Identity Verification Market, By Deployment Type (On-premises and Cloud), By Type (Non- Biometrics and Biometrics), By Enterprise Size (Large Enterprise and Small & Medium Enterprise), and region (North America, Europe, Asia-Pacific, Middle East and Africa and South America).
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.
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.
North America to Dominate the Market