The Growth of the Multi-Factor Authentication Market in Today’s Technological Era
The multi-factor authentication market is projected to grow at a CAGR of 16.88% during the forecasted period to reach a market size of US$34.497 billion by 2027, from US$11.543 billion in 2020.
MFA (Multifactor Authentication) is a security technology of electronic authentication that verifies and grants access to an individual to an application, VPN, or web portal through multiple processes of an authentication mechanism. MFA aids in building a layered defence mechanism to put barriers against unauthorized personnel from gaining access to a target, like a computing device, physical location, network, or database. The key advantage of MFA is that it raises the security standard of the organization by requiring the users to identify themselves with more information than just a username and a password. As important and discrete as usernames and passwords are, they are also vulnerable to arbitrary force attacks, which can easily compromise security. Deploying the use of the MFA serves as a thumbprint or a physical hardware key that strengthens the organization’s confidence in its security. The growing adoption of cloud-based networking in core operations by numerous private and public organizations and the increasing threat of security breaches have aided in a growth in demand for MFA services in the market. The global Multi-Factor Authentication Market is segmented on the basis of applications, model types, and geographical regions.
Stringent compliances and initiatives by organizations to develop and deploy enhanced authentication solutions to aid in the growth of the market
The rising concerns regarding cyber security and the initiatives to seek better security solutions by various enterprises in order to restrict security breaches are one of the primary factors attributing to the soaring demand for the market. Amidst increasing data breaches, the strict compliances issued by various governments across the globe are further augmenting the market. The General Data Protection Regulation of Europe, the Lei Geral de Proteçao de Dados of Brazil, the Consumer Privacy Act of California, the Personal Data Protection Law of China, the Personal Data Protection Bill of India, and the Data Protection Regulation of Nigeria are a few prime examples of these regulations worldwide. Hefty fines that range as high as 5% of the entire global turnover are levied for non-compliance with these regulations. Hence, in such a case, in order to meet the increasing demand, the authentication solution providers also continuously produce new offerings and numerous strategic deployments to expand their brand presence and meet the demands of their clients. For instance, Tynec, an open communication provider, in February 2021, announced a strategic partnership with Averon, a security solution provider. With this partnership, the companies aimed to tackle the high amount of data breaches with their Direct Autonomous Authentication solution, which offers stringent security with a back-end and two-factor authentication without having the need for user actions or even SMS. Furthermore, in February 2022, the Hong Kong-based solution provider for authentication and fraud prevention, IPification, launched a service of one-click phone verification in the UK. Post the launch, the solution was made available to every bank, fintech, app developer, gaming enterprise, and other businesses. In accordance with the data that was recorded by the company, the app businesses that adopted IPification’s one-click verification service witnessed a decrease of 5-40% in the user registration drop-out rate on the business applications. Simultaneously, evolving technological advancements have also altered the way these authentication solutions work. BAXE’s novel Facial Authentication can be considered the best example of this. In February 2022, an Australia-based Fintech start-up, BAXE teamed up with a French technology solutions provider, IDEMIA, and Haventec, which is a Sydney-based start-up, in order to launch the first of its kind Decentralized Finance ecosystem that comprised of facial authentication. This offering aimed at aiding BAXE users in the authentication of large transactions, unlocking their locked accounts with the use of biometrics, and also recovering access to the accounts with forgotten credentials. The rising trend of digitization has made businesses implement secure, reliable, and efficient preventive solutions and is also transforming authentication solutions to a great degree. All such changes are anticipated to propel the market growth during the forecast period.
Factors posing a restraint toward market growth
Although MFA solutions help in strengthening the company’s security, they also have a few cons that follow and do not come risk-free. Firstly, setting up a multi-factor authentication system can be time-consuming and expensive. Further, as the amount of authentication factors increases, the time is taken for completing a single action also increases simultaneously. Additionally, actions like sim swapping and switching that are deployed by cybercriminals can conveniently provide them with access to the physical sim card and access IDs of the user. All these factors are thus predicted to cause a restraint toward market growth.
The COVID-19 pandemic had a positive impact on the MFA market, unlike the other industries. The mandate of social distancing measures, as well as lockdowns that were implemented by various governments, led to the closure of several companies in the dire situation. As a result, many organizations resorted to adopting a work-from-home model and digitizing all their operations through the integration of cloud-based platforms in order to provide remote access. Such a situation caught many companies unprepared which made them suffer from cyberattacks. Hence, this resulted in an increase in demand in the MFA market in order for companies to safeguard themselves thus augmenting growth.
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