Decentralized Identity Market Size, Share & Trends Analysis Report By Identity Type (Biometric, Non-biometric), By End-user, By Enterprise Size, By Vertical, By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global decentralized identity market size was valued at USD 0.65 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 90.3% from 2023 to 2030. The growth of the market can be attributed to the increasing incidences of identity fraud across the globe. For instance, according to a report published by The Federal Trade Commission (FTC) in February 2022, identity fraud incidents increased by about 45% globally in 2020. Decentralized identity is considered one of the most secured identity solutions that can reduce such identity fraud, thereby driving the market over the forecast period.

The increasing adoption of applications based on blockchain identity worldwide is anticipated to foster industry growth over the forecast period. In addition, blockchain-based identity management offers enormous potential in industries such as banking, cybersecurity, and the Internet of Things (IoT). Furthermore, the data based on blockchain technologies are less prone to be attacked or hacked without consent. Additionally, the integration of blockchain technology in digital identity platforms helps banks in leveraging the Know Your Customer (KYC) information from interbank ledgers to avoid duplicate KYC. This reduces the cost involved in the KYC process for banking firms, thereby propelling the growth of the market.

Furthermore, the growing use of tactical initiatives by key market players such as Avast and SecureKey is expected to propel the industry demand globally. For instance, in April 2021, Nuggets, a payments platform and digital ID, formed a partnership with Accenture. This collaboration aims to improve and develop its business models and decentralized identity technologies. Such initiatives by firms are anticipated to drive the demand for digital identity, thus contributing to industry growth over the forecast period.

The growing demand for digitization is another factor anticipated to drive the market over the forecast period. Moreover, digitalization is becoming more prevalent in various industries, including healthcare, consumer goods, manufacturing, and retail. Such enterprises are more prone to cyber-attacks and identity theft. In addition, to cope with such attacks, identity management systems based on blockchain technology that aids in preventing intrusions, are becoming increasingly popular.

However, the lack of understanding of blockchain technology among developing nations is anticipated to restrain the industry growth over the forecast period. In addition, the lack of regulatory status of blockchain technology, along with the lack of standardization and interoperability, is expected to hinder industry growth. On the other hand, blockchain technology is being adopted by several innovators to build a network structure of IoT devices that would eliminate the requirement for a centralized location to manage device communication. Such applications of blockchain technology are anticipated to create new growth opportunities for the market in the near future.

COVID-19 Impact Analysis

The COVID-19 pandemic has played a crucial role in fueling industry growth. The COVID-19 pandemic boosted digitalization in almost all industries across the world. Due to the COVID-19 outbreak, decentralized identification technology has made significant advances in processing digital identity verifications. Due to increased concerns over identity thefts among online users, several companies have begun to integrate blockchain technology in digital identity platforms to remove middleware entities in order to enhance security and reduce identity fraud. This is further expected to fuel the growth of the market across the globe.

Identity Type Insights

The biometric segment dominated the market in 2022 and accounted for more than 64.0% share of the global revenue. The segment is expected to be driven by the growing demand from customers for secure onboarding, fraud prevention, and risk and compliance management. Furthermore, it is expected that decentralized identity systems might shift from non-biometric identities to biometric identities such as voice, hand, facial, and fingerprint recognition. Thus, the usage of biometric identity solutions is most likely to enhance security in identity verification compared to non-biometric identity solutions, thereby expected to propel the segment growth over the forecast period.

The non-biometric segment is anticipated to grow substantially over the forecast period. The growing demand for non-biometric identity among consumers owing to easy portability and convenience is expected to drive the segment. Moreover, non-biometric authentication is typically used as a backup for biometric password-less security. Such factors are anticipated to contribute to segment growth over the forecast period.

End-user Insights

The enterprises segment dominated the market in 2022 and accounted for more than 65.0% share of the global revenue. The growing concern to reduce business risk is a significant factor driving the segment. Moreover, a decentralized identity framework enables enterprises to control users’ identities independently of the identity issuer. Furthermore, a decentralized identity eliminates the initial need for organizations to gather and store personal data.

The individual segment is expected to register the fastest growth rate over the forecast period. The growth of the individual user segment can be attributed to the increasing adoption of decentralized identity solutions by individuals for creating and maintaining their identities. Furthermore, the decentralized identity solutions help individuals to verify and authenticate themselves in various identification processes for different use cases such as loan sanctioning, bank account opening, and other KYC processes. Thus, such wide use cases of decentralized identity to the individual users are further expected to drive the segment over the forecast period.

Enterprise Size Insights

The large enterprises segment dominated the market in 2022 with over 67.0% share. The demand for decentralized identity is rising among large enterprises as these enterprises are trying aggressively to avoid identity risk. For instance, in August 2022, Litentry, a multi-chain identity protocol, announced a partnership with Node Real, a blockchain infrastructure solution provider. Through the partnership, Litentry can incorporate NodeReal'sMegaNode, which offers powerful real-time and historical data indexing on the Ethereum and BinanceChain networks.

The small and medium enterprises segment is anticipated to register the fastest growth rate over the forecast period. Small enterprises typically try to digitalize their services and enhance the customer experience. Furthermore, the application of blockchain technology-based identity management can be widely adopted as a means of guaranteeing the protection of private information and improving accountability and trust between parties. In addition, small and medium enterprises (SMEs) benefit from increased product and service efficiency and quality, improved supply chain management, and blockchain-driven business model innovation.

Vertical Insights

The BFSI segment dominated the market in 2022 and accounted for over 19.0% share of the global revenue. Banks are required to conduct KYC checks to confirm customers' identities and ensure they are not involved in illegal activities, such as bribery or money laundering. In addition, the U.S. spends USD 25 billion on Anti Money Laundering (AML) compliances. Moreover, according to Forbes, in April 2019, major banks spend up to USD 500 million on cybersecurity each year.

The telecom and IT segment is anticipated to expand at a promising CAGR over the forecast period. The growing adoption of decentralized identifiers (DIDs) by telecom companies is one of the major factors driving the segment. Furthermore, telecom companies are involved in partnerships and collaborations to develop various blockchain-based digital identity applications. For instance, in June 2020, SK Telecom Co., Ltd., a South Korea-based wireless telecommunications operator, introduced a blockchain-based digital identity application called “Pass,” developed together with other telecom companies, including KT Corporation and LG Uplus Corporation. With this launch, the company enhanced its capabilities by enabling verification of user driving licenses to allow authentication for different services.

Regional Insights

North America dominated the market in 2022 and accounted for over 31.0% share of the global revenue. The growing preference to protect against identity thefts across North America is anticipated to propel regional growth over the forecast period. According to a Consumer News and Business Channel (CNBC) report in March 2021, nearly 42 million North American citizens were targets of identity fraud, costing consumers USD 52 billion. In addition, this report revealed that pandemic-related shifts to digital services have resulted in a 109 percent increase in new-account fraud and a 90 percent increase in account takeovers in the U.S. economy.

Asia Pacific is expected to expand at the highest CAGR over the forecast period. The regional growth can be attributed to the growing awareness regarding cybersecurity in nations such as India, China, and Japan. Aggressive efforts are being pursued by various organizations across Asia Pacific to safeguard consumer identity, which is also expected to contribute to regional growth. For instance, in April 2021, Affinidi, a Tamsek identity startup, and The Commons Project Foundation, a global nonprofit tech firm, formed a collaboration. The main aim of this collaboration was to integrate digital credentials for secure international travel.

Key Companies & Market Share Insights

The market is highly competitive due to the presence of several prominent players. As part of their efforts to improve their offerings, market firms pursue strategies such as new alliances and strategic agreements. For instance, in March 2021, Nuggets, a decentralized identity solution provider, formed a coalition with Collab Land, a cryptocurrency-based community management system. The collaboration aimed to create decentralized, configurable, and metaverse-ready digital IDs that would bring over-identification aspects such as reputation from separate web3 and metaverse online communities.

Furthermore, market players invest significantly in new product launches and product expansion activities to enhance their offerings. For instance, in June 2020, Civic Wallet, accessible on Google Play and the App Store, was released by Civic Technologies. This application offers a safer way to store and exchange digital currency and identity globally. Some prominent players in the global decentralized identity market include:

• Microsoft Corporation

• Accenture plc

• Wipro Limited

• SecureKey Technologies Inc.

• Persistent Systems Limited

• Avast Software s.r.o.

• Civic Technologies, Inc.

• R3

• Validated ID, SL

• Dragonchain

• Nuggets

• 1Kosmos Inc. 

Decentralized Identity Market Report Scope

Global Decentralized Identity Market Segmentation

The report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2019 to 2030. For the purpose of this study, Grand View Research has segmented the global decentralized identity market report based on identity type, end-user, enterprise size, vertical, and region:

• Identity Type Outlook (Revenue, USD Million, 2019 - 2030)

  • Biometric

  • Non-biometric

• End-user Outlook (Revenue, USD Million, 2019 - 2030)

  • Individual

  • Enterprises

• Enterprise Size Outlook (Revenue, USD Million, 2019 - 2030)

  • Large Enterprises

  • Small & Medium Enterprises

• Vertical Outlook (Revenue, USD Million, 2019 - 2030)

  • BFSI

  • Government

  • Healthcare & Life Sciences

  • Telecom & IT

  • Retail& E-commerce

  • Transport & Logistics

  • Real Estate

  • Media & Entertainment

  • Travel & Hospitality

  • Others

• Regional Outlook (Revenue, USD Million, 2019 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

    • France

    • Italy

    • Spain

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

    • Australia

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa