The Global Advanced Authentication in Financial Services Market size is expected to reach $11.3 billion by 2028, rising at a market growth of 14.5% CAGR during the forecast period.
Advanced authentication is a method of authentication that makes adaptive use of real-world identity signals to greatly strengthen identity verification for system and information security. Advanced authentication techniques can be conceptually distinguished from traditional authentication techniques, which frequently only rely on passwords and usernames or other means of identification, like tokens or security codes that can be easily stolen and used again by attackers with the right motivation.
The issue with the security of passwords has persisted for a long time. The most popular technique used by scammers to access a user account is still password theft, in addition to the dark web circulation of stolen credentials (password dumping). As a result, customers expose themselves to danger when they share passwords, use recycled or weak passwords, or engage in risky behavior that compromises the security of their data.
Furthermore, rather than working to avoid fraud in the first place, some financial services companies depend on reactive protocols, like acting only after it has already occurred. The security measures and historical authentication that banks and financial institutions have implemented frequently exist at both the back-end and front-end of digital transactions, which is a fundamental problem.
With advanced authentication, it is possible to verify a computer system user’s identity. Hardware tokens, software tokens, and biometric systems are a few examples. With more traditional methods like usernames and passwords, several unconventional identity verification methods can be used in advanced authentication.
COVID-19 Impact Analysis
Due to the increased demand for contactless payments brought on by the pandemic, point of sale (POS) terminals equipped with biometric technology, as well as other technologies that receive payment through digital interface and contactless chip cards were increasingly necessary. During the pandemic, using customer relationship management (CRM) and other financial solutions for businesses was made possible by the emergence of advanced authentication in financial services market systems. Therefore, the pandemic had a minor effect on advanced authentication in financial services market.
Market Growth Factors
Increase in the number of online transactions and online banking
Consumers gain a lot from the streamlined experience that digital payments offer. With technologies like biometric security and encryption, non-cash payments and transactions are meant to be secure. In addition, a World Bank report claims that the COVID-19 outbreak has expanded the use of cashless transactions, with two-thirds of adults making or receiving them globally as of late, with developing nations’ share rising significantly. Hence, the expansion of advanced authentication in financial services market is being driven by increased non-cash payments.
Expanding implementation of automation in financial services
Automation in financial services aids in improving employee success and workplace happiness, minimizing errors, and boosting productivity. By automating repetitive tasks and improving data analysis, staff members can devote more time to strategic initiatives that provide insight into new business development opportunities. With the increasing automation of the financial services sector, a rapid need for securing internal and external interactions and transactions rises. Hence, advanced authentication in financial services market will benefit from expanding financial service applications during the anticipated period.
Market Restraining Factors
Limitations associated with the usage and adoption of advanced authentication
Advanced authentication techniques might not scale, especially for large financial institutions that process many transactions. As a result, longer authentication times and lower user satisfaction may come from this. Advanced authentication techniques may result in false negatives when an unauthorized user is allowed access due to a failed authentication. When delicate data or transactions are involved, this can be especially dangerous. Although advanced authentication techniques increase security and convenience, they are constrained by user and technological issues, privacy worries, scalability, and false negatives. All these factors significantly hamper the growth of the market.
Based on type, the advanced authentication in financial services market is categorized into single-factor authentication and multi-factor authentication. The multi-factor authentication segment garnered the highest revenue share in the advanced authentication in financial services market in 2021. Growth is explained by a proportionally larger increase in cyberattacks, security lapses, and online fraud. Installing multi-factor authentication (MFA) systems in the staff members’ smartphones and computing equipment to confirm the user’s identity aids in avoiding such risks.
Enterprise Size Outlook
On the basis of enterprise size, the advanced authentication in financial services market is divided into large enterprises and small & medium-sized enterprises. The small and medium-sized enterprises (SMEs) segment recorded a significant revenue share in the advanced authentication in financial services market in 2021. This segment is growing due to elements including stringent regulatory compliance, cheaper IT infrastructure, and fraud detection and prevention technologies. For SMEs, advanced authentication has many benefits, including data accessibility, automated syncing, protection of user data, maintaining the security of POS, and preventing identity theft crimes.
Authentication Method Outlook
Based on authentication method, the advanced authentication in financial services market is segmented into biometrics, smart cards, mobile smart credentials, and others. The biometrics segment witnessed the maximum revenue share in the advanced authentication in financial services market in 2021. Due to the anonymous aspect of digital transactions, businesses, and customers must work together to develop a mutually beneficial level of trust. As a result, consumers today look for visible indicators of security when engaging with a firm to achieve this.
On the basis of region, the advanced authentication in financial services market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The North America segment procured the highest revenue share in the advanced authentication in financial services market in 2021. This is due to numerous biometric payment solution companies’ availability and widespread use. Also, the regional banks have undertaken various initiatives to promote the use of biometric payment systems for transactional purposes. To entice new and recurring customers, banks provide a range of promotions and incentives. North America is the only region where the environment is conducive to the early adoption of breakthrough technology, particularly autonomous banking.
The major strategies followed by the market participants are Acquisitions. Based on the Analysis presented in the Cardinal matrix; Mastercard, Inc. and Broadcom Inc. (CA Technologies, Inc.) are the forerunners in the Advanced Authentication in Financial Services Market. Companies such as Dell Technologies, Inc., Thales Group S.A., NEC Corporation are some of the key innovators in Advanced Authentication in Financial Services Market.
The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Broadcom, Inc. (CA Technologies, Inc.), Dell Technologies, Inc., Mastercard, Inc., Thales Group S.A., NEC Corporation, ValidSoft Group, SecurEnvoy Limited (Shearwater Group PLC), Ping Identity Holding Corp. (Thoma Bravo, L.P.), Absolute Software Corporation and Fujitsu Limited.
Recent Strategies Deployed in Advanced Authentication in Financial Services Market
Partnerships, Collaborations, and Agreements
Feb-2023: Ping Identity entered into a partnership with Deloitte, a security consulting services provider. The partnership would enable the company to offer their clients streamline digital identity management and authorize access to access sensitive corporate resources for particular employees, and customers. Furthermore, it would help businesses reduce risk and accelerate time-to-value as they look to modernize their identity strategies.
May-2022: Mastercard came into a partnership with Synctera, a leading FinTech banking provider. Together, the companies aimed to combine Mastercard’s open banking platform to deliver account validation solutions for Synctera-powered FinTechs. Additionally, this modern collaboration utilizes Mastercard’s open banking platform to expand the possibilities open to Synctera-powered FinTechs as they develop their tech stacks and permits for enhanced KYC abilities.
Feb-2022: Thales entered into a partnership with Singapore Economic Development Board, plans and executes strategies to sustain Singapore. Under this partnership, the companies aimed to install more fintech and cloud aviation solutions along with more cutting-edge biometrics in the country.
Jul-2020: Thales collaborated with Nedap, a Dutch multinational technology company. Under this agreement, Thales’s Facial Recognition Platform (FRP) integrated with Nedap’s physical access control platform (AEOS) to facilitate the widespread uptake of biometric authentication. Thales FRP interfaces with Nedap’s access control panel to offer face-matching results upon each authentication request, along with the back end to synchronize the list of authorized people.
Jan-2020: ValidSoft Group joined hands with Persistent Systems, Digital Engineering, and Enterprise Modernization services provider. The collaboration is aimed to develop a secure digital voice authentication, integrated with Persistent’s banking solutions. The integration would allow the financial institution to use voice biometrics to verify the identities of their customers.
Product Launches and Product Expansions
Dec-2022: ValidSoft launched See-Say, a digit-based voice authentication solution. See-Say combines voice biometric authentication and cryptographically generated numeric digits to create a record of the identity of the individual performing the access request. The launch is aimed at addressing the need to counter credential theft, replay attacks, social engineering hacks, and synthetic voice-deep fake attacks to provide trusted identity assurance in enterprise remote access applications.
Apr-2022: Mastercard revealed the Digital Transaction Insights solution, designed to tackle digital fraud and improve the online shopping experience. Digital Transaction Insights is used across a broad range of online checkout instances. The new solution is enabled by EMV 3-D Secure and Mastercard Identity Check. With this launch, the company aimed to offer advanced technologies that enable trust and help build a safe and thriving digital ecosystem for all.
Oct-2020: Ping Identity unveiled PingZero, a suite of passwordless authentication. PingZero improves the productivity of the employee and enhances customer retention and further reinforces cybersecurity defenses. The new suite can be used in multiple enterprise resources including mobile, SaaS, legacy applications, and more.
Oct-2020: Thales introduced the Identity Verification offering. The portfolio allows secure and complete AI identity verification service with the latest combined facial identification technology, document security features spotting, and machine learning engines.
Acquisition and Mergers
Mar-2023: Mastercard completed the acquisition of Baffin Bay, a Sweden-based cybersecurity firm, to provide its customers with a multi-layered protective shield. Through this acquisition, the company aimed to strengthen its service offerings and integrate its solutions into an all-encompassing cyber service. Moreover, it enables the company to deliver faster, smarter, and more effective protection from cyber risk to its customer across the world.
Jul-2022: Thales took over OneWelcome, a company involved in Customer Identity and Access Management. Under this acquisition, Thales would strengthen its leading place as a global cybersecurity player and a provider of trusted and secure digital identities.
Nov-2021: Mastercard acquired Aiia, a supreme European open banking technology provider. With this acquisition, Mastercard further expands its current open banking technology and established data techniques and strengthens the organization’s progress in creating a more powerful global open data network.
Jun-2021: Mastercard took over Ekata, Inc., a provider of global identity verification solutions. Through this Acquisition, companies would deliver uniform experiences as well as make sure of security, customer privacy, and control. Moreover, Mastercard would focus on developing both companies’ identity capabilities to build a safer, seamless way for consumers.
Jun-2021: Ping Identity took over SecuredTouch, a leader in bot attack prevention, identity risk, and fraud intelligence. Under this acquisition, SecuredTouch would be combined within the PingOne Cloud Platform, providing enterprises access to improved signals, data, and intelligence, which would use behavioral biometrics to get an improved understanding of fraudster behavior, with step-up authentication to stop malicious activity.
May-2021: Absolute Software Corporation took over NetMotion Software, Inc., a connectivity and security solution provider. The acquisition enables the company to bring together a resilient network and power of self-healing devices and applications to offer the next generation of Endpoint Resilience, enable businesses to maximize technology functionality, and prioritize a secure user experience.
Nov-2020: Mastercard took over Finicity, a foremost North American supplier of real-time access to financial data and insights. With this acquisition, the addition of Finicity’s additional technology and teams reinforces the current Mastercard open banking platform to promote and protect a greater selection of financial services, helping the business’s long-standing partnerships with and dedication to financial organizations and fintech around the world.
Nov-2020: Ping Identity completed the acquisition of Symphonic Software, a dynamic authorization service provider for protecting APIs, data, apps, and resources through identity. The acquisition strengthens the company’s ability to offer zero trust identity security for different enterprises for delivering personalized, trustworthy experiences.
Oct-2020: Ping Identity acquired ShoCard, a leader in technology designed to transform how customers maintain their identity and engage with companies. The technology would enable users to gather verification of their identity and share it with companies when setting up new relationships in a privacy-first user experience.
Apr-2020: Fujitsu Frontech North America, a wholly-owned subsidiary of Fujitsu Frontech Limited took over Fulcrum Biometrics, Texas-based biometric hardware, software, and solutions provider. Through this acquisition, the company aimed to expand its enterprise apart from palm vein authentication, to provide a broad range of multi-modal biometric solutions that would provide an increased level of security and accuracy, for global as well as North American consumers.
Scope of the Study
Market Segments covered in the Report:
- • Multi-factor Authentication
• Single-factor Authentication
By Enterprise Size
• Large Enterprises
• Small & Medium-sized Enterprises
By Authentication Method
• Smart Cards
• Mobile Smart Credentials
• North America
•·Rest of North America
•·Rest of Europe
• Asia Pacific
•·Rest of Asia Pacific
•·Rest of LAMEA
• Broadcom, Inc. (CA Technologies, Inc.)
• Dell Technologies, Inc.
• Mastercard, Inc.
• Thales Group S.A.
• NEC Corporation
• ValidSoft Group
• SecurEnvoy Limited (Shearwater Group PLC)
• Ping Identity Holding Corp. (Thoma Bravo, L.P.)
• Absolute Software Corporation
• Fujitsu Limited
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