Spending on digital identity verification by businesses will reach $16.7 billion in 2026, from $9.4 billion in 2021.
The new study from Juniper Research has found this 77 percent growth will be fuelled by the rapidly growing need to digitally onboard users, which has accelerated during the pandemic.
The research identified that, while the pandemic accelerated digital transformation, many industries had already been increasing digitisation, reflecting shifting customer appetites and opportunities for operational efficiency.
The report also found that the global volume of identity verification checks will exceed 92 billion in 2026, from 45 billion in 2021.
While banking and financial services are major drivers of this growth, the broadening of identity verification into areas including remote onboarding for mobile network operators or for digital gambling will create significant opportunities for vendors over the next five years.
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Deploying new identity verification services
The research says seamless digital onboarding “is the minimum requirement” in the post-pandemic environment. Additionally, with user are demanding processes that are both low friction and high security, the firm recommends using artificial intelligence (AI) for ongoing, behavioural analytics.
The research indicates that banking and financial services will account for almost 62 percent of digital identity verification spend by businesses by 2026. This, says the firm, reflects how critical digital verification is in helping banks meet severe regulatory requirements in a complex digital environment.
“Digital-only banks have shown that fully digital Know Your Customer [KYC] can work and is very engaging for the user, therefore the pressure is on for traditional banks to deploy new identity verification services,” said research co-author Vladimir Surovkin.
“Managing this transition quickly and getting the user convenience/security balance right will determine overall success.”