Advanced Authentication Market Size, Share, and Industry Analysis, By Authentication Type (Multifactor Authentication (MFA), Biometric Authentication, and Token-Based Authentication), By Deployment (Cloud-based and On-premises), By Industry Vertical (BFSI, Healthcare, Government, Retail and e-Commerce, IT and Telecom, and Others) and Regional Forecast till 2032

The global advanced authentication market is witnessing rapid growth due to increasing demand for strong security measures. Rising incidents of data breaches and identity theft, particularly in industries, such as BFSI and healthcare, are driving the need for stringent regulatory compliance and the safeguarding of sensitive data. As a result, multifactor authentication and biometric authentication methods are gaining popularity. The widespread shift toward remote work has also contributed to the growing demand for secure and user-friendly authentication solutions.

• As per industry experts, over 50% of the workforce and around 20% of customer authentication transactions are expected to be passwordless by 2025.

In response to these demands, companies have been developing cutting-edge authentication solutions.

• November 2023: OneSpan introduced an addition, DIGIPASS FX1 BIO, to its Digipass Authenticators product line. This new physical passkey with fingerprint scan helps businesses embrace passwordless authentication while offering advanced level security against social engineering and account takeover threats. The new addition marks an important solution in the workforce authentication ecosystem and is particularly developed to secure corporate data and applications for a dispersed workforce.

Impact of Generative AI on the Advanced Authentication Market

Generative AI has significantly impacted the advanced authentication market, particularly in enhancing security measures and streamlining identity verification processes. However, there are also challenges as the technology presents risks related to data inaccuracy, cybersecurity threats, and concerns over intellectual property.

• As per industry experts, over 44% of respondents reported that their businesses experienced at least one of the risks mentioned above from the use of gen AI. (1,363 participants, survey period: February – March 2024) In addition, the participants also highlighted cybersecurity and explainability as the other major risks of the usage of generative AI.

Thus, in the coming years, the industry will be witnessing innovation in how AI will enhance authentication processes while being responsive to real-time threats.

Advanced Authentication Market Driver

Rising Cyber Threats and Regulatory Demands are Driving Market Growth

The advanced authentication market is primarily driven by the rising incidents of cyber threats, which push organizations to enhance security measures. Growing regulatory requirements for data protection also compel businesses to adopt more robust authentication solutions. In addition, the increasing adoption of digital transformation initiatives across various sectors boosts the demand for advanced authentication technologies.

Advanced Authentication Market Restraint

Cost Of Implementation Regarding Advanced Authentication Solutions to Hinder Market Growth

The key factor impacting market growth is the cost of implementation. Advanced authentication solutions often require significant investment in both technology and training, which can deter organizations, especially SMEs, from adopting them. In addition, the increasing sophistication of cyberattacks can undermine the effectiveness of advanced authentication methods, leading to concerns about security and reliability.

• As per Keeper Security insights, the cyber-attacks have become even more sophisticated. The surveyed respondents reported that AI-based attacks are the most serious emerging attack vectors and the most challenging to handle.

Advanced Authentication Market Opportunity

Adoption of Advanced Authentication Solutions across the Healthcare and BFSI Sectors to Accelerate Market Growth

The healthcare and BFSI sectors represent lucrative opportunities for advanced authentication solutions, especially biometric technologies. These industries require high levels of security to protect sensitive data and comply with regulatory requirements. Biometric solutions offer the ideal balance of security and convenience, making them highly attractive in these markets.

• As per Aware, Inc., over 64% of healthcare professionals surveyed by the Ponemon Institute said patient misidentification happens frequently. In addition, over 84% said they “strongly agree” or “agree” that misidentification can lead to medical errors that induce illness or injury.

Segmentation

Key Insights

The report covers the following key insights:

• Micro Macro Economic Indicators
• Drivers, Restraints, Trends, and Opportunities
• Business Strategies Adopted by the Key Players
• Impact of Generative AI on the Global Advanced Authentication Market
• Consolidated SWOT Analysis of Key Players

Analysis by Authentication Type

By authentication type, the market is segregated into multifactor authentication (MFA), biometric authentication, and token-based authentication.

In 2023, multifactor authentication governed the market, driven by its ability to offer a layered defense mechanism, which significantly reduces unauthorized access. In addition, there is a rising demand for MFA authentication types across key industries such as BFSI, healthcare, and IT. These sectors adopt such solutions owing to stringent data regulations.

During the forecast period, biometric authentication is expected to lead the revenue due to its convenience, growing adoption among industries, and advancements in AI-driven security. Businesses across the globe are now prioritizing secure yet user-friendly solutions, which is further expected to bolster segmental growth.

Analysis by Deployment

By deployment, the market is segregated into cloud-based and on-premises.

Cloud-based solutions are becoming more prevalent due to their scalability, easy integration with cloud services, and cost-effectiveness. Companies also favor these solutions as they support remote workforces and hybrid cloud environments.

On-premises deployment is still relevant in highly regulated industries, such as BFSI, where companies need full control over data security. However, the segmental revenue is losing traction as businesses move toward cloud-based services.

Analysis by Industry Vertical

By industry vertical, the market is segregated into BFSI, healthcare, government, retail and e-commerce, IT and telecom, and others.

The BFSI sector dominates the market in terms of adopting advanced authentication methods owing to strict regulations and the necessity of safeguarding financial data. Besides, the healthcare sector is also following the sector propelled by the need to protect patient data and adhere to compliance requirements.

During the forecast period, the government sector is expected to showcase a promising growth rate owing to factors such as the sectors adopting secure authentication methods to safeguard critical infrastructure. In addition, the IT and telecom sector will also showcase notable growth rate expansion fueled by the expansion of cloud services, growing demand for secure remote work solutions, and increasing interconnectivity of digital systems.

Regional Analysis

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In terms of geography, the global market is segmented into North America, Europe, Asia Pacific, South America, and the Middle East & Africa.

North America dominates the market, majorly due to its early adoption of digital transformation technologies, robust cybersecurity infrastructure, and government regulations, such as the National Institute of Standards and Technology (NIST) guidelines. In addition, the region also holds a high concentration of key market players, such as Google and Microsoft.

Asia Pacific is expected to witness the highest growth due to increasing digitization, the expansion of e-commerce, and the proliferation of mobile payments. Countries, such as China, Japan, and India are investing heavily in biometric authentication technologies to support digital banking and fintech services. In addition, the demand for advanced authentication solutions across the regional end users is increasing at an accelerated pace. For instance,

• August 2024: Baiduri Bank completed its strategic partnership with HID with the objective of enhancing its authentication and security processes across both its corporate and consumer banking platforms. The bank has installed HID Approve, driven by the HID Authentication Platform, as an integrated solution for customer identity verification.

Key Players Covered

The global advanced authentication market consists of key players, such as Okta and Microsoft, that offer flexible and secure identity solutions, such as MFA and biometrics. These companies cater to industries ranging from BFSI to healthcare, focusing on safeguarding sensitive data and ensuring regulatory compliance.

The report includes the profiles of the following key players:

• Okta (U.S.)
• Microsoft Corporation (U.S.)
• Thales (France)
• Duo Security (Cisco) (U.S.)
• RSA Security LLC (U.S.)
• Ping Identity (U.S.)
• OneSpan (U.S.)
• Symantec (Broadcom) (U.S.)
• IBM Corporation (U.S.)
• Alphabet Inc. (Google LLC) (U.S.)

Key Industry Developments

• In August 2024, Axiad secured around USD 25 million from Invictus Growth Partners in a funding round. The company expects to use this funding to bolster product development innovation, recruit an additional employee base, speed up marketing and sales efforts, and aid in the company’s expedition to achieve the Federal Risk and Authorization Management Program Authority to Operate.
• In July 2024, Google introduced passkeys to its advanced protection program with the aim of improving security for high-risk clients, including human rights workers and journalists. These passkeys are based on FIDO authentication, which provides a more secure and speedier option than traditional passwords, using biometric authentication, such as face scan or fingerprint.