Businesses are challenged to balance advanced security technologies and traditional methods against growing cybersecurity risks and demands for improved digital experiences

NEW YORK, Jan. 30, 2024 /PRNewswire/ — In a new research report by Liminal, the leader in digital identity market intelligence, the customer authentication market is expected to expand from a total addressable market (TAM) of $18.0 billion in 2024 to a staggering $38.9 billion by 2028, at a compound annual growth rate (CAGR) of 16.6%. This significant growth underscores the need for advanced security technologies, driven by escalating cybersecurity threats and increasing demands for enhanced security and better digital experiences. However, the report reveals a complex picture: while 83% of businesses recognize the security risks associated with multi-factor authentication methods like one-time passcodes (OTPs), 74% still plan to continue using them for customer authentication.

Jennie Berry, President at Liminal, comments, “Our research indicates a critical juncture in customer authentication. Businesses are aware of the vulnerabilities inherent in traditional methods like OTPs yet find themselves balancing these risks with the ease and familiarity of such systems for their customers.”

According to Liminal, while 97% of businesses surveyed are ready to adopt passwordless authentication systems, a significant gap persists between this readiness and actual implementation, with less than a third expected to transition in the next two years. This indicates an awareness of passwordless systems’ benefits but reflects substantial inertia and hesitancy in deployment. Complicating the landscape, biometric authentication, the preferred choice for passwordless solutions, faces adoption challenges, while FIDO2 passkeys require increased consumer education.

“The path forward for customer authentication is a blend of embracing new, secure technologies and ease of use with traditional methods while understanding and addressing the needs for customer education,” adds Berry.

Liminal’s latest report, “The Market & Buyer’s Guide to Customer Authentication,” explores the market dynamics and strategic decisions facing businesses and further examines the gap between supply-side innovations and demand-side adoption in the rapidly evolving market landscape. A survey of technology buyers in financial services, healthcare, e-commerce and digital marketplaces, travel and tourism, and age-restricted experiences underscores the complex decisions businesses face in adopting new authentication technologies while managing existing traditional methods.

Key stats include:

• Biometric authentication is emerging as the leading choice for passwordless technology, with 48% of practitioners favoring it as their preferred option in the next two years.
• 81% of organizations use identity platforms for customer authentication, prompting practitioners to pursue more comprehensive solutions with authorization capabilities.
• 59% of practitioners are dissatisfied with their current authentication solutions, largely due to costly, complex, and insecure account recovery processes.
• 64% of organizations view adaptive authentication as the best way to balance security and user experience in customer authentication, a challenge common to nearly all.
• 69% of practitioners seek continuous authentication beyond account login, driven by advances in artificial intelligence across the digital identity lifecycle.

About Liminal

Liminal is a global market intelligence and strategic advisory firm specializing in digital identity, financial crime and compliance, and IT security technology solutions across industries while catering to the private equity and venture capital community. Founded in 2016, Liminal offers strategic and analytical services supporting executive decision-making at all product and business lifecycle stages. We advise some of the world’s most prominent business leaders, investors, and policymakers on building, acquiring, and investing in the next generation of solutions and technologies. We provide access to proprietary data and analysis, strategic frameworks, and integrated insights on the industry’s only market intelligence platform.

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Contacts:

Stacy Schulman
Liminal Media Relations
media@liminal.co
1 (602) 616-9818

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SOURCE Liminal Strategy, Inc.