Identity Verification Market – Trends Forecast Till 2030

Market Snapshot

Market Overview

The global Identity Verification Market size was estimated at USD 14.7 billion in 2023 and is projected to reach USD 39.2 billion in 2030 at a CAGR of 15.8% during the forecast period 2024-2030.

The identity verification market is experiencing significant growth due to the rising frequency of identity-related fraud and cybercrime, driving digitization initiatives across various sectors. The increased emphasis on data security, spurred by government regulations and company policies, has further accelerated the demand for advanced identity verification systems. Technologies such as artificial intelligence (AI), machine learning (ML), and automation are increasingly being integrated into these systems, providing new opportunities for suppliers in this market.

Regulatory measures, especially in the financial sector, are creating numerous opportunities for market participants. Compliance with standards and the trend of bring-your-own-device (BYOD) and enterprise mobility are key factors propelling market growth. For instance, LexisNexis Risk Solutions Group launched LexisNexis Fraud Intelligence in November 2020 to help businesses reduce the risk of account opening fraud. This tool uses consumer application activity and identity events to generate a robust score, offering a comprehensive view of identity verification.

The COVID-19 pandemic further highlighted the need for robust identity verification measures as organizations moved to protect customers from increasing fraud risks. As digital channels became more prevalent, the risk of cyber-attacks grew, driving demand for effective identity verification solutions. Technologies such as blockchain-based identity verification, KYC norms, anti-money laundering (AML) measures, and identity verification in healthcare have become crucial in addressing these cyber risks.

Key companies in the market are heavily investing in research and development to innovate and launch products that tackle cyber-attacks and security concerns. Experian's launch of Work Report in November 2021 and AU10TIX's introduction of the AU10TIX App in July 2023 are examples of such initiatives. These products leverage AI and ML to provide quick and reliable identity verification, ensuring compliance with KYC regulations and reducing fraud risks.

The importance of identity verification lies in its ability to ensure that individuals are who they claim to be, thus preventing fraud, enhancing security, and building trust in online transactions. It is a critical measure for safeguarding sensitive information and services against unauthorized access. High-security environments, such as government offices and nuclear facilities, rely on stringent identity verification to maintain safety and security.

The market's growth is fueled by increasing financial crimes, evolving regulations, and the adoption of digital services. Advances in technology, particularly in AI and biometrics, are key drivers. The "State of Fraud and Financial Crime in the U.S." report by PYMNTS highlights that 68% of financial institutions have seen an increase in fraud attacks on credit cards, with fraud approaches becoming more sophisticated. Companies are responding by launching AI-driven solutions, such as Vouched's VouchedAuto, to streamline the KYC process and combat fraud.

The pandemic underscored the critical role of identity verification solutions, which provided touchless verification services to meet KYC requirements and prevent the spread of the virus. As the digital landscape continues to evolve, the identity verification market is set to expand, driven by the need for secure, reliable, and efficient verification methods.

Delvens Industry Expert's Standpoint

The identity verification market is rapidly growing, driven by increasing incidents of identity fraud, stringent government regulations, and the widespread adoption of digital services. This growth is propelled by advancements in biometric technologies, artificial intelligence, and machine learning, which enhance the accuracy and security of verification processes. The COVID-19 pandemic has accelerated digital transformation, increasing the reliance on online transactions and, consequently, the demand for robust identity verification solutions. The trend of bring-your-own-device (BYOD) in enterprises further fuels market expansion as organizations seek to secure access to sensitive data across various devices. Financial services, in particular, are witnessing significant adoption of identity verification to comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements, driven by regulations like the European Union’s Revised Payment Services Directive (PSD2). The shift towards mobile verification, enabled by the ubiquitous use of smartphones, is also amplifying demand. As global markets continue to digitalize, vendors are innovating to differentiate themselves, addressing evolving cybersecurity threats and user privacy concerns.

Market Portfolio

Key Findings

• On the basis of Deployment Type, the deployment type segment, comprising on-premises and cloud solutions, significantly aids the growth of the identity verification market. Cloud-based solutions are expected to grow at a higher CAGR due to their cost-effectiveness and ability to enhance business agility. These solutions offer scalability, ease of integration, and real-time updates, making them attractive to organizations seeking to optimize operations and respond swiftly to emerging threats. As companies increasingly adopt cloud technologies for their flexibility and reduced infrastructure costs, the demand for cloud-based identity verification solutions is poised to drive substantial market expansion in the coming years.

• On the basis of Type, the type segment, which includes non-biometrics and biometrics solutions, drives the growth of the identity verification market by addressing diverse security needs. Non-biometrics solutions are vital for fraudulent ID detection, remote customer onboarding, KYC/AML compliance, and business process automation. These solutions, enhanced by AI and ML technologies, enable proactive detection and remediation of suspicious activities and unauthorized access, ensuring robust security. As organizations strive to strengthen their security measures and comply with regulations, the demand for both non-biometrics and advanced biometric solutions fosters significant market expansion, meeting varied and evolving verification requirements.

• On the basis of Enterprise Size, the enterprise size segment, encompassing large enterprises and small & medium enterprises (SMEs), significantly drives the growth of the identity verification market by catering to distinct needs. SMEs, often constrained by limited resources and IT personnel, are increasingly vulnerable to cyber fraud. Identity verification software provides them with cost-effective, intuitive, and secure solutions to mitigate risks and comply with regulatory requirements like KYC/AML. Cloud deployment, particularly attractive for its affordability and scalability, enables SMEs to adopt advanced verification technologies without heavy infrastructure investments. This segment's adoption of identity verification solutions not only enhances security but also supports operational efficiency, fostering substantial market expansion.

• The market is also divided into various regions such as North America, Europe, Asia-Pacific, South America, and Middle East and Africa. North America held the largest Identity Verification Market share due to its high digitalization, strong technological infrastructure, presence of major industry players, and stringent regulatory frameworks like BSA and GDPR.

Regional Analysis

North America to Dominate the Market

• North America holds the largest share of the Identity Verification Market due to stringent regulatory frameworks across key industries like finance, healthcare, and e-commerce. Regulations such as KYC, AML, HIPAA, and GDPR mandate rigorous identity verification processes to ensure compliance and protect sensitive information. These regulations create a strong demand for advanced identity verification solutions, driving market growth. Additionally, North American businesses prioritize data security and customer trust, further bolstering adoption of robust verification technologies. The region's proactive stance on cybersecurity and regulatory compliance positions it as a leader in shaping the global identity verification market landscape.

Competitive Landscape

• Mastercard Incorporated
• Onfido Limited
• Idology Inc. (GB Group PLC)
• Intellicheck Inc.
• Jumio Corporation
• Trulioo Information Services Inc.
• Mitek Systems Inc.
• Veriff
• IBM Corporation
• AuthenticID
• Experian PLC
• TransUnion
• Lexisnexis Risk Solutions Inc. (RELX Group PLC)
• Pindrop
• ComplyCube
• Nuance Communications Inc.

Recent Developments

• In October 2022, AuthenticID introduced Identity Pass, a cutting-edge digital identity wallet designed as a unified solution for storing and managing various identity verification documents such as driver's licenses, identity cards, and passports.

• In June 2023, Experian unveiled 4D Credit, a comprehensive suite of services aimed at enhancing commercial lending portfolio management for lenders and offering crucial support to small businesses.

Reasons to Acquire

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Report Scope