Multi-Factor Authentication Market By Solution (Hardware, Software), By Type (Two-Factor, Other Types), By End-User Vertical (BFSI, Healthcare, IT & Telecom, Retail, Government, Other) and By Region (North America, Europe, Asia Pacific, Latin America, MEA) - Global Forecasts 2017 to 2027.

Multi-Factor Authentication Market Definition and Estimation:

A multi-factor authentication (MFA) is a method necessitating authentication factors that go beyond the traditional set of credentials, usually a username and password, to grant access to information. The benefit of using an MFA is that it enhances the security of a user or organization’s information. It requires users to provide additional verification information, classified into three main types – knowledge, possession, and inherence. Knowledge involves answers to security questions, passwords, and other things known to the individual only. Possession involves OTP generated by text, email, or apps, access badges, smart cards, and more that is available exclusively. Inherence consists of fingerprints, facial, voice, retina or iris recognition, behavioral analysis, etc. specific in nature.

The multi-factor authentication market size was USD 9.24 billion in 2019 and expected to reach USD 26.57 billion by 2027; this converts into a compound annual growth rate (CAGR) of 14.11% for the forecast period.

Multi-Factor Authentication Market Overview:

Security is the major challenge in the digital age. With the development of complex tools, technology alone cannot combat threats. In recent times, several organizations have gravitated towards a work from the home scenario that has mandated access to information via employees’ personal unsecured devices. The surge in cybercrimes and the transition to remote work has increased the need for ‘Zero Trust’ architecture that reduces both complexities and costs without compromising on security. As a result, the market for MFA solutions is predicted to witness steady growth in the years to come.

The Multi-Factor Authentication Market is Segmented to include:

By Solution Type:

• Hardware
• Software

By Authentication Type:

• Two-factor
• Other

By End-user Vertical:

• BFSI
• Healthcare
• IT and Telecom
• Retail
• Government
• Others

A hardware MFA has several challenges: they are comparatively expensive, easy to lose, have high administrative and maintenance charges and are vulnerable to theft. A software MFA, on the other hand, overcomes these challenges and offers similar levels of security if not better. Furthermore, these solutions can be automatically updated, thereby, improving security at minimal costs. All of these factors have made the software segment popular and thus, dominating the multi-factor authentication market in 2019. The segment captured more than 95% which is equivalent to over USD 8.5 billion. It is also projected to register a CAGR of around 19.5% from 2020 to 2027.

The two-factor authentication segment held around three-quarters of the market share that amounts to around USD 7 billion in revenue in 2019. Two-factor authentication, in the form of one-time passwords (OTP) and smart cards with PINs, is widely used among individuals to secure their e-mail accounts, electronic devices, ATM cards, etc. Most organizations also prefer a two-factor authentication owing to its simplicity and faster response time. Consequently, the segment is anticipated to witness an approximate 19% CAGR between 2020 and 2027.

The BFSI vertical is susceptible to a large number of security breaches since it deals with a huge amount of sensitive and private financial data. As a result, BFSIs were one of the early adopters of multi-factor authentication. Also, the industry is subjected to compliance with security regulations. It is, therefore, no doubt the segment accounted for more than 30% of the multi-factor authentication market in 2019. It garnered over USD 3 billion in revenue during the same period. Nevertheless, the IT & telecom segment is estimated to expand at a CAGR just under 20% during the forecast years.

Multi-Factor Authentication Market by Geography Overview:

Based on geography, the market is segmented as below:

• North America
• Europe
• APAC
• Latin America (LATAM)
• Middle East & Africa (MEA)

Rising incidences of cyberattacks triggered the development of multi-factor authentication. However, extensive network, enhanced network connectivity, high adoption of digital services, and the proliferation of smartphones across industry verticals have contributed to the expansion of the North America multi-factor authentication market. Advancements in technology owing to the heavy investments by major players headquartered in the region is further boosting the market.

Growing investments in cloud and IoT technologies, implementation of digitization, penetration of mobile devices, etc. are anticipated to expand the Asia – Pacific multi-factor authentication market at the highest CAGR between 2020 and 2027. An upsurge in emphasis on data privacy and security and government regulations will propel the market forward.

Multi-Factor Authentication Market Dynamics:

Driver:

Increased incidences of a security breach.

The use of single-factor authentication, in most cases a traditional password, is often simple to hack due to easy access and availability of advanced tools and technology. Most cyberattacks use ransomware to retrieve information on individuals or corporations resulting generally in either a financial loss or identity theft. As per a study by Verizon, compromised identity is the top reason for security breaches. The survey report published by the Identity Theft Resource Center stated that in 2019 alone the number of data breaches in the U.S. amounted to nearly 1500 with over 150 million sensitive records exposed. However, the use of multi-factor authentication enhanced system security. The study by Google showed by just adding a recovery mobile number to a Google account restricted over 60% of the targeted attacks. Therefore, the rising number of security breaches and the need to guard vital information is driving the multi-factor authentication market.

Restraint:

Complexities in implementing and using multi-factor authentication.

An authentication system is expected to be simple, easy to use, and must consume minimum time to grant access. Although the time required to handle a single query for a two-factor authentication system is minimal, in cases of three or more factors the average time required is higher. Also, the integration of advanced technology may provide better security but would involve multiple processes and therefore increase service/response time. Hence, implementation and cost complexities may act as a restraint for the market.

The market is studied by analyzing all the key market participants across the ecosystem. The key players include, but not limited to:

• Okta Inc.
• Microsoft Corporation
• Duo Security Inc. (Cisco Systems)
• Broadcom Inc.
• OneLogin Inc.
• ForgeRock Inc.
• SecureAuth Corporation
• Gemalto NV (Thales Group)
• Yubico AB
• HID Global Corporation (ASSA ABLOY AB)
• OneSpan Inc.
• Entrust Datacard Corporation
• RSA Security LLC.

Recent News and Developments in the Multi-Factor Authentication Market:

1. In March 2021, Thales integrated its Luna HSMs with Microsoft Double Key Encryption for Microsoft 365. This integration will permit customers to protect confidential information while maintaining control of their encryption keys in the cloud.
2. Micro Focus announced the launch of CyberResilient.com in November 2020. CyberResilient.com provides the 360 Cyber Resilience Assessment tool by which CISOs can assess their current security status and take necessary actions to guard their business.
3. OneSpan signed a partnership with ForgeRock in September 2020. The partnership is projected to integrate OneSpan’s technologies into the ForgeRock Identity platform to provide a single, open solution to simplify authentication, risk and fraud management.

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