Digital identity is the information used by the computer systems to represent a person, organization, application, or device. The term digital identity denotes a set of electronically captured and stored attributes and credentials that can uniquely identify a person. The information processed by the computer systems allows for the assessment and authentication of a user interacting with a business system without the involvement of human operators.
Digital identity solutions have been witnessing a significant surge in demand to manage user data and collect information generated by a person's online activity, including usernames and passwords, online search activities, birth date, social security, and purchasing history. The digital solutions market is expected to grow with a considerable rate during the forecast period, against a backdrop of globalization and technological advancements, such as AI, blockchain, and machine learning. The below figure depicts the digital identity lifecycle.
Impact of COVID-19 on the Adoption of Digital Verification Solutions
The evolution of digital identity solutions from passwords to biometric authentication, such as fingerprint, facial recognition, retina scan, handprint, and voice recognition, enables businesses to operate in a contactless manner. The COVID-19 pandemic has intensified the need for digital solutions more than ever. Companies around the world are switching to contactless digital and scanning solutions to prevent the spread of the virus.
On the other hand, the ever-increasing cases of fraud have made it vital for authorities to have a sound KYC solution to track and tackle fraudsters. The banking and finance sectors are allocating notable budgets to comply with anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations. Constant changes and improvements in the mandatory regulations against fraudsters pose a challenge for businesses to stay a step ahead of cybercriminals. Thus, digital identity solutions are foreseen as a potential market to make processes smooth and accurate.
Increasing criminal activities have made customer on-boarding difficult, compelling financial institutes to channelize efforts in verifying customers. Implementing digital identity solutions in retail, e-commerce, finance, healthcare, education, and other sectors are also proving to be useful in the fight against the ongoing pandemic. With most businesses working from home, laying off, and re-hiring employees, these verification solutions provide a way to authenticate a person without any direct contact.
Rising Cybercrime and Fraud in the Healthcare and Banking Sectors
Increasing cases of identity thefts and growing focus on enhanced end-to-end customer experiences drive the market growth. Striking growth in demand for online ID verification due to COVID-19 is fuelling market adoption. Businesses are switching to remote working, further surging the demand for video-conferencing. Rising online doctor consultation and increasing demand for telemedicine drive the market growth.
Healthcare organizations are adopting the ‘Know Your Patient’ approach, where they use an online digital identity verification system that verifies patients by comparing their photos with a government-issued ID. Rising incidences of health insurance fraud and surging focus on patient info security drive the market growth. The market players are investing in digital platforms to mitigate the impact of the outbreak and practice social distancing for long. Therefore, the digital identity verification market inhibits growth during the pandemic.
Social Distancing Practices and Emerging Contactless Business Strategies
The future holds a promising growth opportunity for the players in the digital identity solutions market. The active players, on the other hand, are arduously working to develop new ways in order to serve customers and build better risk profiles. Future science is expected to unlock opportunities in terms of earning revenue from other businesses that lack access to such customer information. With digital identity, firms might look beyond their current business, and serve as a broker between parties and provide identity services to the public sector. They can also eliminate third-party data mining in the evaluation of customer credit history and extend non-financial advisory work.
Digital Identity Solutions Market: Segmentation
Rising Adoption of Biometric Solutions in the Corporate Sector
Increasing adoption of Bring Your Own Device (BYOD) trends in enterprises is significantly driving the solution segment. Fingerprint, retina scanning, and facial recognition are becoming widely popular among authorities. In the coming years, biometric scanners will be used to verify an employee's identity to grant access to corporate data via a BYOD device.
In September 2019, IDEMIA launched MFace Flex, a facial biometric solution to simplify user experience and crowd flow for easier travel at high traffic locations. DuoSecurity Inc. estimated that by 2022, about 60% of large and global enterprises and 90% of midsized enterprises (MSEs) are likely to implement digital authentication methods turning to password fewer strategies
On-Premise Solutions to Witness High Demand among Large Enterprises
The on-premises deployment mode segment is expected to grow at a considerable CAGR on account of shifting customer preference towards on-premises solutions for ease of use. In addition to this, on-premises deployment mode is extensively used by the government and defense sector to identity-related risks.
Increasing Cases of Data Breaches to Prompt the Need for Effective Digital Identity Solution across North America
The U.S. spearheads the digital identity solutions market in North America as the country is backed by the presence of leading market players. The digital signature and electronic authentication law (SEAL) established by the U.S. Senate has made digital verification mandatory for all forms of digital transactions. Recently, Finastra, a fintech company, developed an eSignature solution for the U.S. banks to reduce paper use, storage cost, and courier fees.
Digital identity solution has become a key component of ensuring patient security and monitoring amidst the alarming spread of the coronavirus. Healthcare organizations are switching to Know Your Patient approach, and several online pharmacies are adopting age verification approaches.
Increasing cases of data breaches have compelled the authorities to adopt a secure platform, which includes new forms of identity management, leveraging artificial intelligence and machine learning to eliminate access gaps that impact clinical and operational workflows without affecting the risks to health data security and privacy.
Digital Identity Solutions Market Segmentation
By Organization Size
By Industry Vertical
Frequently Asked Questions (FAQs)