Digital Identity Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Identity Type (Biometric, Non- biometric), By Organization Size (Large Organization, SMEs), By Vertical (BFSI, Retail & eCommerce, Government & Defence, Healthcare, IT & ITeS, Telecommunications, Energy, Utilities), By Region, By Competition 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 59.14 Billion
CAGR (2026-2031)	23.29%
Fastest Growing Segment	Healthcare
Largest Market	North America
Market Size (2031)	USD 207.71 Billion

Market Overview

The Global Digital Identity Market will grow from USD 59.14 Billion in 2025 to USD 207.71 Billion by 2031 at a 23.29% CAGR. Digital identity solutions encompass the technological infrastructure and verification processes enabling the electronic authentication of individuals, devices, and entities to secure access across online platforms. The market is fundamentally driven by the escalating requirement to combat sophisticated fraud and the widespread digital transformation of public and corporate services aimed at enhancing operational efficiency. Additionally, the growing expectation for seamless customer onboarding experiences supports the broad adoption of these verification systems.

The urgency for robust identity frameworks is evidenced by the prevalence of security failures in the current landscape. According to the Identity Defined Security Alliance, in 2024, 90% of organizations experienced at least one identity-related incident in the past year. While this risk landscape catalyzes investment, the market confronts a substantial obstacle in navigating the fragmented and rigorous global data privacy regulatory environment, which complicates cross-border solution deployment and impedes rapid market expansion.

Key Market Drivers

Escalating Cybersecurity Threats and Identity Fraud Incidents serve as the primary catalyst for the Global Digital Identity Market, necessitating a fundamental shift in how organizations verify users. As threat actors increasingly utilize artificial intelligence to bypass traditional security measures, the reliance on static passwords has become a critical vulnerability. The sheer scale of this hostile landscape is immense; according to Microsoft, October 2024, in the 'Microsoft Digital Defense Report 2024', the tech giant blocked more than 600 million identity attacks every day targeting its customers. This sophisticated threat environment drives the transition toward biometric and multi-factor authentication architectures to ensure robust protection. The financial stakes provide further impetus for this technological investment, as security failures result in severe economic consequences. According to IBM, in 2024, the average cost of a data breach globally reached USD 4.88 million, underscoring the urgent requirement for resilient identity frameworks to mitigate financial and reputational risks.

Expansion of Government-Led National Digital Identity Programs is significantly reshaping the market by establishing authoritative trust anchors for digital interactions. Governments worldwide are moving beyond physical credentials, launching mobile-based identity wallets that allow citizens to access public and private services seamlessly. This structural evolution is evidenced by the dominance of public sector initiatives in the current ecosystem. According to Thales Group, June 2024, in the 'Digital identity adoption: the ecosystem underpinning it in 2024 and beyond' article, 70% of digital IDs currently in circulation have been issued by governments. This trend not only standardizes verification protocols across borders but also accelerates mass adoption by integrating identity solutions directly into essential daily activities, thereby creating a foundational layer for the broader digital economy.

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Key Market Challenges

The Global Digital Identity Market confronts a substantial obstacle in navigating the fragmented and rigorous global data privacy regulatory environment. As nations enforce distinct and frequently conflicting compliance standards, solution providers encounter significant friction when attempting to deploy international identity verification systems. This regulatory dissonance forces organizations to divert critical capital and technical resources toward navigating complex legal requirements rather than investing in product innovation or geographical expansion. The necessity to customize solutions for each jurisdiction creates high entry barriers and dramatically slows the broader adoption of digital identity frameworks.

The impact of these escalating regulatory pressures on market growth is underscored by the severe strain on organizational compliance resources. According to the International Association of Privacy Professionals, in 2024, only 26% of privacy professionals were confident that their organization's current funding was sufficient to meet the expanding scope of regulatory and governance obligations. This deficiency in resources directly hampers the market as companies are compelled to prioritize risk mitigation and legal adherence over the implementation and scaling of efficient digital identity infrastructures.

Key Market Trends

The Integration of AI-Powered Deepfake Detection Capabilities is accelerating as threat actors weaponize generative AI to create hyper-realistic synthetic identities. This trend compels solution providers to deploy advanced liveness detection algorithms capable of distinguishing between genuine users and AI-generated avatars by analyzing pixel-level anomalies. The urgency for such defensive technologies is driven by the explosive growth of synthetic fraud attacks that bypass traditional verification methods. According to Sumsub, November 2024, in the 'Identity Fraud Report 2024', the volume of deepfake-based identity fraud attempts increased four times globally compared to the previous year. Consequently, vendors are aggressively embedding deep learning models to secure remote onboarding workflows against these sophisticated threats.

The Rapid Adoption of Decentralized Self-Sovereign Identity Frameworks is restructuring the market by shifting data control from centralized repositories to user-governed digital wallets. This architectural evolution allows individuals to manage verifiable credentials independently, drastically reducing data privacy liabilities for enterprises by minimizing the redundant storage of sensitive personal information. This strategic pivot toward user-centric privacy models is rapidly permeating corporate security roadmaps as a viable method to enhance trust. According to Ping Identity, April 2024, in the 'Fighting The Next Major Digital Threat' report, the percentage of organizations implementing decentralized identity strategies to protect against fraud rose to 38% in 2024, a significant increase from 13% the previous year.

Segmental Insights

The Healthcare segment is emerging as the fastest-growing vertical in the Global Digital Identity Market, primarily driven by the comprehensive digitization of patient records and the global surge in telemedicine services. As medical providers transition to electronic health records, the necessity for precise patient authentication has become critical to combat the rising threat of medical identity theft. Furthermore, stringent compliance mandates from regulatory frameworks, such as the Health Insurance Portability and Accountability Act (HIPAA), are compelling organizations to implement rigorous verification measures. This dual pressure of digital transformation and regulatory adherence is significantly accelerating market adoption in this sector.

Regional Insights

North America maintains a leading position in the global digital identity market, driven by the early integration of cybersecurity technologies and a heightened focus on fraud prevention. The prevalence of identity theft has necessitated strict verification measures across banking and government sectors. Agencies such as the National Institute of Standards and Technology (NIST) support this growth by issuing comprehensive guidelines that standardize digital identity protocols. Additionally, the high concentration of key technology vendors in the United States facilitates the widespread deployment of advanced authentication solutions, reinforcing the region's market dominance.

Recent Developments

• In October 2024, Okta announced the launch of the Interoperability Profile for Secure Identity in the Enterprise (IPSIE), a new open standard developed to enhance security across the software-as-a-service landscape. This initiative seeks to eliminate identity silos by establishing a unified framework for secure authentication and lifecycle management across different applications. Additionally, the company introduced new capabilities specifically designed to secure generative AI applications, addressing unique challenges such as user authorization and data protection in AI-driven environments. These advancements demonstrate a concerted industry effort to standardize digital identity protocols and mitigate risks associated with emerging technologies.
• In September 2024, Mastercard agreed to acquire Recorded Future, a leading threat intelligence provider, in a deal valued at $2.65 billion to fortify its digital trust and identity services. This acquisition allows the payments technology company to integrate real-time threat intelligence and AI-driven analytics into its ecosystem, thereby enhancing its ability to detect and prevent identity fraud and cybercrimes. The move anticipates the need for holistic cyber defense mechanisms that protect digital identities throughout the transaction lifecycle. The integration is expected to provide financial institutions and merchants with greater visibility into emerging risks, reinforcing the security of the global digital economy.
• In June 2024, IDEMIA Public Security North America collaborated with the New York State Department of Motor Vehicles to launch the state's next-generation mobile ID application. This innovative digital identity solution enables residents to securely verify their identities via their smartphones at Transportation Security Administration checkpoints and other accepting businesses. Built upon the ISO 18013-5 standard for mobile driver's licenses, the app incorporates robust privacy features that allow users to control exactly what personal information they share. This launch marks a significant advancement in the deployment of interoperable digital credentials, facilitating contactless and secure identity verification for millions of users.
• In April 2024, Entrust announced the completion of its acquisition of Onfido, a prominent global provider of cloud-based, AI-powered identity verification technology. This strategic transaction enabled Entrust to significantly expand its portfolio by integrating advanced biometrics and document verification capabilities into its identity-centric security solutions. The combined offering is designed to help organizations combat increasingly sophisticated threats, such as deepfakes and synthetic identity fraud, while streamlining digital onboarding processes. By adding these specialized capabilities, the company aims to secure digital-first experiences for customers and citizens, ensuring compliance with global regulations and enhancing trust in digital interactions.

Key Market Players

• Microsoft Corporation
• IBM Corporation
• Oracle Corporation
• Okta, Inc.
• Ping Identity Corporation
• RSA Security LLC
• HID Global Corporation
• OneSpan Inc.
• Experian Information Solutions, Inc.
• BioCatch Ltd.

By Identity Type	By Organization Size	By Vertical	By Region
Biometric Non- biometric	Large Organization SMEs	BFSI Retail & eCommerce Government & Defence Healthcare IT & ITeS Telecommunications Energy Utilities	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

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

• Digital Identity Market, By Identity Type:

• Biometric
• Non- biometric

• Digital Identity Market, By Organization Size:

• Large Organization
• SMEs

• Digital Identity Market, By Vertical:

• BFSI
• Retail & eCommerce
• Government & Defence
• Healthcare
• IT & ITeS
• Telecommunications
• Energy
• Utilities

• Digital Identity 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