The passive authentication market is expected to grow at a compound annual growth rate of 23.14% over the forecast period, reaching a market size of US$3,291.932 million in 2029 from US$766.798 million in 2022.
Passive Authentication is an advanced form of authentication under which the user's identification is confirmed without the requirement of any additional specific actions for authentication. It is an advancement over the traditional password system. The primary factors driving the market growth are increasing cyber threats, cybercrime, and growing technology penetration globally. The validation of passive authentication systems has been limited to simple devices, potentially limiting the market.
A passive authentication system is a technologically advanced alternative to password protection systems. The problem with the latter system is that creating and then remembering a long, strong, and complex password for greater security can sometimes get in the way of work, especially in an emergency. On the contrary, short and simple passwords are weak and insecure due to their ease of cracking, making the overall password protection system inefficient.
Additional layers of authentication, such as a passcode or a one-time password, provide greater security but extend the operation time. In contrast, passive authentication is stronger and doesn't require additional security layers. Passive biometric authentication systems are expected to grow faster than password protection systems due to their increased security features.
Passive Authentication Market Driver:
The rise in cybercrime and associated crimes is a significant driver of the passive authentication market's expansion. In this digital era, most operations have turned to the online channel for better performance. Online channels have expanded the customer base in various industries, including grocery, clothing, and accessories shopping, banking, and financial services.
However, data has been transferred to online channels along with these businesses. Hackers and other criminals are monitoring sensitive customer information, hoping to make money from it. Hackers steal and utilize personal information, including name, phone number, bank account information, and more, for their gain.
The growing popularity of online banking and financial activities, which are vulnerable to fraud and theft, is expected to propel the BFSI sector to the forefront of the passive authentication market during the projected time. Bank of America reported a data breach affecting 57,000 customers and their personal information following a third-party vendor Infosys McCamish Systems hack in November 2023, which affected insurance process management services. Increasing cases of data breach, hacking, robbery, and theft are creating demand for secure authentication systems, driving the market for passive authentication.
The need for passive authentication solutions for safe company operations will increase dramatically as small and medium-sized businesses proliferate. The Cloud model of passive authentication will show a robust growth prospectus due to its rising adoption, especially in small and medium enterprises. As per Eurostat data, in 2023, 59% of medium-sized enterprises purchased cloud computing services, up from 53% in 2021, while small businesses' share increased by 37.9 percentage points to 41.7%.
Additionally, the passive authentication market offers authentication software and authentication services. Authentication software is expected to grow exponentially owing to the increasing installation of this software in BFSl sectors as well as other sectors like government and education.
Passive Authentication Market Geographical Outlook
The North American region is anticipated to dominate the passive authentication industry due to its state-of-the-art infrastructure and early technological adoption. Rising internet penetration, introduction of advanced products, and growing customer education will boost regional market growth.
For instance, in April 2022, P Pindrop Security, an American company that offers risk scoring for phone calls to detect fraud and authenticate callers, expanded its VeriCall® API platform to include new fraud-risk scoring based on the Pindrop Intelligence Network (PIN). The new embedded PIN™ Score enhanced VeriCall® Technology by providing passive authentication capabilities and actionable intelligence to detect high-risk callers. Pindrop's technology matched call scrutiny with caller risk profiles, allowing customers to provide secure, passive authentication to over 90% of callers.
Further, in September 2023, ID R&D, a company based in New York, introduced frictionless voice biometrics for ChatGPT, securing access by integrating with ChatGPT voice controls. The technology uses speaker verification and liveness detection to authenticate users' speech, convert it into text, and enter it as chat text in the ChatGPT mobile app.
Passive Authentication Market Key Development:
Passive Authentication Market Players and Products:
Market Segmentation:
The passive authentication market is segmented and analyzed as below: