Digital Identity in BFSI Market is expected to Grow with a CAGR of 15.61% through 2029

Rise in need for enhanced security & fraud prevention, regulatory compliance, and improved customer experience, fostering trust and efficiency in financial transactions are expected to drive the market in the forecast period.

According to TechSci Research report, “Digital Identity in BFSI Market – Global Industry Size, Share, Trends, Competition Forecast & Opportunities, 2029F”, Global Digital Identity in BFSI Market was valued at USD 30.25 billion in 2023 and is expected to reach USD 72.88 billion by 2029 with a CAGR of 15.61% during the forecast period. The emergence and growth of Identity-as-a-Service (IDaaS) solutions represent a significant trend in the digital identity in BFSI market, driven by the need for scalable, cost-effective, and flexible identity management solutions. IDaaS providers offer cloud-based platforms that deliver a range of identity and access management (IAM) services, including single sign-on (SSO), multi-factor authentication (MFA), and identity governance. These solutions enable financial institutions to streamline their identity management processes, reduce IT overhead, and enhance security without the need for extensive on-premises infrastructure. The shift towards IDaaS is fueled by the increasing adoption of cloud computing and the demand for more agile and responsive IT environments. As BFSI organizations seek to adapt to evolving regulatory requirements, improve operational efficiency, and enhance customer experiences, IDaaS platforms offer a compelling solution by providing centralized management and real-time visibility into user identities and access rights. Additionally, the ability to scale services up or down based on demand and integrate seamlessly with other cloud-based applications further contributes to the appeal of IDaaS. As the market continues to grow, the adoption of IDaaS is expected to accelerate, driven by the ongoing digital transformation and the need for secure, efficient, and adaptable identity management solutions in the BFSI sector.

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Based on the Identity Type, the Biometrics segment held the largest Market share in 2023. This prominence is largely attributed to the increasing reliance on biometric technologies for enhancing security and streamlining authentication processes within the financial sector. Biometrics, which includes fingerprint recognition, facial recognition, and iris scanning, offers a robust solution for verifying identities, reducing fraud, and ensuring compliance with stringent regulatory requirements. The growing adoption of biometric solutions is driven by their superior accuracy and user convenience compared to traditional authentication methods such as passwords and PINs. As financial institutions seek to enhance customer experience and mitigate security risks, biometrics provide a seamless and reliable means of access control. This technology not only bolsters security by ensuring that only authorized individuals can access sensitive information but also simplifies the user experience by reducing the need for multiple authentication steps. The continuous advancements in biometric technology, such as the integration of AI and machine learning, have further fueled its dominance in the market. These innovations enhance the precision and efficiency of biometric systems, making them increasingly attractive to financial institutions. As the industry continues to evolve and the demand for secure, user-friendly digital identity solutions grows, the Biometrics segment is expected to maintain its leading position in the Global Digital Identity in BFSI Market.

In terms of region, Europe is the fastest growing region in the Global Digital Identity in BFSI Market,  driven by a confluence of regulatory advancements, technological innovation, and a heightened focus on security and compliance. The European Union's stringent regulations, such as the General Data Protection Regulation (GDPR) and the Digital Identity Act, have significantly accelerated the adoption of digital identity solutions. These regulations mandate robust data protection and privacy measures, prompting financial institutions across Europe to invest in advanced digital identity technologies to ensure compliance and safeguard customer information. The increasing digitalization of financial services in Europe has also contributed to the rapid growth of the digital identity market. With the rise of online banking, fintech solutions, and digital transactions, European financial institutions are increasingly leveraging digital identity solutions to enhance security, streamline user verification processes, and improve customer experiences. The adoption of cutting-edge technologies such as biometrics, artificial intelligence, and blockchain within the region is driving innovation and efficiency, enabling institutions to meet the evolving demands of the digital economy.

Europe's strong emphasis on financial inclusion and accessibility is fueling the expansion of digital identity solutions. Initiatives aimed at providing secure and convenient access to banking services for diverse populations, including those in remote or underserved areas, are further boosting the market's growth. As European countries continue to advance their digital infrastructure and embrace new technologies, the region's leadership in the digital identity space is set to strengthen, positioning Europe as a key player in shaping the future of digital identity in the BFSI sector.

Major companies operating in the Global Digital Identity in BFSI Market are:

• Thales Group
• IDEMIA Group
• HID Global Corporation
• Jumio Corporation
• Entrust Corporation
• Cisco Systems, Inc.
• VeriFone, Inc.
• Microsoft Corporation
• IBM Corporation
• Okta, Inc.

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“The Global Digital Identity in BFSI Market is expected to rise in the upcoming years and register a significant CAGR during the forecast period. The digital identity market in the BFSI sector presents robust opportunities driven by the need for enhanced security and streamlined customer experiences. With rising cyber threats and stringent regulatory requirements, financial institutions are investing in advanced digital identity solutions to prevent fraud and ensure compliance. The growing demand for seamless, multi-channel access and the shift towards digital banking further drive market growth. As financial services continue to digitize, there is substantial potential for digital identity solutions to offer security and efficiency enhancements. Therefore, the Market of Digital Identity in BFSI is expected to boost in the upcoming years”, said Mr. Karan Chechi, Research Director of TechSci Research, a research-based global management consulting firm.

“Digital Identity in BFSI Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented, By Offering (Solutions and Services), By Deployment (Cloud and On-Premises), By Identity Type (Biometric and Non-biometric), By Organization Size (Large Organizations and SMEs), By Region & Competition, 2019-2029F”, has evaluated the future growth potential of Global Digital Identity in BFSI Market and provides statistics & information on the Market size, structure, and future Market growth. The report intends to provide cutting-edge Market intelligence and help decision-makers make sound investment decisions., The report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in the Global Digital Identity in BFSI Market.

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