The global digital identity solutions market share is set for explosive growth with a CAGR of 21.2% during 2025–2031, it was valued at $41.63 billion in 2024 and with projections indicating a surge to $159.93 billion by 2031. This remarkable expansion is driven by growing adoption of advanced technologies.
NEW YORK, Feb. 12, 2025 /PRNewswire/ — According to a new comprehensive report from The Insight Partners, “Digital Identity Solutions Market Size and Forecast (2021 – 2031), Global and Regional Share, Trend, and Growth Opportunity Analysis Report Coverage: By Solutions, Authentication Type, Deployment Mode, Organization Size, and Geography”, the global digital identity solutions market is observing significant growth owing to the growing adoption of advanced technologies such as blockchain, artificial intelligence (AI), IoT, and others and increased regulatory requirements.
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The Digital Identity Solutions Market was valued at US$ 41.63 billion in 2024 and is projected to reach US$ 159.93 billion by 2031; it is expected to register a CAGR of 21.2% during 2025–2031.
The report runs an in-depth analysis of market trends, key players, and future opportunities. In general, the digital identity solutions market comprises of solutions, authentication type, deployment mode, organization size, and vertical which are expected to register strength during the coming years.
Market Overview and Growth Trajectory:
Growing Demand for Biometric Technology: In the rapidly changing field of digital identity verification, biometric technology emerges as a critical component for improving security, accuracy, and user experience. Biometrics, which leverages unique biological features, provides a technique of authenticating an individual’s identification that is both difficult to fake and simple to utilize. Biometric verification uses unique individual qualities like fingerprints, face patterns, and iris configurations to verify identities, increasing accuracy and security. Biometric verification improves the customer experience by simplifying the verification procedure. This user-friendly approach not only increases client happiness but also stimulates greater use of digital services. Thus, biometric technology not only improves the process of authenticating identities online, but it also solves the growing worries about identity fraud and theft in the digital world.
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Growing Demand for Decentralized Solutions:Decentralized identification is a sort of identity management that enables individuals to own and govern their own digital identities without relying on a single service provider. Decentralized identification technology is addressing many of the issues caused by centralized and federated identity management systems, such as widespread certificate fraud, sluggish and expensive verification processes, and data breach threats. Decentralized identity, with its ability to generate tamper-proof credentials, helps streamline procedures such as onboarding, compliance, and data verification, resolving many challenges for KYC providers, IAM systems, academic institutions, and enterprises that manage supply chains. As decentralized identity gains popularity, it promises to create a world in which individuals have more control over their data, corporations can immediately authenticate information, and trust in the digital ecosystem returns.
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Integration of AI: Artificial Intelligence (AI) technology examines data using powerful algorithms and machine learning techniques to quickly and reliably confirm the legitimacy of identification assertions. AI-powered identity verification lowers human error and speeds up the verification process, allowing enterprises to swiftly enroll new users while maintaining high security standards. For example, it has transformed Know-Your-Customer (KYC) procedures from time-consuming manual activities to simplified, dependable operations. Using biometrics, optical character recognition (OCR), and machine learning, AI can quickly validate legitimate documents, detect complex forgeries, eliminate identity impersonation attempts, and streamline user onboarding while ensuring security. Thus, AI has a substantial impact on digital identity security, offering opportunities for market growth.
Geographical Insights: North America dominated the Digital Identity Solutions Market share in 2024, and Asia Pacific is expected to record the highest CAGR during the forecast period.
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Digital Identity Solutions Market Segmentation, Applications, Geographical Insights:
Based on the solutions, the digital identity solutions market is segmented into biometrics and non-biometrics.
Based on authentication type, the digital identity solutions market is segmented into single-factor authentication and multi-factor authentication.
Based on deployment mode, the digital identity solutions market is segmented into cloud and on-premises.
Based on organization size, the digital identity solutions market is segmented into large enterprises and small and medium-sized enterprises (SMEs).
Based on vertical, the digital identity solutions market is segmented into BFSI, retail and e-commerce, government and defense, healthcare, information technology and telecom, energy and utility, and others.
Key Players and Competitive Landscape:
The Digital Identity Solutions Market is characterized by the presence of several major players, including:
Thales Group
ACI Worldwide
IDEMIA
ImageWare Systems, Inc.
Jumio
NEC Corporation
SAMSUNG SDS
Utimaco Management GmbH
Tessi International
Signicat
These companies are adopting strategies such as new product launches, joint ventures, and geographical expansion to maintain their competitive edge in the market.
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Digital Identity Solutions Market Recent Developments and Innovations:
Everyware unveiled its advanced Identity Verification Solutions suite designed to combat rising payments fraud and bolster customer confidence.
New York State has introduced a digital version of state-issued identification called the New York Mobile ID, with initial implementation taking place at bars in Rochester. The digital ID system, developed in partnership with IDEMIA, aims to provide a secure method of identity verification while enhancing protection against identity theft.
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Conclusion:
Digital identity has become an integral part of everyday life, influencing how to interact and navigate in today’s digital ecosystem, from signing into apps to obtaining critical healthcare to performing safe financial transactions. Governments and regulatory organizations throughout the world are recognizing the value of digital identification and establishing rules to oversee its usage. For example, the European Digital Identity Regulation (eIDAS 2.0) is a new legislative framework that specifies norms and standards for electronic identity and trust services in the European Union’s member countries. Furthermore, rules like the General Data Protection Regulation in Europe, the Australian Privacy Principles, and the California Consumer Privacy Act in the United States require strong data protection and privacy procedures. These regulations require enterprises to establish strong digital identity systems in order to comply with regulatory standards, protect user data, and avoid costly penalties. Compliance with these standards also involves the transparent and secure administration of digital identities, ensuring that users retain control over their personal information.
Furthermore, digital identity is predicted to evolve and adapt as future technologies such as artificial intelligence (AI), the internet of things (IoT), and decentralized identity have the potential to reshape digital identity by enabling new authentication and customisation options. For example, the Internet of Things ecosystem consists of billions of networked devices, each of which need safe and trustworthy authentication to allow seamless communication and data exchange. Digital identity offers a secure and scalable way to authenticate devices and users in IoT networks. Businesses may prevent illegal access and maintain data integrity by assigning a unique digital identity to each device. This is especially important in industries like healthcare, smart cities, and industrial automation, where safe and dependable device interactions are essential.
The report from The Insight Partners, therefore, provides several stakeholders—including solution providers, system integrators, and end-users —with valuable insights into how to successfully navigate this evolving market landscape and unlock new opportunities.
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