The out of band authentication trade is estimated at USD 1.0 Billion in 2021. The market is expected to reach USD 1.2 Billion in 2022. According to the analysis, the global out of band authentication market is anticipated to secure USD 4.3 Billion in 2032, while flourishing at a 13.2% CAGR from 2022 to 2032.
Increasing adoption of advanced authentication technology in major industries like banking, retail, and healthcare helps in easy operations of automated out of band authentication resulting in the growth of the market through the forecasting period
| Attributes | Details |
|---|---|
| Out of band authentication Market CAGR (2022 to 2032) | 13.2% |
| Out of band authentication Market (2032) | USD 4.3 Billion |
| Out of band authentication Market Attraction | Increasing digitalization and advancement in technology and increasing cyber-attacks boosted the use of authentication services by government and enterprises is likely to drive the market in the forecast period. |
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Growing security and data privacy concerns to propel the growth of the market
Out of band authentication enable data security and data privacy, which is expected to be the most significant factor driving the market during the forecast period. Data privacy is the main concern in industries, such as financial services, payment cards, baking, insurance, and healthcare sectors. All these companies follow the data privacy and security requirement set by regulatory authorities. This results in increased demand for band authentication.
Also, the presence of stringent rules and regulations related to data privacy contributed to the growth of the out-of-band authentication market in the coming years. Also, developments in artificial intelligence (AI), the Internet of Things (IoT), and big data technologies are projected to boost the application of data privacy solutions among organizations.
Growing online transaction and compliance requirements boost the growth of the out-of-band authentication market
A growing number of online transactions and compliance requirements are one of the major driving factors of the out-of-band authentication market. The frequency of cyber-attack is high in online transactions thus to minimize the cyber-attack many organizations are adopting authentication methods such as phone-based authentication, software OTP tokens, hardware one-time passwords (OTP) tokens, and others to make secure online transactions. Moreover, hackers always target lucrative sectors, which have a huge online customer base.
For instance, in April 2019, Worldpay, Inc., a global payment technology provider, announced the launch of ‘FraudSight’, which is a new solution designed to prevent fraud and optimize approval rates, potentially boosting revenue across all channels. According to Worldpay, Inc., FraudSight can make transaction validity decisions for merchants of all sizes.
The increasing use of laptops, tablets, smartphones, and smart gadgets has increased the usability of various internet-based solutions and services across the world. For instance, as of April 2022, there were five billion internet users worldwide, which is 63% of the global population. Increasing use of cloud-based technology such as Artificial intelligence, big data, and blockchain in many enterprises impelled the growth of the market.
The growing trend of bring your own device (BYOD) in many industries allows their employees to utilize the benefits of greater flexibility, collaboration, and work-life balance for improving productivity due to this, there is a sudden hike in the number of businesses implementing enterprise mobility solutions that enable and encourage employees to work at anytime, anywhere, from a wide range of devices. This trend has raised security-related issues which are expected to drive the growth of the band authentication market.
With a major emphasis on the precision of out-of-band authentication, governments are augmenting capabilities by incorporating advanced systems such as information technology, cloud computing, AI, and cyber security among others. Innovative progression in authentication services to provide high security in financial institutions and different industries is a key factor driving market growth.
Adopting software solution that generates one-time passcodes (OTPs) and is sent using via email or SMS text message is expected to drive the out-of-band authentication market Also rising adoption of out-of-band authentication by small and medium-sized businesses is expected to provide numerous opportunities for out-of-band authentication market globally during the forecast period. Attributed to these promising trends, it is no surprise that demand for Out of band authentication systems is projected to rise significantly in forthcoming years.
High risks involved in out-of-band authentication with SMS and the high product association cost hampered the global out-of-band authentication market growth. The lack of out-of-band authentication AI experts is anticipated to act as a significant restraint to the market in the forecast period. Out-of-band authentication AI is at a nascent stage and is complex in nature.
Therefore, organizations demand expertise in managing out-of-band authentication solutions powered by AI. The technology offers various benefits, however, lack of awareness, inadequate funding, and poor investments are likely to hamper the market growth in the forecast period. Also, uncertain regulations are also projected to hinder the industry growth.
As per the analysis, by component, the solution segment is likely to expand at a CAGR of 12.4% during the forecast period. The solution segment is expected to flourish owing to the increasing demand for out-of-band authentication-based platforms across various spheres of enterprises to assure safe transaction models in their business units. On the other hand, the services segment is projected to witness significant demand in the coming time. The growth can be attributed to the growing demand for out-of-band authentication services like professional services and managed services is expected to boost the segment growth.
By organization size, the SME segment is projected to record a 12.4% CAGR in the forecast period. The segment is projected to garner a larger market share in the coming time. The growth of the segment can be attributed to the growing incidences of cyber-attacks on enterprises. SMEs serve many customers all over the world. On the other hand, the large enterprise segment is expected to record significant growth due to the growing investments in out-of-band authentication platforms by governments.
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According to the analysis, the global market is estimated to be dominated by North America. The USA is anticipated to garner the largest market share in the forecast period. It is estimated at USD 1.5 Billion, recording a CAGR of 13.1% during the forecast period. Also, the government in the USA is focused on deploying band authentication-based solutions in various spheres.
Increasing adoption of the use of information systems to support its basic and essential business functions in the region boost the growth of the market. North America accounts for the highest share during the forecast period due to the presence of many out-of-band authentication vendors. For instance, the Government of Canada uses an out-of-band token, a combination of a physical device (e.g., mobile phone, landline telephone), and a secret that is transmitted to the device by a verifier each time authentication is required.
Europe is likely to garner considerable market share with the UK contributing USD 179.2 Million, expanding at 12.3% CAGR. Sectors such as ITC, automotive, media, and entertainment, among others, are some of the most significant consumers. Also, rapid digitalization is expected to positively benefit the market in the region in the coming time. In addition, growing partnerships among players are expected to augment the market in the UK.
Asia Pacific is projected to be the most lucrative market in the assessment period. The region is witnessing rapid adoption of advanced technologies, which acts as a salient factor boosting the market in APAC.
Emerging nations such as China, Japan, and South Korea are recognized to be the most remunerative markets. As per the analysis, China, Japan, and South Korea are projected at USD 300.1 Million, USD 242.0 Million, and USD 151.0 Million respectively.
Also, the three countries are expected to flourish at a healthy CAGR with China expanding at 12.5%, Japan at 11.5%, and South Korea at 10.6% in the forecast period. The development of the region can be attributed to the increasing investments by governments.
Country-wise Forecast CAGRs for the Out of Band Authentication Market.
| Countries | Estimated CAGR |
|---|---|
| USA | 13.1% |
| UK | 12.3% |
| China | 12.5% |
| Japan | 11.5% |
| South Korea | 10.6% |
Key players in the global out-of-band authentication market include Gemalto, CA Technologies, Symantec, Ping Identity, and RSA Security among others. Market players are leveraging strategic collaborative initiatives to increase their market share and increase their profitability.
Recent developments among key players are:
The out of band authentication market is estimated at USD 1.0 Billion in 2021.
The global out of band authentication market is expected to value USD 4.3 Billion, recording a CAGR of 13.2% during the forecast period.
Growing adoption of advance authentication technology in major industries is projected to offer significant opportunities in the coming time.
Gemalto, CA Technologies, Symantec, Ping Identity, RSA Security among others are some of the established players in out of band authentication market.
High cost associated with implementation of out of band authentication services is anticipated to act as a significant restrain to the market in the forecast period.
The USA market is estimated to expand at a 13.1% growth rate during the forecast period.
| Estimated Size, 2024 | USD 1,779.9million |
|---|---|
| Projected Size, 2034 | USD 11,391.7million |
| Value-based CAGR (2024 to 2034) | 22.7% |
| Market Value (2022) | USD 49,618.39 Million |
|---|---|
| Market Anticipated Value (2032) | USD 1,72,958.44 Million |
| Market Projected CAGR (2022 to 2032) | 13.3% |
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Out of Band Authentication Market
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