany)
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IDnow (Germany)
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Applied Recognition (Canada)
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Signicat (Norway)
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SecureKey (Canada)
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IDfy (India)
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Authenteq (Iceland)
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Veri5Digital (India)
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PXL Vision (Switzerland)
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IDMERIT(US)
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Shufti Pro (UK)
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Signzy (India)
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Passbase (Germany), among others
Identity Verification Industry Developments
November 2023 - IDVerse, a digital identification verification provider, has partnered with the Mastercard Engage Partner Program in order to deliver a complete seamless digital-first experience. As an eKYC provider in this program, IDVerse is going to provide Mastercard customers with fully automated global identity verification. It would enable the development and deployment of onboarding solutions for a fast-paced world that thinks digitally.
May 2023 - Onfido announced its acquisition of Airside Mobile, Inc., a worldwide private digital identity-sharing technology provider. Combining privacy-based identity management technology from Airside with Onfido’s innovative means of authentication created a “verify once, use anywhere” regime, allowing users to carry their own digital profile on mobile and get new offerings without re-verification. These changes should redefine what it means to verify one’s identity across internet platforms, travel companies, financial institutions’ electronic sales, and more.
October 2023 - Two additional fraud mitigation tools are being launched by Veriff at the market to enhance its IDV protection portfolio. This company’s newly designed packages utilize strong machine-learning models as well as behavioral insights integrated with fraud detection expertise provided by Veriff, which enhances organizations’ ability to handle continuously changing fraudulent activities.
October 2023 - GBG-owned IDology has expanded its portfolio of gaming solutions designed to drive player acquisition while staying compliant with state and federal regulations against money laundering and fraud through strategy and automation. Operators must ensure compliance with both state and federal legislation relating to anti-money laundering (AML) rules alongside fraud prevention measures intended for online gamblers.
In June 2023, Socure, a US-based tech company, acquired identity verification service Berbix for a sum of $70m, recording its first-ever acquisition. While merging Berbix ID verification and real-time fraud detection features with the comprehensive approach by Socure, this move is designed to improve security and compliance measures across a variety of industries through the use of pooled resources and expertise.
In November 2021, Experian introduced the Work Number digital verification service, which allows users to provide their consent for digital payroll data sharing. This service establishes a direct connection with an employer’s payroll systems in order to quickly verify customers’ income (both gross and net), employment status (full or part-time) as well as the length of tenure. Doing so simplifies validation routines for different purposes, making them faster and more convenient.
Identity Verification Market Segmentation
Identity Verification Component Outlook
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Solutions
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Services
Identity Verification Type Outlook
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Biometrics
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Non- biometrics
Identity Verification Deployment Mode Outlook
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On-premises
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Cloud
Identity Verification Organization Size Outlook
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SMEs
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Large enterprises
Identity Verification Verticals Outlook
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BFSI
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Government and Defense
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Healthcare & Life sciences
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Retail and E-Commerce
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IT & ITeS
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Energy and Utilities
Identity Verification Regional Outlook
- North America
- US
- Canada
- 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
- Japan
- India
- South Korea
- Australia
- Rest of Asia-Pacific
- Rest of the World
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- Middle East
- Africa
- Latin America
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