The risk-based authentication market was valued at USD 2.22 billion in 2019 and is expected to reach USD 5.13 billion by 2025, at a CAGR of 15% over the forecast period 2020 - 2025. The increasing number of cyber attacks and data breaches have increased awareness regarding data security which is generating demand for highly secure and authentic solutions.
- As passwords are proving to be a riskier choice of authentication and cyber attacks, such as simple phishing schemes to sophisticated and targeted phishing attacks are also expected to rise, thereby making risk-based authentication technologies, such as multifactor authentication (that uses OTPs and smart cards with variable passwords), become the requirement of many end-user industries.
- Governments across the world are promoting the use of risk-based authentication. For instance, in the United States, the Defense Federal Acquisition Regulation Supplement (DFARS) in its directive outlined the mandatory use of multifactor authentication for all local and remote accounts associated with users who access controlled and unclassified information.
- However, the adoption of risk-based authentication has been so slow in the consumer and enterprise spaces because of the technical complexity and high cost of implementing risk-based authentication.
Scope of the Report
The risk-based authentication (RBA) is a non-static authentication system which takes into account the profile of the agent requesting access to the system to determine the risk profile associated with that transaction. RBA system evaluates their credentials when a person attempts to access an application, database or any other secure resource.
Key Market Trends
Banking and Financial Services Expected to hold the Major Share
- With this rise in online transaction and banking, the risk for fraud and potential exposure of personal information is ascending. Mobile and e-banking are being increasingly used as a daily use to transfer and perform the transaction, which opens doors to cyber criminals trying to compromise a user’s account to extract money.
- Therefore, to enhance consumer satisfaction and enable secure transactions, many of the banking and financial institutions are adopting frictionless authentication, such as biometrics, facilitated by better fraud detection that leverages the combination of advanced machine learning and customized rule sets.
- For instance, in Europe according to the European Statistics in 2018, around half (51%) of adult Europeans use internet banking. In the United Kingdom, online banking penetration increased from 52% in 2012 to 74% in 2018. So the increase in the demand for mobile banking in a different region is giving rise to the adoption of risk-based authentication platform in order to keep the customers away from the fradulant attack.
North America Region Expected to Hold Major Share
- North America is estimated to dominate the risk-based authentication market driven by the high-security spending and presence of large number of risk-based authentication vendor in the region.
- As the United States is the early adopter of cloud technologies and connected devices, it is more vulnerable to targeted cyber attacks. Additionally, Accenture has stated that there were over 130 large-scale, targeted breaches per year in the United States in 2017, and that number is growing by 27% per year.
- Moreover, in the United States, business is increasingly dependent on computer networks and electronic data to conduct their daily operations. Growing pools of personal and financial information are also transferred and stored online. In order to provide utmost security to the required data, the penetration of the risk-based authentication market is also increasing.
The risk-based authentication market is highly competitive and consists of several major players. In terms of market share, few of the major players currently dominate the market. However, with technological advancement and product innovation, mid-size to smaller companies are increasing their market presence by securing new contracts and by tapping new markets.
- April 2019 - Okta Inc. announced about Oktane19 in collaboration with ITProPortal, is new risk-based authentication that can deliver greater security, ease of use and automated detection and response to identity-based attacks by leveraging machine learning.
- March 2019 - Financial Software Systems, Inc. has launched FSS Secure3D, its new-generation adaptive authentication solution based on the EMVCo 3DS 2.0 protocol.
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