The identity verification market is expected to witness a CAGR of 13.1% over the forecast period, 2020-2025. The new verification offerings respond to escalating security threats and vulnerabilities across industries make identity management a core element of cyber defense. Technology experts are proposing a Blockchain-based digital identity veri?cation, record attestation, and record sharing system. When compared to traditional identity systems, it makes identity veri?cation and identity-based record sharing more e?cient and secure, while respecting the privacy of identity owners. By exploiting the trust fabric of blockchain, a blockchain-based identity system eliminates the middle man and wait-lines for authentication, authorization, and attestation. If implemented, this solution further holds a market growth trend in the future.
- Adoption of solutions through stringent regulations and the need for compliance drive the market. The regulatory authorities now become more stringent toward KYC (Know Your Customer) and AML (Anti-Money Laundering) compliance among reporting entities.
- The EU launched the fifth AML directive, which was set to be fully implemented from 10 January 2020. The identity verification threshold for the prepaid card industry is reduced from EUR 250 to EUR 150. The scope of AML regulations is also further enhanced. Furthermore, FATF (Financial Action Task Force) increased the scope of reporting entities and recommended the member countries to oblige the legal professionals, art dealers, and virtual asset dealers to perform AML screening on their customers. The AML screening regulations implemented in these sectors are parallel to those implemented in financial institutions.
- Furthermore, the adoption of BYOD trends in enterprises drives the market. As the BYOD market is growing, companies, mostly medium and large enterprises, are trying hard to adjust to the security threats while enjoying new cost-cutting and employee satisfaction opportunities. Fingerprint and retina scanning, as well as facial recognition, are becoming available on the majority of mobile devices. In 2020, they are likely to turn into an integral security measure for the BYOD approach. Biometric scanners will be used widely to verify an employee’s identity to grant access to corporate data via a BYOD device.
- According to Duo’s 2019 information, in half a billion users, 77% of mobile devices used to access business applications have biometrics configured. by 2022, 60% of large and global enterprises, and 90% of midsized enterprises (MSEs) are also likely to implement authentication methods, and increasingly, organizations understand they need to adopt passwordless strategies.
- Furthermore, online ID verification is seeing a spike in demand, driven by COVID-19. With many businesses switching staff to remote working during the COVID-19 pandemic, there has been a clearly chronicled surge in demand for video-conferencing and other tools, like Zoom. Several online identity verification startups also have seen an increased demand over the past few weeks, including parallel growth in telemedicine, where remotely verifying a patient’s identity is a core requirement, given the sensitivity of the data involved. Businesses that can shift technology capacity and investments to digital platforms will mitigate the impact of the outbreak, and therefore digital identity verification market inhibits growth in this pandemic.
- However, the constraints of the budget while adopting identity verification solutions restraints the market. Several basic elements of identification infrastructure are necessary, including the ID credential, the IT infrastructure used for enrollment, back-end data processing, and authentication, as well as the physical features needed for user interaction and registration.
Key Market Trends
Adoption of Digital Identity Verification Solution in Healthcare Accounts for Significant Share
- According to the HIPAA Journal, in the last decade, there were over 2,550 healthcare data breaches, including 46 in April 2019 alone, which is the highest monthly tally in a decade. With each data breach, the medical records are published on the dark web that exposes patients’ date and place of birth, credit card info, etc. Due to the great amount of personal information involved, medical records have a high value on the dark web and are listed for up to USD 1,000 each, which is 10 times more than average credit card data breach records.
- For instance, in June 2019, Quest Diagnostics exposed close to potential 11.9 million patients’ records. Furthermore, in July 2019, Quest’s rival, LabCorp, was the target of a cyberattack that resulted in the company pulling parts of its IT system offline. The ransomware attack cost LabCorp USD 24 million to address.
- Owing to such incidents, digital identity verification is a key component of ensuring patient security. It is vital for healthcare organizations to take a Know Your Patient approach, through the adoption of an online digital identity verification system, which verifies a patient by comparing a photo of a patient’s government-issued ID to a live photo.
- Furthermore, health insurance fraud is another area for consideration. When a patient’s identity and his privacy are compromised, they suffer from financial fallout, and the industry needs to deal with fraudulent claims and other related legal fees.
- The adoption of the KYP procedure in health care organizations is now an essential process to be implemented. The extent to which medical institutions are being exploited through fraud, such as prescription and insurance fraud, perhaps now is the time for the health care industry to adopt Know Your Patient (KYP) processes.
- In the United Kingdom, online pharmacies are required to perform age verification under new guidance published by the General Pharmaceutical Council.
- In the United States, with increasing medical record breaches, the adoption of the secure platform has become a vital component that, in the future, the market of identity verification shows potential growth.
- Furthermore, new forms of identity management leveraging artificial intelligence (AI) and machine learning (ML) can enable hospitals and physician practices to become productive and secure. Integrated by cloud and powered by AI and ML, these new forms of identity management have the potential to eliminate inefficiencies such as access gaps that impact clinical and operational workflows without affecting the risks to health data security and privacy.
Asia-Pacific to Witness Significant Market Growth
- Asia-Pacific is expected to provide significant market growth for identity verification over the forecast period. In recent years, the region witnessed accelerated growth in Asia’s digital banking sector, where more fintech and newly licensed virtual banks are approaching this market to address the unbanked segment, while traditional banks are being in transformation stage to manage costs and achieve operational efficiency in this increasingly competitive landscape. However, digitization has exposed businesses to new risks, such as online identity fraud, account takeovers, and data breaches.
- Fraudsters are increasingly growing advanced with the sophisticated technologies they now use to impersonate legitimate users. Deepfake technology poses a growing identity threat by using advanced artificial intelligence (AI) for creating seemingly real videos that take a person in an existing image or video, and it replaces them with someone else’s likeness.
- More Asian companies are integrating real-time liveness detection capabilities into their eKYC systems that ensure the remote user is physically present and can defend against spoofing attacks. As the digital economy grows, multi-factor biometric identity verification and certified liveness detection technologies are trending to evolve accordingly, to better serve and address the changing security needs of business and consumers.
- India experienced a rapid increase in cybercrime registration, with the country ranking fifth in terms of the overall DNS hijacks. According to Gemalto, India accounts for 37% of the global breaches in terms of records compromised or stolen. With the increasing number of malware and ransomware attacks in the country, it states a significant factor in driving the adoption of identity verification solutions.
- Furthermore, in China, in March 2020, China Ever?bright Bank (CEB) announced a blockchain-based supply chain finance solution by Ant Financial. By implementing Ant Financial’s Duo Chain technology, China Ever?bright Bank intends to improve the security of SCF, and eliminate fraudulent transactions. As reported by Sina, the Duo Chain plat?form allows users to complete identity verification and electronic signatures with CEB, while recording all relevant transactions to a distributed ledger for tracking purposes.
- Furthermore, 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. The announcement of the installation of Photo kiosks in government agencies across Singapore will effectively inhibit the growth of the market.
The identity verification market is highly fragmented with numerous competitors and many competing technologies that provide intense rivalry among the players. Key players are Acuant Inc., Authenteq Ltd, etc. Recent developments in the market are -
- December 2019 - Ubisecure and Onfido announced a strategic partnership to enable Onfido’s identity verification technology for Ubisecure customers’ digital identity solutions. This new technology partnership provides a combined solution stack for customers, whereby Onfido will effortlessly and securely verify a user identity at the onboarding stage, with Ubisecure’s technology enabling seamless ongoing management of that identity.
- April 2019 - BAE Systems introduced the NetReveal Fraud Prevention Solution with advanced analytics and detection methodologies employing machine learning techniques helping banks, insurers, and government agencies identify fraudulent activities.
Reasons to Purchase this report:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support