Biometrics for banking and financial services market to reach $8.9 billion by 2026
The turn of next decade is expected to be more challenging for banks and financial institutions as security breaches become more sophisticated with technology advancements. Money laundering has become more widespread representing about 2%-5% of global GDP. One of the measures being actively pursued by banks is biometrics, since the technology assists in the creation of secure banking environment by reducing instances of identity fraud, establishing audit trail of transactions, and protecting financial data.
The shift towards biometrics is also being driven by the inability of traditional security measures such as PINs, passwords and tokens to effectively offer protection, particularly against the growing sophistication of intruder attacks.
The growing realization among banking customers about inadequacies of PINs and passwords in offering protection against sophisticated bank frauds and online threats is leading to high demand for strong security solutions such as those involving biometrics.
Further, steady increase in the number of password hacks in recent times reflects inadequate security associated with the use of passwords as access method. Driven by the growing need to offer protection against the rising instances of fraudulent transactions and identity thefts along with the ever-widening scale of frauds, banks are opting to invest into strong authentication measures.
Amid the COVID-19 crisis, the global market for biometrics for banking and financial services estimated at $4.4 billion in the year 2020, is projected to reach a revised size of $8.9 billion by 2026, growing at a CAGR of 12.8% over the analysis period, according to Global Industry Analysts. Fingerprint biometrics, one of the segments analyzed in the report, is projected to grow at a 13.4% CAGR to reach $6.2 billion by the end of the analysis period.
After a thorough analysis of the business implications of the pandemic and its induced economic crisis, growth in the face biometrics segment is readjusted to a revised 11.6% CAGR for the next 7-year period. This segment currently accounts for a 22.8% share of the global biometrics for banking and financial services market.
Biometrics for banking and financial services market by region
The biometrics for banking and financial services market in the U.S. is estimated at $1 billion in the year 2021. The country currently accounts for a 22.84% share in the global market. China, the world second largest economy, is forecast to reach an estimated market size of $1.8 billion in the year 2026 trailing a CAGR of 17.1% through the analysis period.
Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 7.6% and 9.9% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 10.9% CAGR while rest of european market (as defined in the study) will reach $2.2 billion by the close of the analysis period.
Global market for biometrics in BFSI sector continues to grow at a robust rate driven by the increasing focus of BFSI companies on offering highest security to customer transactions through use of biometrics-based authentication measures. The use of biometrics technology has the potential to reduce instances of fraud attributed to identity duplication.
As consumer preferences change and new payment methods are introduced, banks are being compelled to move towards digital transformation of payments and cards operations. Technology advancements are also leading to an increase in number of forgeries and frauds, whereby the need for solution that cannot be replicated is gaining prominence in the banking and financial services industry.
In the financial sector, the rise in fraudulent access to account due to increasing use of mobile and online banking services is enhancing the importance of access and identity management; governance of information security; and information security roadmap as important security initiatives implemented for financial organizations. However, growing complexity of threats and the lack of adequate budgets are challenging effective implementation of such security programs.
Face biometrics segment to reach $1.9 billion by 2026
Face biometrics utilizes unique facial characteristics to recognize and identify individuals. Face recognition is the most successful form of human surveillance and it includes the measurement of eyes, nose, mouth, and other facial features.
Commercialization of face recognition systems increased owing to an upsurge in the usage of multimedia video technology. This technology is generally used for applications such as surveillance, screening, criminal and law enforcement that include kiosks and booking stations. It could be also used in passport issuance applications, driver’s licensing and registration of voters.
Global market for face biometrics is estimated at $996.6 Million in 2020, and is projected to reach $1.9 billion by 2026 reflecting a compounded annual growth rate of 11.6% over the analysis period. Asia-Pacific constitutes the largest regional market for face segment, accounting for 23.1% of the global sales in 2020.
China is poised to register the fastest compounded annual growth rate of 15.2% over the analysis period, to reach $483.1 Million by the close of the analysis period.