The global passive authentication market was worth USD 1620 million in 2021 and is projected to reach USD 10439 million by 2030, registering a CAGR of 23% during the forecast period (2022-2030).
Passive authentication is a procedure or method that uses behavioral patterns to verify a customer's or user's identification. Biometric, contextual, correlative authentication, and device identification, are among the most common behavioral authentication patterns. Multi-factor authentication is included in passive authentication to provide further protection and control and assist enterprises in removing the need for password-based security methods.
Passive authentication techniques have helped enterprises expand their reach in recent years by integrating new capabilities and providing new chances to their customers. One of them is the provision of easy-to-use authentication services. Purilock, a Canadian provider of passive authentication services, provides passive authentication to facilitate rapid authentication. The invisible MFA system from Plurilock ADAPT is a type of passive authentication that adds numerous more identity verification elements to existing login prompts. Alternatively, identification signals are captured as users enter their login and password, allowing for stronger identity authentication.
Furthermore, passive authentication services are now easier to implement due to the rapid progress of the personal digital electronics technology business, which has allowed users to carry a range of sensors and resources in their pockets. This simplifies and speeds up user authentication, which impacts the passive authentication market's growth.
By swiftly verifying known users and customers utilizing seamless data gathering and pattern recognition, passive authentication saves time for the company and its users. These instruments determine writing/typing patterns, walking habits, and other characteristics. For example, regardless of their typing, each person has distinct movement patterns. When these patterns are integrated with machine learning, a clear and precise identity signature for that person is created—sensors on smartphones, wearables, and PDAs track users' walking and movement patterns similarly.
These are then used to identify and authenticate the individual user, granting them seamless access to specific services like faster monetary transactions and quick sign-on. Therefore, the market is anticipated to experience steady growth due to enhanced accessibility and time-saving capabilities.
There has been a rise in data privacy concerns among consumers in the past few years, owing to the rise in cyberattacks and data theft worldwide. This has increased the awareness about data privacy and thefts and raised concerns about the use of personal data. In addition, faster passive authentication methods are anticipated to necessitate tracking and storing various user data, such as their location, mouse movements, walking & running patterns, and others. These data collections can cause ordinary users to become concerned about their data usage.
According to a 2018 survey published by the global security firm RSA Security LLC., more than 49% of U.S. citizens have agreed that data breaches and their detection have become more accessible than in past years. Furthermore, 62% of these consumers say that the company is at fault for data breaches. As a result, companies are projected to concentrate on protecting user data, which can be done by reducing data collection and reliance on third parties. These factors limit the growth of the passive authentication market.
Recent advances in passive authentication technology have created numerous opportunities to grow the stagnant authentication market in the coming years. The capabilities of the passive authentication technologies have been extended by modern high-performance servers that allow for real-time processing and much faster response times that are essential for the users to have a seamless experience without the need to remember different login credentials for various services in a single platform or environment. Furthermore, the surge in popularity and advances in cloud computing solutions, the presence of the Internet of Things, sensor technology, and other similar technologies, as well as high versatility in passive techniques, foster the development of passive authentication technology, in turn boosting the market growth.
The global passive authentication market share is segmented by component, function, industry vertical, organization size, deployment mode, and region.
Based on components, the market is segmented into solutions and services. The solution segment was the highest contributor to the market and is estimated to grow at a CAGR of 23% during the forecast period. Passive authentication solutions enable retailers to securely certify their customers to protect their financials by taking advantage of human behavior factors while improving customer experiences. These solutions are deployed in various industry verticals such as banking, financial services and insurance (BFSI), government, Telecom & IT communications, retail & consumer goods, health, media & entertainment, and others (education, travel, and hospitality). Due to rapid technological improvements, companies are also introducing novel solutions with integrated various ways for identification and fraud prevention, such as voice and facial biometrics. As a result, such variables contribute to market expansion.
The service segment is the second-largest market. During the forecast period, the need for passive authentication is expected to develop due to an increase in the prevalence of cybercrime and a rise in demand for data security worldwide. In the near future, growth in the number of cybercrimes such as identity theft, data breaches, and hacking is expected to enhance demand for passive authentication platforms and services.
By function, the passive authentication market growth is segmented into compliance management, marketing management, risk management, and others. Compliance management is the dominant segment. It is projected to grow at a CAGR of 22% during the forecast period. Ongoing compliance requires centralized coordination of numerous resources, actions, projects, and people. Information security and privacy compliance requirements are critical because they are projected to impact the acquirer's business objectives, regulatory profile, and valuation model, mainly if the new acquisition introduces an increased risk of information security or privacy-related liability. These factors drive the growth of the market.
Marketing management is the second largest segment. The rise in cyberattacks on the marketing management tools of the enterprises for theft of data and new marketing plans boost the need for passive authentication solutions for the organization. The marketing management solutions have secure data that must be authorized carefully. Hence, passive authentication solutions are adopted by the organization to strengthen security. This drives the growth of the market.
Risk management is the fastest-growing segment. Implementing a cyber risk management strategy helps identify the threats to an organization. Risk-based authentication, which includes behavioral biometrics as a criterion for risk assessment, is the best way for organizations to protect customer data. This allows for maximum security with minimal interruptions to the user experience. Moreover, advancements in risk management authentication technologies and the adoption of cloud-based solutions offer ample opportunities for market growth.
By deployment model, it is segmented into on-premise and cloud. The on-premise segment was the highest contributor to the market and is estimated to grow at a CAGR of 22% during the forecast period. On-premises applications offer many security, flexibility, and customization benefits. These factors drive the growth of the on-premise market. In addition, technological advancements in cloud-based services and stiff competition among SMEs are providing excellent opportunities for market development during the forecast period.
The cloud segment is the fastest growing. The significant contribution to the adoption of the cloud has been in software (service) applications. IT companies worldwide are adopting Software-as-a-service (SaaS) solutions in their work environment. The main reasons for this move include cost reduction, ease of accessibility, and speed in the boarding process. Therefore, there is a need for the adoption of passive authentication solutions to manage cloud data protection. In addition, various advancements in cloud solutions and the adoption of new technologies are providing excellent opportunities for the growth of the passive authentication market.
By organization size, the global passive authentication market forecast is divided into small & medium enterprises and large enterprises. A small and medium enterprise is the dominant segment. The passive authentication market for SMEs is projected to grow at a CAGR of 23% during the forecast period. The global stagnant authentication market is experiencing growth due to increased server visibility leading to the adoption of new and innovative passive authentication solutions. In addition, the rise in the use of passive authentication solutions by medium- and small-sized businesses across the globe is expected to accelerate the development of the overall market.
Large enterprises are the fastest-growing segment. It includes companies that have employee strength of more than 1,000. These companies comprise deal with vast data with high privacy. Therefore, there is an increase in the need for effective passive authentication owing to the enormous threat of attacks on these large enterprises.
By industry vertical, the global passive authentication market analysis is classified into BFSI, Government, Telecom & IT, retail & consumer goods, healthcare, media & entertainment, and others. The BFSI segment was the highest contributor to the market and is estimated to grow at a CAGR of 22.6% during the forecast period. There is a need to increase the demand for robust authentication technologies with passive authentication owing to the rise in data breaches. Most modern smartphones are also equipped with state-of-the-art technology like accelerometer, gyroscope, touch screen, and GPS. In behavioral authentication, a user is authenticated in a unique way to interact with the phone, such as their typing or swiping pattern or the angle at which they place the device. It is not just limited to smartphones and tablets. Top Behavior Solutions can extract and analyze more than 500 unique parameters from mouse and trackpad patterns to typing cadence and browser events. They track users' interactions with online and mobile applications to detect fraudulent conduct and assign a risk score to each transaction for banks and financial institutions.
The second-largest segment is telecommunications and information technology. A cloud-deployed network connection is used to deliver cloud-based services. Through information technology (IT) infrastructure hosted by cloud technology providers, these services help minimize overall costs while giving extraordinarily flexible and scalable access to passive authentication solutions. The expansion of the market is projected to be aided by the rise in demand for digital services. Companies can use passive authentication systems to help with digital transformation and consumer engagement strategies.
The healthcare segment is the fastest growing. Increased security data breaches across the healthcare sector and increased customer enhancement are the factors that propel the demand for the passive authentication market in the healthcare sector. Moreover, technological advancements in passive authentication solutions and acceptance of passive authentication solutions across the industry provide ample opportunities for market growth.
By region, the global passive authentication market is studied across North America, Europe, Asia-Pacific, and LAMEA.
North America is the dominant region. It is predicted to grow at a CAGR of 21.3% during the forecast period. It is experiencing several startups engaging in the development of passive authentication technologies. Unified's machine learning system constantly learns from users. Marketing analytics tools and the presence of players firmly established in the market from the beginning are the factors that boost the growth of the passive authentication market. In addition, government agencies, companies, and third-party administrators are channeling their efforts to create customer-centric products that contribute to market growth.
Asia-Pacific is the second-largest and fastest-growing segment. It is estimated to reach USD 2655 million by 2030 at a CAGR of 25% during the forecast period. It is expected to emerge as a lucrative region within the market, owing to many small and medium-sized enterprises (SMEs) in emerging countries, such as Australia, New Zealand, China, and Japan. In the coming years, most passive authentication vendors are expected to increase their partner networks in the Asia-Pacific region, as it is an untapped market. Increased demand among enterprises is expected to drive the growth of the passive authentication market in all countries of the Asia-Pacific region to deliver an enhanced user experience, as well as manage the increase in the need for frictionless authentication between installations.
Europe is the world's third-largest continent. Due to increased authentication and awareness of passive authentication solutions, it will likely hold a significant market share during the projection period. During the forecast period, the market for passive authentication is expected to develop due to an increase in the prevalence of cybercrime and a rise in demand for data security worldwide. Similarly, as the frequency of cybercrimes such as identity theft, data breaches, and hacking rises, so does the need for passive authentication platforms and solutions.
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