The identity verification market is expected to grow at a CAGR of 13.1% over the forecast period 2020 to 2025, according to ResearchAndMarkets.
Adoption of solutions through stringent regulations and the need for compliance are influencing the market growth. The regulatory authorities have now become more stringent toward KYC (Know Your Customer) and AML (Anti-money Laundering) compliance, among reporting entities.
Digital/electronic identity verification solution accounts for significant share
Digital identity verification is a market segment of distinct, coordinating products, wherein large vendors have portfolios of established products, while small vendors are constantly innovating to capture better market shares.
The market is witnessing a consumer paradigm shift from manual identity verification systems to an electronic credentialing system that allows personal identity devices to interact.
Each interacting device has an installed identity engine that acquires, holds, issues, and uses electronic credentials (e-credentials). These electronic credentials can be installed on personal identity devices, like smartphones, tablets, laptops, embedded systems, and/or personal computers.
- According to the Identity Theft Resource Center, in 2019, 525 data breaches were reported in the United States health/medical sector. Ten years earlier, the number stood at 70 breaches. With each data breach, the medical records are published on the dark web that exposes patients’ date and place of birth, credit card info, etc. According to the same source, it was found that data breaches in the medical and healthcare sector constituted 35.64% of all data breaches in the United States in the measured period.
- For instance, in June 2019, Quest Diagnostics exposed close to potential 11.9 million patients’ records. Furthermore, in July 2019, Quest’s rival, LabCorp, was the target of a cyberattack that resulted in the company pulling parts of its IT system offline. The ransomware attack cost LabCorp $24 million to address.
Asia-Pacific to witness significant market growth
Asia-Pacific is expected to provide significant market growth for identity verification over the forecast period. In recent years, the region witnessed accelerated growth in digital banking sector, where more fintech and newly licensed virtual banks are approaching this market to address the unbanked segment, while traditional banks are being in transformation stage to manage costs and achieve operational efficiency in this increasingly competitive landscape.
However, digitization has exposed businesses to new risks, such as online identity fraud, account takeovers, and data breaches.
- Fraudsters are increasingly growing advanced with the sophisticated technologies they now use to impersonate legitimate users. Deepfake technology poses a growing identity threat by using advanced artificial intelligence for creating seemingly real videos that take a person in an existing image or video, and it replaces them with someone else’s likeness.
- More Asian companies are integrating real-time liveness detection capabilities into their eKYC systems that ensure the remote user is physically present and can defend against spoofing attacks. As the digital economy grows, multi-factor biometric identity verification and certified liveness detection technologies are trending to evolve accordingly, to better serve and address the changing security needs of business and consumers.
- India experienced a rapid increase in cybercrime registration, with the country ranking fifth in terms of the overall DNS hijacks. According to Gemalto, India accounts for 37% of the global breaches in terms of records compromised or stolen. With the increasing number of malware and ransomware attacks in the country, it states a significant factor in driving the adoption of identity verification solutions.