Complexity of Authentication and Identity Fraud in the BFSI Sector Fuels Growth of Digital Identity Management Solutions Market

The digital identity management solutions market is projected to reach $70.8 billion by 2030, growing at a compound annual growth rate (CAGR) of 15.4% from 2023 to 2030.

The BFSI (Banking, Financial Services, and Insurance) sector relies heavily on IT infrastructure to deliver essential services, including mobile, online, and core banking. A significant concern within this sector is identity fraud, particularly during financial transactions via online banking portals and insurance applications. As technological advancements continue to evolve across BFSI channels, banks and financial institutions are experiencing data breaches and identity fraud at an alarming rate. For example, TransUnion (U.S.) reported that digital fraud attempts against financial services companies surged by 150% in 2021. Moreover, the Nilson Report revealed that global payment card fraud losses surpassed USD 32 billion in 2021.

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Digital identity fraud poses a substantial challenge for banks, prompting them to invest significantly in digital identity management solutions. These solutions aim to safeguard customers and digital assets from manipulation and fraud. In January 2022, Axis Bank Limited (India) collaborated with MinkasuPay (India) to enhance the security of net banking payments by implementing biometric fingerprint and face ID authentication solutions. Banks are leveraging digital identity management technologies in various applications, such as cash withdrawals from ATMs and identity verification for mobile banking through fingerprints or a combination of face and voice recognition.

Recent key developments in the digital identity management space include:

– In January 2022, the Federal Deposit Insurance Corporation (FDIC) (U.S.) and the Financial Crimes Enforcement Network (FinCEN) (U.S.) initiated Tech Sprint to develop solutions for financial institutions and regulators aimed at assessing the effectiveness of digital identity proofing, which involves collecting, validating, and verifying personal information. Through Tech Sprint, FDIC’s tech lab (FDITECH) and FinCEN seek to enhance efficiency and account security, reduce fraud and identity-related crimes, curb money laundering and terrorist financing, and build customer confidence in the digital banking landscape.

– In November 2022, Daon, Inc. (U.S.) entered into a partnership with GoTyme Bank Corporation (Philippines) to provide its digital identity capture and authentication platform, Daon IdentityX, for the GoTyme banking app. This platform utilizes document-centric identity-proofing technology to help minimize barriers to consumer account setup.

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– In January 2022, Axis Bank Limited (India) partnered with MinkasuPay (India) to offer a seamless and secure net banking experience through biometric authentication solutions.

– In November 2021, IDEMIA (France) teamed up with Federal Bank Limited (India) to implement biometric authentication for bank employees.

The rising frequency and sophistication of authentication and identity fraud in the BFSI sector are significant drivers for the growth of digital identity management solutions. As financial institutions increasingly prioritize security and customer trust, the demand for robust digital identity solutions is expected to rise, ensuring that customers can safely navigate the digital banking environment.

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Scope of the Report

Digital Identity Management Solutions Market, by Type                              

• Identity Verification & Authentication Solutions
• Digital KYC & Onboarding Solutions
• Zero Trust Security Solutions
• Digital ID Wallet Solutions

Digital Identity Management Solutions Market, by Offering

• Hardware
  • Scanners & Readers
  • Cameras
  • Smart Cards
  • Tokens
• Software
• Services
  • Professional Services
  • Managed Services

Digital Identity Management Solutions Market, by Application

• Workforce Identity Management
• Customer Identity Management
• Citizen Digital Identity Management
• Machine Identity Management
• Other Digital Identity Management Applications

Digital Identity Management Solutions Market, by Identity Type

• Biometric Solutions
• Non-biometric Solutions

Digital Identity Management Solutions Market, by Authentication Type

• Single-factor Authentication
• Multi-factor Authentication

Digital Identity Management Solutions Market, by Organization Size                       

• Small & Medium-sized Enterprises
• Large Enterprises

Digital Identity Management Solutions Market, by Deployment Mode                      

• On-premise Deployment
• Cloud-based Deployment

Digital Identity Management Solutions Market, by Sector

• IT & Telecommunications
• BFSI
• Government & Defense
• Manufacturing
• Retail & E-commerce
• Healthcare
• Energy & Utility
• Education
• Tourism & Hospitality
• Other Sectors

Digital Identity Management Solutions Market, by Geography

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • U.K.
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia-Pacific
  • China
  • India
  • Japan
  • South Korea
  • Rest of Asia-Pacific
• Latin America
  • Mexico
  • Brazil
  • Rest of Latin America
• Middle East & Africa
  • UAE
  • Israel
  • Rest of Middle East & Africa

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