|Study Period:||2018 - 2026|
|Fastest Growing Market:||Asia-Pacific|
|Largest Market:||North America|
Need a report that reflects how COVID-19 has impacted this market and its growth?
The global identity verification market was valued at USD 7.66 billion in 2020. It is expected to reach USD 16.65 billion by 2026, registering a CAGR of 13.29% during the forecast period (2021-2026). Multiple businesses have been ramping up their identity verification processes to protect customers during the COVID-19 pandemic. According to Trulioo, a global identity verification provider, 72% of online marketplaces have increased their adoption of ID verification technology due to COVID-19. Also, more than half of financial services organizations have fueled the said adoption. This sudden speed in identity verification adoption is a clear reflection of the urgency to protect the vast numbers of consumers who have been forced to use digital services for the first time due to lockdown restrictions.
- Adoption of solutions through stringent regulations and the need for compliance are influencing market growth. The regulatory authorities have become stricter toward KYC (Know Your Customer) and AML (Anti-money Laundering) compliance among reporting entities.
- With increasing online services and smartphone penetration, verifying identities digitally is becoming crucial for both businesses and governments. The regulatory authorities are increasingly becoming stringent toward KYC and AML compliance among businesses to control financial crime. 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.
- Further, the European Union launched the fifth AML directive (AML5), under which the identity verification threshold for the prepaid card industry was reduced from EUR 250 to EUR 150. All member states implemented the directive in January 2020. The AML5 regulations are focused on transforming KYC processes to comply with the standards and procedures proposed by AML and eIDAS rules and establish guidelines for verifying customers at a high-security standard.
- Moreover, government bodies worldwide focus on creating stringent regulations to curb identity theft and make efforts to get the global population under the legal identity umbrella. The United Nations and World Bank ID4D initiatives aim to provide everyone on the planet with a legal identity by 2030.
- In September 2020, LoginID Inc. and Ipsidy Inc. formed a partnership that provides new tools to combat fraud in online activities. By integrating Ipsidy's biometric identity verification platform with the LoginID FIDO as a Service platform, the companies would offer FIDO2 authentication and login services, delivered with enhanced security and a high level of identity trust.
- Moreover, enterprises across the globe are increasing spending on digitization, including payment processes. The move toward digitization can be witnessed in all types of organizations. According to a recent TechRepublic Premium survey, 47% of the respondents plan on spending more on digital transformation in 2021 than in 2020. In addition, in 2020, 58% of the respondents reported digitizing paper, and 45% reported adopting online training modules.
- Further, budgetary constraints during the adoption of identity verification solutions are the only challenges hampering the market growth for identity verification. According to Jumio Corporation, under some assumptions, the total cost of ownership for online identity verification costs around USD 853,750 per year. For large enterprises, it is easier to purchase such identity verification solutions. However, for SMEs, it becomes an issue due to insufficient resources in terms of budget. The high initial costs and maintenance of identity verification make it difficult for companies bootstrapped with limited capital. Due to budget restraints, SMBs typically have limited access to bank-grade technology and security solutions, making them an easy target for cybercriminals.
Scope of the Report
The study on identity verification is structured to track identity verification, authentication, and validation solutions for banks, credit card issuers, payment enablers, retail, law enforcement, telecommunications, and other sectors. Critical use cases served by these solutions include eKYC, driver registration, user onboarding, user verification, identity verification, fraud detection, and age verification.
The study covers various use cases across various end-user industries and developments across regions. It also includes a qualitative assessment of different types of solutions. Vendors offering document-centric identity-proofing, digital attribute, and behavior analytics-focused identity affirmation capabilities are also considered in the study.
|By Deployment Type|
|By End-user Industry|
|Retail and E-commerce|
|Other End-User Industries|
|Middle East and Africa|
Key Market Trends
Financial Services Accounts for the Largest Market Share
- Digital ID verification is increasingly becoming a vital part of banking, and the industry is expected to command a significant share of the global market during the forecast period. It is one of the highly regulated, governed industries, and it is also prone to identity frauds that augment the demand.
- Banks and financial service providers, including pension and insurance providers, have a stringent identity and personal data requirements, often known as the ‘Know Your Customer (KYC) requirements. Whether opening a bank account, switching accounts, taking out life insurance, or accessing pension records, a customer’s identity, several such attributes are required to be gathered and verified as part of a firm’s risk-based assessment and legal obligations.
- Additionally, Metal Pay, a peer-to-peer payments platform that allows users to buy, sell, trade, and send crypto using cryptocurrency trading pairs or fiat money, wanted to differentiate itself from its competitors by offering a quick and seamless account opening process. The company had requirements to comply with strict AML and KYC requirements, so identity verification during the account opening process became a critical component in minimizing risk and eliminating fraud.
- Globally, the financial industry is on the verge of a digital revolution, with an increasing propensity toward fintech to promote digital payments, where fintech operates with customers digitally, similar to banks and financial institutions’ work. The growing fintech investments worldwide are expected to influence the adoption of identity verifications as competition increases and vendors intensely focus on gaining new customers.
- Furthermore, new government regulations, such as the European Union’s Revised Payment Services Directive (PSD2), require banks to provide each other with access to account information and transaction data. This suggests that there is more incentive than ever for a unified digital identity system that seamlessly allows users to verify their identities across a range of FIs.
- In October 2020, Jumio released a new video verification solution with face biometrics for customer onboarding by businesses in regulated industries. Dubbed as Jumio Video Verification, the tool has been created specifically for regulated businesses, such as banks, fintech, cryptocurrency exchanges, and digital wallets.
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Asia Pacific to Witness Significant Market Growth
- The Asia-Pacific region is home to some densely populated countries, such as India and China. The region is one of the fastest adopters of technology with increasing internet penetration. Also, as these emerging economies adopt digitalization, the risk of breach of customer data and data channels has been growing. The demand for the prevention of identity theft solutions has been increasing in the region.
- Furthermore, Asia-Pacific is one of the fastest-growing regions in terms of GDP, which induced expansion of the existing corporates and new startups. It created the demand for fast, secure, and paperless digital transactions across these growing corporates, increasing the need for secure identity verification solutions to prevent data breaches.
- Moreover, countries like Singapore, one of Asia’s most advanced nations in the digital banking segment, have the widest variety of digital offerings in Asia. Globally, Singapore has the second-highest inclination for digital banking. However, the growing number of multinational corporations in Singapore also makes the country vulnerable to cyber attacks.
- In 2020, the Singaporean government launched the SingPass digital identity platform, which allows secure digital signatures for property caveats. This initiative is in line with the digital government blueprint target to enable citizens to complete between 90% and 95% of their e-government transactions without leaving their homes by 2023. This project is expected to allow for digital document signing on several platforms. It is also likely to extend into the corporate use ecosystem to benefit businesses in the private sector, particularly those in legal and financial services and telecommunications.
- Further, In June 2021, Prove, the modern way of proving identity with just a phone number, integrated TransUnion’s TruValidate identity verification feature into its offering to launch a new, instant, digital identity solution in Hong Kong. The launch into this new market continues Prove’s expansion of its Phone Identity Network into approximately 60 countries worldwide.
- Moreover, due to the pandemic, people and businesses have been increasingly resorting to digitalization as the new normal, increasing the number of digital transactions in the region. Leveraging this opportunity, Mastercard, Australia Post, and Deakin University expanded tests of ID, Mastercard’s digital identity service, to verify students taking exams online. The platform represents an opportunity to create new ways for people to confirm their identity without handing over any physical documents when completing an application, accessing benefits, booking accommodations, and more.
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The identity verification market is highly fragmented with numerous competitors and many competing technologies that provide intense rivalry among the players. Moving forward, acquisitions and collaborations of large companies with startups are expected, which are focused on innovation. Some of the key developments in the area are:
- April 2021 - Orange, one of the multinational telecommunications company, and Onfido, one of the global identity verification and authentication provider, announced a partnership to automate the verification process for Orange Flex, making signing up for a mobile plan faster and easier than before. Onfido's technology verifies users' identities using artificial intelligence (AI) and faces biometrics, allowing for additional convenience.
- January 2021 - A US-based financial services firm, SWBC partnered with Finicity to help meet the National Automated Clearing House Association’s (NACHA) 2021 requirements for ACH transactions that allow better anti-fraud controls. SWBC gained access to Finicity’s Open Banking platform Finicity Pay for instant account validation of online Automated Clearing House (ACH) payments.
- June 2021 - SimpleNexus, a homeownership platform for loan officers, borrowers, real estate agents, and settlement agents, announced an integration with Finicity’s Mortgage Verification Service (MVS). This will allow lenders to streamline the verification of applicants’ assets, income, and employment using a single embedded service.
- May 2021 - Acuant partnered with Airside to prioritize privacy in handling biometrics and personal data for mobile identity verification processes, allowing for reopening travel and public places conveniently and cost-effectively.
Table of Contents
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Threat of New Entrants
4.2.2 Bargaining Power of Buyers/Consumers
4.2.3 Bargaining Power of Suppliers
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Assessment of Impact of COVID-19 on the Industry
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Adoption of Solution Through Stringent Regulations and Need For Compliance
5.1.2 Adoption of BYOD Trends in Enterprises
5.2 Market Challenges
5.2.1 Budgetary Constraints During the Adoption of Identity Verification Solutions
5.3 Market View of Different Types of Solutions
5.3.1 Document/ID Verification
5.3.2 Digital/Electronic Identity Verification
6. MARKET SEGMENTATION
6.1 By Deployment Type
6.2 By End-user Industry
6.2.1 Financial Services
6.2.2 Retail and E-commerce
6.2.5 Other End-User Industries
6.3.1 North America
6.3.3 Asia Pacific
6.3.4 Latin America
6.3.5 Middle East and Africa
7. COMPETITIVE LANDSCAPE
*List Not Exhaustive
7.1 Company Profiles
7.1.1 Mastercard Inc.
7.1.2 Onfido Limited
7.1.3 Acuant Inc.
7.1.4 Intellicheck Inc.
7.1.5 Jumio Corporation
7.1.6 Trulioo Information Services Inc.
7.1.7 Mitek Systems Inc.
7.1.9 IBM Corporation (Trusteer)
7.1.11 Experian PLC
7.1.15 Neustar Inc.
7.1.16 Nuance Communications Inc.
8. INVESTMENT ANALYSIS
9. FUTURE OUTLOOK OF THE MARKET
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Frequently Asked Questions
What is the study period of this market?
The Identity Verification Market market is studied from 2018 - 2026.
What is the growth rate of Identity Verification Market?
The Identity Verification Market is growing at a CAGR of 13.29% over the next 5 years.
Which region has highest growth rate in Identity Verification Market?
Asia-Pacific is growing at the highest CAGR over 2021- 2026.
Which region has largest share in Identity Verification Market?
North America holds highest share in 2020.
Who are the key players in Identity Verification Market?
Mastercard Inc., Onfido Limited, Acuant Inc., Intellicheck Inc., Jumio Corporation are the major companies operating in Identity Verification Market.