Digital Identity Solutions
Digital identity refers to the information that is
associated with an individual or entity in a digital context. This information
includes attributes such as name, address, date of birth, and other details
that can be used to uniquely identify an individual or entity. Digital identity
solutions are technologies and strategies that are designed to manage and
protect digital identities. In this essay, we will discuss the importance of
digital identity solutions and their impact on various industries.
The Importance of
Digital Identity Solutions
Digital identity solutions are becoming increasingly
important in today's digital landscape. As more and more people conduct their
personal and professional lives online, the risk of identity theft and fraud
has increased. Digital identity solutions can help to mitigate these risks by
providing secure and reliable methods for verifying the identities of
individuals and entities. They also enable better access control to online
resources and protect user privacy by limiting access to personal information.
In addition, digital identity solutions are critical for
businesses and organizations that rely on online transactions. These solutions
help to build trust between customers and businesses by ensuring that their
personal and financial information is protected. They also enable businesses to
comply with regulatory requirements such as Know Your Customer (KYC) and
Anti-Money Laundering (AML) regulations.
Impact of Digital
Identity Solutions
Digital identity solutions have a significant impact on
various industries, including finance, healthcare, and e-commerce. In the
finance industry, digital identity solutions enable secure online banking,
investment, and payment transactions. They also help financial institutions comply
with KYC and AML regulations, reducing the risk of fraud and money laundering.
In healthcare, digital identity solutions enable secure
access to patient records and other sensitive information. They also facilitate
the sharing of information between healthcare providers, improving patient
outcomes and reducing medical errors.
In e-commerce, digital identity solutions enable secure
online transactions and help to prevent fraud. They also enable personalized
marketing and customer experiences by providing businesses with valuable
customer data.
Dynamics of Digital Identity Solutions Market
Drivers in Digital
Identity Solutions Market
Digital identity solutions have emerged as a critical tool
for combating cyberattacks and identity-related fraud and theft in recent
times. One of the primary drivers of the digital identity solutions market is
the rise of ID wallet solutions, which allow citizens to securely store and
share digitalized and encrypted versions of their ID documents. These solutions
use cutting-edge technologies like machine learning, face-based biometrics,
blockchain, and artificial intelligence to establish a trusted identity and
provide a higher level of assurance.
Restrains in Digital
Identity Solutions Market
However, despite the numerous benefits of digital identity
solutions, one of the key restraints in the market is the high cost involved in
deploying such solutions. The initial investments and costs associated with
implementing digital identity solutions are significant, and organizations
across all verticals face budget constraints that make it challenging to carry
out IT security operations effectively. This often leads to SMEs focusing on
security only after a breach has occurred, while larger enterprises prioritize
the security of critical servers and pay less attention to the data stored in
databases, leaving them vulnerable to cyber threats.
Moreover, the increasing complexity of organizational
structures, the growing number of people and devices with unique identities
across networks, and the rise of mobile computing and e-commerce are further
driving demand for digital identity solutions. Despite the challenges posed by
cost, the need for secure and trusted digital identity solutions is likely to
continue to grow as organizations seek to combat cyber threats and protect
their sensitive data.
Opportunities in
Digital Identity Solutions Market
The integration of AI, ML, and blockchain technologies
presents a promising opportunity for enhancing digital identities. By
automating analytical model building, these technologies can enable computers
to uncover hidden insights and minimize potential risks. This is particularly
useful in the digital identity solution market, where ML-based analytics can be
applied to large volumes of identity-related data to accurately measure and
report on user, account, and organizational risk posture. Sectors like
automobile, BFSI, and government have already started implementing these
technologies to improve identification and authentication processes.
Blockchain technology, in particular, is playing a vital
role in this area. Decentralized identity solutions using blockchain technology
provide an open-standards-based identity framework that uses digital
identifiers and verifiable credentials that are self-owned, independent, and
enable trusted data exchange. As investments in digital transformation
increase, identity results have garnered increasing acceptance as they aid in
secure identification and upgraded security, which supports industry growth.
Challenges in Digital
Identity Solutions Market
However, the implementation of digital identity solutions is
not without its challenges. One major challenge is the threat of privacy and
data breaches. People are hesitant to share their facial data for fear of it being
misused, particularly in countries in Latin America and Africa. Additionally,
citizens are afraid that their personal data, including social security numbers
and bank account details, may be breached and compromised if they enable the
use of digital identities.
To overcome these challenges, governments and enterprises
must engage with end-users more actively and make them aware of the advantages
of digital identities. Once people gain confidence in the security of their
digital identities, they will be more willing to adopt digital identity
solutions. This will enable organizations to plan corrective measures and
strategic steps and open up many growth avenues for digital identity solutions
vendors.
Ecosystem of Digital Identity Solutions Market
The retail and eCommerce sector is expected to experience
the highest growth rate among all verticals, according to forecasts. Digital
identity solutions have been swiftly implemented in this sector to support
business stability and enhance competitiveness. This is particularly important
for the retail industry, which is known for being cost-conscious, and is
frequently targeted by cyberattacks due to the potential payouts and a large
number of monetary transactions via credit card companies like Visa and
Mastercard.
The retail and eCommerce sector holds significant potential
for the digital identity solutions market. Retailers are being compelled to
adopt managed authentication services due to the increasing complexity of their
supply chains, as well as the channels they use to reach their customers and
partners. Ecommerce organizations use various third-party applications to
manage their websites, vendors, employee access points, and a growing number of
Internet of Things (IoT)-based devices, such as security cameras and printers.
They require a more robust and rapid authentication technology to maintain a
seamless workflow. For consumer packaged goods (CPG) companies, digital
identity solutions are beneficial in enhancing customer experience while
reducing costs and resource expenditure. Therefore, it is critical for retail
and eCommerce organizations to adopt digital identity solutions to protect
themselves against critical incidents and improve the overall customer
experience.
The Asia Pacific region boasts several developing and
developed economies, including Australia, China, Japan, India, Singapore, and
South Korea. With the rapid increase in technological innovations, the digital
identity solutions market in the Asia Pacific region is experiencing
substantial growth opportunities. This region comprises a mix of developing and
developed countries, and in 2019, it suffered a loss of USD 260 million to
digital fraud, with 71% of online fraud stemming from identity theft.
Developing countries such as India, China, and Japan are
adopting digital identities to authenticate their citizens, while developed
countries like South Korea are using digital identities for more advanced
applications, including accessing government services and identification.
Australia, a developed country, has launched its federated digital identity
system to allow citizens access to government services. Singapore is leading
the way in the Asia Pacific region with regards to advancements in digital
identity. The country has introduced SingPass and CorpPass programs to provide
enhanced security for citizens while accessing government services. Singapore
is also planning to implement a real-time payment authentication system based
on digital identity in the near future.
During the forecast period, the solutions segment emerged as
the market leader, accounting for over 66% of global revenue. Various vendors
offer digital identity solutions as an integrated platform or tool that can be
easily integrated into an organization's existing infrastructure. These vendors
also provide hardware and services to help organizations implement the
necessary solution.
Digital identity solutions are aimed at enhancing security,
reducing costs, streamlining business processes, and enhancing customer
satisfaction. Retail, IT, healthcare, and financial services customers are
incorporating digital identity solutions into their operations to automate the
customer onboarding process and save time. The IT and Telecommunication sector
accounted for over 19% of global revenue during the forecast period.
Additionally, BFSI is expected to generate the highest revenue after IT and
Telecom. Due to the increase in bank fraud committed by in-house employees and
helpdesk calls related to forgotten passwords, BFSI firms have adopted digital identity
solutions. Customers expect banking services anytime, anywhere, so BFSI firms
are deploying various services, such as internet banking, mobile banking, and
stock trading via web and mobile applications.
Furthermore, the BFSI industry vertical is increasingly
concerned about securing its customers' sensitive data, driving the digital
identity solutions industry forward. In November 2022, Daon, Inc. announced
that GoTyme Bank Corporation, a joint venture of Tyme, a new digital bank, used
Daon IdentityX for digital identity capture and authentication in the GoTyme
banking app. The solution will assist in lowering the barriers to setup
accounts for consumers while also ensuring GoTyme Bank has precise proofing and
identity verification for all prospective consumers. The retail and e-commerce
sector is expected to experience significant growth during the forecast period.
The retail and e-commerce sector is rapidly implementing digital identity
solutions to enhance business stability and increase competitiveness. Due to
the high number of monetary transactions processed by MasterCard and Visa, it
is one of the most cost-conscious verticals and the most vulnerable to
cyberattacks.
During the forecast period, the biometric segment accounted
for over 59% of global revenue, leading the market due to its superior security
compared to conventional keys or keycards, and password systems. Biometric
authentication methods like fingerprint, facial recognition, retina or eye
scan, handprint, and voice recognition have traditionally replaced passwords as
digital identity management solutions have evolved. Biometric solutions use
lock-and-capture mechanisms to verify individuals and provide access to
specific services. For example, a "photo verification" system based
on face biometrics, a crucial part of an Australian state digital ID, was pilot
tested in New South Wales in November 2022. The opt-in public service
decentralizes selfie biometrics and other personal data security, placing it in
the hands of citizens who can control which information about them is visible
by storing their credentials on their mobile devices.
In the coming years, the non-biometric segment is expected
to see significant growth. This segment facilitates the authorization and
validation of an individual's identity to enable the provision of entitlement
or services, relying on factors such as passwords, PINs, and knowledge of
personally relevant information or events. Incorporating Machine Learning (ML)
and Artificial Intelligence (AI) technologies into non-biometric digital
identity solutions can effectively detect and remediate unauthorized and
suspicious activities, as well as invasive access requests on an enterprise
network. The non-biometric solutions segment is a crucial component of digital
identity solutions and has witnessed rapid growth in recent years.
During the forecast period, the authentication segment of
the digital identity solutions market led in terms of revenue, accounting for
over 46% of the global market. Authentication plays a crucial role in verifying
user identity and preventing fraudulent activities. The market for digital
identity solutions is segmented into two categories based on authentication
types: single-factor and multi-factor.
Single-factor authentication employs only one feature to
verify a person's identity. This type of authentication includes solutions such
as passwords, fingerprints, PINs, facial, voice, iris, and vein recognition.
Single-factor authentication is simple and widely used in various industries, including
government, consumer electronics, banking and finance, and healthcare.
On the other hand, multi-factor authentication provides a
high level of security and ensures the confidentiality of personal information.
It is considered more secure than traditional one-factor authentication methods
such as usernames and passwords/PINs, which are easily guessed and forgotten.
For example, in April 2021, HID Global Corporation, a division of ASSA ABLOY,
launched WorkforceID Authentication, a multi-factor authentication solution for
the workforce. The cloud-based solution enables businesses to organize, issue,
and deploy digital identity credentials for physical and logical access
control.
During the forecast period, the on-premises segment emerged
as the leader, contributing to more than 64% of the global revenue. This is
mainly due to the availability of infrastructure in large enterprises that
allows them to deploy their solutions on-premises, ensuring greater flexibility
and control. The deployment mode involves a one-time licensing fee and service
agreement, which makes it more convenient for larger organizations. Digital
identity solutions, deployed on-premises, provide valuable insights into
clients, thereby creating a more consistent experience.
In contrast, the cloud segment is projected to exhibit
significant growth in the future due to benefits such as lower installation and
maintenance costs, as well as ease of use. Cloud-based digital identity
solutions are becoming popular as they save organizations costs associated with
infrastructure maintenance and technical staff. By deploying these solutions on
the cloud, companies can focus on their core competencies rather than investing
in expensive security infrastructure. For example, in April 2021, Innovatrics,
a European provider of multimodal biometric solutions, introduced a cloud API
to make its remote digital identity verification, with liveness detection and
selfie biometrics, more accessible to businesses and developers.
Dominating Companies in Digital Identity Solutions Market
- NEC Corporation
- SAMSUNG SDS
- THALES
- GBG
- TELUS
- TESSI
- DAON
- IDEMIA
- FORGEROCK
- IMAGEWARE
- JUMIO
- IPROOV
- ID R&D
- REFINITIV
- ONESPAN
- SMARTMATIC
- FREJA EID GROUP
- VINTEGRIS
- AU10TIX
- SIGNICAT AS
- RAULWALTER
- DUO SECURITY
- SYNTIZEN
- HASHCASH CONSULTANT
- GOOD DIGITAL IDENTITY
Recent Developments in Digital Identity Solutions Market
- In May 2022, Microsoft announced the acquisition of ID.me, a
digital identity verification provider that allows users to prove their
identity online and access various services.
- In December 2021, Okta, a leading identity management
platform, announced its acquisition of Auth0, a developer-focused identity
platform, in a deal worth $6.5 billion. This acquisition aimed to bring
together two powerful digital identity solution providers to offer a more
comprehensive service to their customers.
- In November 2021, Ping Identity, a provider of digital
identity management solutions, announced a partnership with Amazon Web Services
(AWS) to provide customers with secure access to cloud services. This
partnership aimed to simplify the integration of digital identity solutions for
customers using AWS cloud services.
- In August 2020, ForgeRock, an identity and access management
solutions provider, announced a strategic partnership with Google Cloud to
provide customers with a secure and flexible digital identity solution that
integrates with Google Cloud services.
- In January 2020, Entrust Datacard, a provider of trusted
identity and secure issuance solutions, acquired Safelayer Secure
Communications, a Spanish-based digital identity solutions provider. This
acquisition aimed to expand Entrust Datacard's offerings in the digital
identity space and increase its presence in the European market.
- In February 2022, Veriff, an Estonian-based identity
verification company, announced a strategic partnership with Airwallex, a
cross-border payment platform. This partnership aimed to provide Airwallex
customers with a more streamlined onboarding experience through Veriff's
digital identity verification solution.
- In October 2021, Experian, a global information services
company, announced the acquisition of Avoco Secure, a digital identity
verification provider. This acquisition aimed to expand Experian's capabilities
in the digital identity space and provide more comprehensive solutions to its
customers.
- In July 2021, ForgeRock announced its acquisition of IoT
security provider, IoT.nxt. This acquisition aimed to enhance ForgeRock's
capabilities in the IoT space and provide customers with a more comprehensive
digital identity solution that includes IoT devices.
- In May 2021, Idemia, a global leader in identity
verification and authentication, announced a partnership with Microsoft to
develop a secure digital identity solution. This partnership aimed to leverage
Idemia's expertise in biometrics and identity verification with Microsoft's
expertise in cloud computing to create a more secure and comprehensive digital
identity solution.
- In October 2020, Jumio, a leading identity verification
provider, announced a partnership with Microsoft Azure to provide customers
with a more seamless integration of Jumio's identity verification solutions
with Azure's cloud services.
In conclusion, digital identity solutions are becoming
increasingly important in today's digital landscape. They provide secure and
reliable methods for verifying the identities of individuals and entities, and
they help to mitigate the risks of identity theft and fraud. They also have a
significant impact on various industries, including finance, healthcare, and
e-commerce, by enabling secure transactions and improving customer experiences.
As the digital landscape continues to evolve, digital identity solutions will
play an increasingly important role in protecting user privacy and securing
online transactions.