US Hardware OTP Token Authentication Market Size

US Hardware OTP Token Authentication Market Analysis

The United States Hardware OTP Token Authentication Market is expected to register a CAGR of 6.2 % during the forecast period between 2021 - 2026. The United States is the largest contributor to breach activity with 2,330 breaches reported, with the United Kingdom positioned 2nd, far behind with reported 184 breach reports. The number of breaches, 2,330, in the United States, led to total exposed records of 2,317,065. This led to personal information being compromised. With such a cyberattack, the adoption of hardware OTP token is highly required in the country.

• Increasing investments from the Banking and Finance Industry drives the market. As of 2018, at least 28 financial services companies out of all companies present in Fortune's Global 500 listing have decided to locate their office headquarters in the United States to take advantage of its creative, competitive, and comprehensive financial services sector. Further, with increasing expansion, the increasing cyberattack is highly expected.
• Instances such as, in March 2019, a hacker gained access to Capital One credit card applications for consumers and small businesses. Capital One detected the breach in July. According to the bank, about 140,000 social security numbers and 80,000 linked bank account numbers were exposed in the United States. According to Duo Security, 19% of government agencies use hardware authentication tokens and 5% of the banks. To address such issues and prevent it from the data breach, the demand for hardware OTP token authentication will increase further in the forecasted period.
• A growing number of identity threats are driving the market. The Consumer Sentinel Network (which is maintained by the Federal Trade Commission (FTC)) tracks consumer fraud activities and identity theft complaints filed with federal, state, and local law enforcement agencies and private organizations. Out of the 3.2 million identity theft and fraud reports received in 2019, 1.7 million were fraud-related, about 900,000 were other consumer complaints, and about 651,000 were identity theft complaints. These instances highly provide a necessity for the adoption of hardware authentication in the country.
• However, legacy hardware-based two-factor solutions are wretchedly inadequate and expensive for the mass scale deployments necessary for many of today's online consumers, employees, and partner-focused applications and web portals. Further, currently, software OTP, SMS, email, biometrics, etc., are available substitutes to hardware OTP tokens, which caters to the challenge for market growth.
• Further, before COVID-19, cybersecurity was already a major concern for governments, businesses, and individuals. Now, the threat of a major data breach is greater than ever during the pandemic. Passwords are one of the most vulnerable targets of attacks. Compromised credentials are responsible for over 80% of all breaches, according to the 2019 Verizon Breach Investigations Report. The government is more focused on passwordless authentication during the pandemic and after the pandemic. This significantly challenges the market growth in pandemic and after the pandemic.