Digital Identity in Government Sector Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Offering (Solutions, Services), By Solution Type (Identity Verification, Authentication, Identity Lifecycle Management, Other), By Organization Size (Large Organization, SMEs), By Region & Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 3.93 Billion
CAGR (2026-2031)	17.74%
Fastest Growing Segment	Identity Lifecycle Management
Largest Market	North America
Market Size (2031)	USD 10.47 Billion

Market Overview

The Global Digital Identity in Government Sector Market will grow from USD 3.93 Billion in 2025 to USD 10.47 Billion by 2031 at a 17.74% CAGR. Digital Identity in the Government Sector encompasses the technological frameworks and electronic credentials used by public administrations to verify the identities of citizens for secure access to essential services. The market is primarily propelled by the critical need to mitigate identity fraud in welfare disbursements, the mandate to enhance national security protocols, and the drive to reduce administrative overhead through the digitization of public interactions. These fundamental drivers stimulate demand for robust verification solutions, ensuring efficiency and accuracy in state-citizen engagements.

However, widespread adoption is frequently impeded by significant concerns regarding data privacy and the complexities of securing centralized databases against sophisticated cyber threats. Ensuring public trust is essential, yet difficult to maintain amidst fears of surveillance and data misuse, which creates resistance to mandatory implementation. According to the 'World Bank', in '2024', 'identification systems in more than 90 percent of countries globally relied on digital data', illustrating the vast scale of infrastructure that governments must protect to ensure sustained market expansion.

Key Market Drivers

Accelerated Digitalization of Public Services and E-Governance Initiatives serves as a primary engine for market growth, as administrations globally transition from paper-based bureaucracies to streamlined digital ecosystems. This shift necessitates secure, interoperable identity frameworks to facilitate remote access to healthcare, taxation, and legal documentation. Governments are aggressively funding these infrastructures to enhance operational capabilities and ensure universal coverage. For instance, according to the Australian Government, May 2024, in the 'Budget 2024–25', the administration allocated 'AUD 288.1 million' to support the legislative implementation and broader rollout of the national Digital ID system. Such investments underscore the strategic priority placed on creating unified digital platforms that reduce administrative friction. This massive scale of enrollment is evident in developing nations as well; according to the Philippine News Agency, August 2024, the Philippine Statistics Authority successfully registered over '89 million' citizens into the PhilSys national identification system, highlighting the rapid expansion of government-led biometric databases.

Concurrently, the Escalating Incidence of Identity Fraud and Cybersecurity Threats compels the public sector to adopt institutional-grade verification technologies. As services move online, bad actors increasingly utilize synthetic identities and generative AI to bypass traditional security measures, forcing agencies to implement liveness detection and multi-factor authentication. According to Onfido, January 2024, in the 'Identity Fraud Report 2024', the prevalence of deepfakes used in identity attacks increased by '3,000%' year-over-year. This exponential rise in sophisticated attack vectors drives the procurement of advanced biometric solutions, as legacy alphanumeric passwords prove insufficient for protecting sensitive citizen data. Consequently, the market is shaped by a defensive necessity to fortify entry points against an evolving threat landscape while maintaining user accessibility.

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Key Market Challenges

Concerns regarding data privacy and the security of centralized databases serve as a primary restraint on the Global Digital Identity in Government Sector Market. As public administrations aggregate sensitive personal information, the potential for unauthorized access creates significant resistance among citizens. This apprehension regarding surveillance and potential data misuse directly lowers adoption rates, forcing agencies to extend project timelines and slowing the overall momentum of market expansion. When citizens lack confidence in the safety of their credentials, the deployment of verification systems faces immediate administrative and social hurdles.

The frequency of security incidents further validates these fears and creates hesitation in allocating funds for digital infrastructure. When identity systems are perceived as vulnerable, stakeholders become reluctant to support wide-scale integration. According to the 'Identity Defined Security Alliance', in '2024', '90 percent of organizations reported experiencing an identity-related breach in the past year', highlighting the volatility of the current security environment. This high incidence of compromise indicates that maintaining the integrity of digital credentials remains a substantial operational hurdle, directly reducing the speed at which governments can deploy these verification frameworks.

Key Market Trends

The Acceleration of Mobile Driver’s License (mDL) Rollouts represents a structural shift in how citizens carry and present credentials, moving beyond static physical cards to cryptographically secure mobile applications. This trend allows users to leverage selective disclosure mechanisms, such as proving age without revealing a home address, thereby aligning privacy demands with technical compliance under ISO/IEC 18013-5 standards. Public sector agencies are aggressively dismantling legacy issuance models to support these interoperable platforms that function across state lines. According to the Secure Technology Alliance, December 2024, in the 'Winter Market Snapshot', nearly 70 percent of U.S. states are anticipated to adopt mobile driver's licenses in the next two years, reflecting the rapid pace at which governments are transitioning toward smartphone-based identity ecosystems.

Concurrently, the Integration of Digital Travel Credentials (DTC) at Borders is revolutionizing international mobility by replacing manual passport checks with seamless biometric corridors. This trend focuses on creating contactless entry points where facial or iris recognition links a traveler’s live biometric data directly to their government-issued digital profile, significantly reducing congestion at immigration checkpoints. Air transport hubs serve as the primary testing grounds for these frameworks, requiring deep technical integration between commercial airline systems and national border control agencies. According to the International Air Transport Association, November 2024, in the '2024 Global Passenger Survey', 46 percent of travelers have already utilized biometric identification for airport processes, indicating a robust acceptance of these automated verification channels as the new standard for global transit security.

Segmental Insights

Identity Lifecycle Management has emerged as the fastest-growing segment in the Global Digital Identity in Government Sector Market, driven by the critical necessity to secure user access throughout the entire employment tenure. Government agencies are increasingly prioritizing these solutions to automate the complex onboarding and offboarding of personnel, thereby reducing administrative overhead and eliminating security gaps. This growth is further accelerated by the mandate to comply with stringent data protection standards from regulatory bodies like the National Institute of Standards and Technology. By enforcing rigorous governance, these systems ensure that only authorized individuals retain access to sensitive public sector data.

Regional Insights

North America maintains a leading position in the Global Digital Identity in Government Sector Market, driven by established technological infrastructure and proactive fraud prevention measures. The dominance of this region is supported by comprehensive regulatory standards from organizations such as the National Institute of Standards and Technology, which provide essential guidelines for secure identity verification. Additionally, federal and state initiatives focused on modernizing public service delivery and enhancing cybersecurity encourage the widespread implementation of digital identity solutions. This environment fosters a stable and expanding market for government-led identity management.

Recent Developments

• In April 2025, IDEMIA Public Security signed a strategic Memorandum of Understanding with the Technology Control Company (TCC) to drive innovation in digital identity and biometrics within Saudi Arabia. The partnership was established to develop and deploy advanced solutions for the travel, transport, and smart city sectors, aligning with the region's Vision 2030 goals for digital transformation. By combining their respective expertise, the companies aimed to enhance security and operational efficiency for government and public sector projects across the Gulf Cooperation Council region, focusing on delivering seamless and secure identity management experiences.
• In December 2024, HID Global and its partner, FMC Research Solutions Inc., highlighted the success of their collaboration with the Philippine government, which resulted in the Philippines’ mobile national ID receiving the Best New Digital ID Card 2024 Award. The recognition acknowledged the development of the first ISO-compliant digital government platform in Asia, known as eGovPH, which integrated the company's goID software development kit to ensure interoperability. The solution provided citizens with a secure method to store government-issued IDs on their mobile devices and access various services, demonstrating the company's role in advancing digital identity infrastructure in the government sector.
• In September 2024, Thales secured a contract with the Alaska Division of Motor Vehicles (DMV) to continue producing driver's licenses and identification cards for the state. Under this agreement, the company committed to supplying approximately 225,000 physical credentials annually, utilizing advanced translucent polycarbonate technology to enhance security and durability. The collaboration involved the deployment of the Cogent Multi Biometric System to verify data during citizen enrollment, aiming to prevent identity fraud and theft. This contract renewal marked the continuation of a long-term partnership intended to safeguard the identities of Alaska residents through secure and sophisticated document solutions.
• In June 2024, Entrust announced the launch of its Citizen Identity Orchestration solution, a new offering designed to assist governments in streamlining the delivery of public services through secure digital identities. The solution was developed to embed trust in citizen interactions, such as border crossings, benefit delivery, and tax filing, by utilizing a composable architecture that integrates with existing government infrastructures. The company stated that this modular platform would allow public sector agencies to adopt identity-centric security measures and improve user experiences with intuitive mobile and web interfaces, thereby addressing the increasing demand for seamless digital government services.

Key Market Players

• IBM Corporation
• Microsoft Corporation
• Oracle Corporation
• SAP SE
• Deloitte Touche Tohmatsu Limited
• Accenture plc
• Hewlett Packard Enterprise Company
• Intel Corporation
• NEC Corporation
• Fujitsu Limited
• Okta, Inc.
• ForgeRock, Inc.

By Offering	By Solution Type	By Organization Size	By Region
Solutions Services	Identity Verification Authentication Identity Lifecycle Management Other	Large Organization SMEs	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Digital Identity in Government Sector Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Digital Identity in Government Sector Market, By Offering:

• Solutions
• Services

• Digital Identity in Government Sector Market, By Solution Type:

• Identity Verification
• Authentication
• Identity Lifecycle Management
• Other

• Digital Identity in Government Sector Market, By Organization Size:

• Large Organization
• SMEs

• Digital Identity in Government Sector Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE