The Global Decentralized Identity Market size is expected to reach $8.9 billion by 2028, rising at a market growth of 78.5% CAGR during the forecast period.
Data breaches and the unauthorized access of personal data have destroyed trust in the absence of an identity layer. A decentralized identification method based on distributed ledger technologies (DLT) is gaining traction, backed by businesses like IBM and Microsoft and standardized by W3C and the Decentralized Identity Foundation (DIF). The distributed ledger system that underpins it might be utilized to allow asset exchanges.
Numerous experts believe that password-based logins are insecure, and that multi-factor solutions add friction to online interactions, reducing user uptake and productivity. Providing reliable identification of a person's identity whereas complying to new data privacy rules and regulations is a costly and ineffective maze of security and customer experience challenges. Several businesses have discovered that two-factor authentication is a band-aid solution.
Passwords have long been regarded as insufficient by security experts, but blockchain technology is finally providing some feasible alternative authentication techniques that businesses may explore to keep their data safe. Using identification instruments to interact with the world is a part of daily existence, yet today's digital representations of identities are far from safe. But, the realm of self-sovereign identification today allows people to live a digital existence that is safer, simpler, and more intuitive.
Companies are working on decentralized identities that will comply with 'know your customer' and anti-money laundering requirements in general. Decentralized identifiers are, in that sense, the correct solution at the right time. Businesses address fundamental issues that the tech press has been covering for years.
Decentralized finance assets and cryptocurrencies, for example, are frequently referred to as servicing the unbanked or underbanked, or persons who have struggled with existing centralized banking systems and the upkeep of conventional check and savings accounts.
COVID-19 Impact Analysis
The digital ecosystem has become increasingly important around the world. COVID-19 has resulted in significant advancements in decentralised identity technologies. Many firms have started offering online services since the onset of COVID-19. As a result, online consumers' fears about their identity security have grown, which has created demand for various digital security of data as well as people in the market.
Decentralized identity is important for confirming user identities and securely storing them. Furthermore, enterprises all around the world have increased their efforts to implement decentralised identification systems. This is expected to increase overall demand for decentralised identity technology.
Market Growth Factors
Increasing cases of security breaches and frauds
As the globe continues its digitization journey, data being posted to the web is becoming increasingly vulnerable to dangers. Personal information about each customer is stored on hundreds of servers around the world, increasing the risk of identity theft.
According to the Federal Trade Commission (FTC), identity fraud incidents worldwide increased by around 45 percent in 2020, resulting in massive financial losses. The rise in cyberattacks is credited to technologies like machine learning (ML), which allows attackers to create several various variants of malicious code each day.
Rise in applications of blockchain identity solutions in banks
Blockchain identity management technology offers a lot of potential in sectors like banking, cybersecurity, and the Internet of Things. This technology has the potential to change the world by overcoming the myriad issues in traditional banking operations and ensuring that banking services are available at all times.
Low transaction fees and a shorter transaction time is expected to enhance the effectiveness and security of commercial transactions. The data is less likely to be hacked or changed without consent because blockchain technology is built on distributed ledger technology and the blocks are encrypted utilizing powerful encryption.
Market Restraining Factors
Changing regulatory status and an absence of a unified set of guidelines
Regulatory agencies have a difficult time keeping up with technological advancements. Regulatory agencies must assess what gaps exist in current legislation and how they may affect overall technological applications as technology advances. Within that decentralized identity market, regulatory uncertainty continues to be a source of concern.
The lack of rules and the related uncertainty are now one of the most serious obstacles to the widespread implementation of blockchain technology across industries. Financial companies from all across the world are collaborating to establish a number of standards for blockchain technology.
Identity Type Outlook
Based on Identity Type, the market is segmented into Non- biometrics and Biometrics. Biometrics segment garnered a significant revenue share in the decentralized identity market in 2021. Biometric identification is primarily combining with other kinds of data, data systems and communication technologies like metadata, smartphones and social media and since the main security features on smartphones and by expansion, social media accounts, online identity and profiles.
Vertical Outlook
Based on Vertical, the market is segmented into BFSI, Telecom & IT, Real Estate, Retail & Ecommerce, Government & Public Sector, Healthcare & Life Sciences, Media & Entertainment, Transport & Logistics, Travel & Hospitality, and Others. Retail & E-Commerce segment recorded a substantial revenue share in the decentralized identity market in 2021. Decentralized identity offers numerous advantages separate of the greater identity autonomy it delivers to customers. In addition, decentralized identity is expected to enable customers to engage in the same activities & transactions without really transferring data. Owing to this, the growth of the segment is expected to witness a surge over the forecast period.
Organization size Outlook
Based on Organization size, the market is segmented into Large Enterprises and SMEs. SMEs segment procured a significant revenue share in the decentralized identity market in 2021. It is owing to the various benefits offered by decentralized identity solutions to small enterprises. Since SMEs have limited budget, they are widely adopting solutions that are low in cost and offer more benefits to secure their data. In addition, rapid pace of technological advancement is expected to surge the growth of the segment over the forecast period.
End user Outlook
Based on End user, the market is segmented into Enterprises and Individual. Enterprises segment garnered the highest revenue share in the decentralized identity market in 2021. A decentralized identity framework helps companies the capability to maintain their own identities, without being affected by the issuer. In addition, enterprises are getting advantages of the decentralized identity in order to gather and store data in the place.
Competitive Landscape
The major strategies followed by the market participants are partnerships. Based on the Analysis presented in the Cardinal matrix; Microsoft Corporation are the forerunners in the Decentralized Identity Market. Companies such as Accenture PLC, Wipro Limited, Civic Technologies, Inc. are some of the key innovators in the Market.
