Out of Band Authentication Market is expected to grow at a CAGR of 15.40% through 2030F
The
Global Out of Band Authentication Market is set to be led by the BFSI sector,
driven by strict compliance and rising cyber threats, during the forecast
period 2026-2030F
According to TechSci Research report, “Out of Band Authentication Market
- Global Industry Size, Share, Trends, Competition Forecast &
Opportunities, 2030F", The Global Out of Band Authentication Market was
valued at USD 2.24 Billion in 2024 and is expected to reach USD 5.29 Billion by
2030 with a CAGR of 15.40% through 2030.
Governments and regulatory agencies around the world
are enacting more stringent rules concerning user identity protection and
secure access. Regulations such as the European Union’s General Data Protection
Regulation and the United States’ Health Insurance Portability and
Accountability Act require organizations to demonstrate clear access controls
and secure user authentication practices. Out of Band Authentication meets
these requirements by creating an additional, auditable verification layer that
separates primary access from secondary approval. It ensures that even if a
primary system is compromised, unauthorized access can still be blocked through
a separate channel. After the Revised Payment Services Directive was enforced
in Europe, digital banks reported a 60% increase in deploying advanced
authentication mechanisms. Out of Band Authentication became a key solution to
meet compliance requirements, reduce fraud exposure, and provide auditable
access controls that satisfy both domestic regulations and international data
protection standards across the financial sector.
Companies that fail to comply with regulatory
requirements risk facing heavy fines, reputational damage, and loss of customer
trust. As a result, businesses across financial services, healthcare, and
critical infrastructure are moving quickly to modernize their authentication
processes. Out of Band Authentication not only helps organizations meet
compliance requirements but also prepares them for future regulatory updates.
It has become a cornerstone of compliance strategies, especially for
multinational firms that must navigate multiple overlapping regulatory
environments.
Risk-based authentication is gaining momentum within
Out of Band Authentication strategies. Instead of treating every login or
transaction equally, organizations are using real-time risk analytics to
determine when Out of Band Authentication is necessary. This allows businesses
to apply secondary authentication only when specific risk thresholds are
triggered—such as logging in from an unfamiliar device or location, making a
high-value transaction, or exhibiting unusual behavior patterns. This approach reduces
unnecessary friction for users while focusing resources on genuinely suspicious
activity.
The growing use of artificial intelligence and
machine learning is fueling this trend by enabling systems to process vast
amounts of behavioral, geographic, and transactional data in real time. These
insights help generate dynamic risk scores, allowing authentication platforms
to make informed decisions about when and how to engage Out of Band
Authentication. As a result, authentication becomes more adaptive, efficient,
and user-centric. This trend is particularly relevant in financial services,
e-commerce, and large-scale enterprise environments where customer expectations
for both security and seamless access are high. It represents a significant
move away from static rule-based authentication toward a more intelligent,
risk-sensitive framework.
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In
2024, the E-commerce segment emerged as the fastest-growing application in the
Global Out of Band Authentication Market, fueled by the exponential rise in
online transactions and the parallel increase in cyber fraud targeting digital
retailers. As consumers embraced digital shopping across mobile apps and web
platforms, the need for secure yet seamless authentication became critical.
E-commerce platforms, dealing with high volumes of sensitive customer data and
payment information, prioritized advanced authentication systems to prevent
account takeovers, fraudulent purchases, and identity theft. Out of Band
Authentication offered a practical solution—leveraging a separate channel like
SMS or mobile push notifications to validate user identity without disrupting
the user experience.
Retailers
implemented these systems particularly during checkout, password resets, and
high-value transactions, helping to reduce fraud risks while maintaining
transaction speed and customer trust. With mobile commerce dominating the
retail space, Out of Band Authentication methods that operate through
smartphones proved especially effective. Additionally, customer expectations
for data protection have grown; shoppers are increasingly choosing platforms
that demonstrate visible security measures. As digital commerce continues to
expand into new markets and technologies, the demand for Out of Band
Authentication in e-commerce is expected to remain strong, sustaining its rapid
growth trajectory.
In
2024, the Asia Pacific region emerged as the fastest-growing market in the
Global Out of Band Authentication Market, driven by rapid digital
transformation, expanding mobile user bases, and increasing cybersecurity
concerns. Countries such as China, India, Japan, and South Korea witnessed
significant adoption of digital banking, e-commerce, and government e-services,
prompting the need for stronger identity verification measures. Rising
incidents of data breaches and growing regulatory focus on data protection have
accelerated investments in multi-factor and Out of Band Authentication
solutions. Additionally, the surge in smartphone penetration and cloud adoption
has made mobile-based authentication methods more practical and scalable. These
factors collectively position Asia Pacific as a key growth hub in the global
authentication landscape moving forward.
Key
market players in the Out of Band Authentication Market are:
-
- Broadcom
Inc.
- Thales
S.A.
- RSA
Security LLC
- Entrust
Corporation
- Ping
Identity Holding Corp.
- Okta,
Inc.
- Micro
Focus International plc
- OneSpan
Inc.
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“The
Global Out of Band Authentication Market is poised for strong future growth
driven by rising cybersecurity threats, expanding digital transactions, and the
widespread adoption of mobile and cloud technologies. As organizations embrace
zero trust architectures and regulatory standards tighten, demand for robust,
multi-channel identity verification will surge. Advancements in artificial
intelligence, biometrics, and risk-based authentication will enhance efficiency
and user experience. Emerging economies with increasing digital infrastructure
and mobile penetration will further fuel adoption. Enterprises seeking to
balance security with seamless access will increasingly turn to Out of Band
Authentication, making it a cornerstone of next-generation identity and access
management strategies”, said Mr. Karan Chechi, Research Director of TechSci
Research, a research-based global management consulting firm.
“Out of Band
Authentication Market – Global Industry Size, Share, Trends, Opportunity, and
Forecast, Segmented By Authentication Method (SMS-Based OTP, Email-Based OTP,
Push Notifications, Physical Tokens, Biometrics), By Application (BFSI,
Healthcare, E-commerce, Government & Public Sector, Enterprise
Authentication), By Deployment Model (Cloud-Based, On-Premise, Hybrid), By
Region &Competition, 2020-2030F”, has evaluated the future growth
potential of Out of Band Authentication Market and provides statistics
& information on market size, structure, and future market growth. The
report intends to provide cutting-edge market intelligence and help decision
makers take sound investment decisions. Besides the report also identifies and
analyzes the emerging trends along with essential drivers, challenges, and
opportunities in Out of Band Authentication Market.
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