A Double-Layer Assurance of Security Through Multi-Factor Authentication

A Double-Layer Assurance of Security Through Multi-Factor Authentication

By Knowledge Sourcing Intelligence Thought Articles

The multi-factor authentication market is projected to grow at a CAGR of 16.88% during the forecast period to reach US$34.497 billion by 2027, up from US$11.543 billion in 2020.

While signing into an online account the user has to go through a process of proving to the service that the user logging in is the true user of that account, this process is called authentication. Traditionally, the service provider used to perform the authentication technique only with the username and a password. However, it is not a very safe way to do it, since, the usernames and passwords are easy to discover. Henceforth, to aid these issues and to add more security to the user’s account many online services like social media platforms, banks, and shopping have added multi-factor authentication. A user is authenticated and given access to an application, web portal, or VPN through a variety of authentication mechanisms using multifactor authentication, which is an electronic authentication security solution. In order to prevent unauthorized personnel from accessing a target, such as computing equipment, network, physical location, or database, MFA seeks to create a layered defense. The multi-factor authentication market is segmented into type, application, and geographical regions.

The increasing demand for cloud computing, smartphones coupled with wider internet accessibility, and the growing security breaches are expected to drive the multi-factor authentication market.

The demand for cloud computing is witnessing a growing trend in the past few years, owing to its benefits such as flexibility, efficiency, control choices, and security features among others. Cloud computing delivers numerous computing services which include servers, storage, database, networking, software, analytics, and intelligence. Furthermore, cloud computing services reduce the burden of owning a computing infrastructure or data center for companies. Organizations have a simple option to get rent access to anything from applications to storage from a cloud service provider. These cloud computing services allow companies and organizations to cut their upfront cost and complexity of owning and maintaining their own IT infrastructure. However, with the rising shift of organizations toward cloud computing has given rise to security issues. The number of security breaches has grown exponentially. According to IBM’s cost of data breach report 2022, the global average total cost of a data breach accounts for US$4.35 million. The total share of breaches due to ransomware grew by 41% in 2021. Such an increasing number of cyber-attacks, security breaches, and the growing trend of cloud computing has consequently given rise to security-related concerns for the end users. Henceforth, the growing security concerns are expected to propel the multi-factor authentication market in the coming years.

Furthermore, the growing population of smartphone users and the diverse use of smartphones for banking, gaming, education, social media, and work among others are giving rise to the demand for secure, rapid, and easy authentication processes. The rising online transactions through online banking and the high adoption of fast payment methods are due to the growing penetration of smartphones. Moreover, the spurt in e-commerce and mandatory laws by the banks for secure transactions through strong authentication measures is expected to propel the multi-factor authentication market. Additionally, this rising use of mobile banking is expected to increase the demand for OTP authentication. Henceforth, to secure transactions through these electronic devices and protect consumers from any fraudulent attacks, multi-factor authentication is used. Also, the integration of these authentication systems by the banking, healthcare, and retail sectors are creating growth opportunities for the multi-factor authentication market during the anticipated period.

The strict compliances imposed by several governments from numerous countries are further driving the market despite the rising number of data breaches. Thus, the multifactor authentication market is expanding as a result of increasingly strict compliance requirements and numerous organizations’ initiatives to create and implement improved authentication solutions.

It is expected that the two-factor authentication model will witness significant growth during the forecast period.

Based on the model, the multi-factor authentication market can be segmented into two-factor authentication, three-factor authentication, four-factor authentication, and five-factor authentication. The two-factor segment is anticipated to experience a significant revenue increase over the projected period based on the authentication model. Two-factor authentication adds an extra layer of protection to the user’s account. Under this authentication model, a user is required to fill in the username and password details, and then the user is directed towards another requirement of fulfilling the information instead of getting direct access to the account. This second factor allows the second level of security in case the user’s password or username is compromised. Furthermore, the importance of two verification elements is increasing as more firms and industries, including those in banking, healthcare, and insurance, employ online transactions. The market's need for two-way authentication models is being driven by benefits including quicker transactions and shorter password reset and authentication times. High productivity, reduced management and help desk costs as a result of fewer customer inquiries, and other reasons are also anticipated to contribute to the two-factor authentication model segment's revenue growth over the projected period.

Based on Geography, the North American region is expected to hold a dominant share in the multi-factor authentication market during the forecast year.

Based on geography, the multi-factor authentication market is segmented into North America, South America, Europe, the Middle East and Africa (EMEA), and the Asia- Pacific. The analysts anticipate that the North American region will hold a significant share of the multi-factor authentication market during the forecast period. The prime factor driving the growth of this market in the North American region are stringent data security policies and widespread cloud deployments. For instance, the USA has a different mix of laws for data privacy like HIPAA (health insurance portability and accountability law), FERPA (family education rights and privacy act), and ECPA (Electronic Communications Privacy Act) among others. Furthermore, the high adoption of cloud-based applications in North America is giving rise to cyber-attacks in this region. For instance, in January 2021 over 30,000 US businesses were affected by the sweeping attack on Microsoft Exchange email servers. The hackers were able to gain unauthorized access to emails from small businesses to local governments. For another instance, Facebook, one of the world’s largest companies dealt with a security breach in April 2021. This massive data breach resulted in the leaking of names, phone numbers, account names, and passwords of over 530 million users. These instances are becoming more and more frequent in the past few years in this region. henceforth, data security has become a major concern in countries like US and Canada, which is expected to propel the market for multi-factor authentication during the stipulated period.