Market Trends of Multi-factor Authentication Industry
This section covers the major market trends shaping the Multi-factor Authentication Market according to our research experts:
BFSI Segment is Expected to Witness Significant Growth
- Because security is critical in the financial sector, allied banking firms have spent a significant portion of their budget on security. Payment and financial services, for example, account for approximately 75% of cyber-attacks in the United Kingdom. Such developments have a positive impact on the market. Some initiatives, such as the World Bank Group's Identification for Development (ID4D), attempt to assist developing countries in implementing new systems that increase the number of citizens with official identification by leveraging new technologies.
- The BFSI sector is witnessing an increase in cloud workloads, with a large amount of data being moved to the cloud. Furthermore, the increasing integration of third parties, such as mobile wallets, combined with complex security infrastructure in which many vendors are deployed throughout the ecosystem, poses a significant security challenge in the sector.
- As a result, BFSI enterprises should adopt a zero-trust security model that needs stringent identity verification for every user and gadget attempting to access resources. This must be enforced with multi-factor authentication (MFA), which ensures security by requiring more than one piece of evidence to authenticate a user.
- Financial information is one of the most sensitive pieces of information stored on the internet, and it is estimated that online identity fraud costs more than a trillion USD annually. As a result of this scenario, banks are investing heavily in authentication solutions, with an annual expenditure of more than USD 1 billion, accounting for approximately 30% of the total security budget of banks. Furthermore, one of the primary reasons customers use fintech solutions is the ease of account setup and KYC.
- In May 2022, according to UpGuard, the most significant data breach in the financial industry worldwide between 2008 and 2022 was found in 2019 in the United States at First American Financial Corporation. This data breach exposed 885 million financial and personal records. The financial sector is particularly vulnerable to cyber attacks that result in data breaches.
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Asia-Pacific Expected to Witness Significant Growth
- The Asia-Pacific region is anticipated to be the fastest-growing region in the multi-factor authentication (MFA) market because of a higher level of implementation of bring your own device (BYOD) and choose your own device (CYOD) policies, as well as mobility services, which are increasing cyber-attacks and data breaches.
- CREALOGIX has released a solution to major banks in Asia, providing customers with one single app for banking and authentication. As part of a multi-factor authentication system, a hardware device no longer generates a One-Time-Password (OTP) hardware token for each action. The soft token takes the place of the hard token and offers all of the security benefits of multi-factor authentication.
- Asia Pacific is home to many well-established SMEs that deploy MFA to protect themselves against advanced cyber threats. Rising internet and smartphone penetration is a powerful driving force in the Asia Pacific, increasing the demand for effective MFA solutions and services. Security and fraud concerns have arisen as IoT, AI, and big data have increased. Regarding identity fraud, APAC's BFSI sector is the most targeted. This will increase the demand for MFA solutions in the region.
- Furthermore, hacking and monetary losses are on the rise in places like China. The primary goal of black hat hackers is to steal information for monetary gain. This is a primary consideration for all financial institutions because they control both personal and financial information. It is entirely simple for someone to capture the usernames and passwords of other people by employing various techniques such as sniffing, installing Keylogger, and so on.
- As of March 2021, 40,300 hacking attempts were suspected from entities in China to sabotage financial, utility, and infra services in the region. Moreover, companies realize that implementing two-factor authentication will reduce the losses suffered by financial institutions in terms of money and brand trust.
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