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The multi-factor authentication market size is forecast to increase by USD 38.97 billion, at a CAGR of 28.83% between 2023 and 2028. Market growth hinges on several factors, including the surge in online transactions, the robust security offered by hardware OTP tokens, and the strict adherence to regulatory compliance. These elements drive the adoption of OTP tokens, especially in industries where data security is paramount. Additionally, the increasing sophistication of cyber threats underscores the importance of secure authentication methods, further boosting the market. Moreover, the rising awareness of regulatory requirements for secure transactions fosters market growth as organizations seek compliant solutions to protect sensitive data. It also includes an in-depth analysis of market trends and analysis, market growth analysis and challenges. Furthermore, the report includes historic market data from 2018 - 2022.
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The market is witnessing significant growth due to increasing cyber threats and the need for enhanced data protection. Organizations are adopting cloud-based MFA solutions to secure their business environments and IoT environment. This market addresses challenges such as lack of awareness and the vulnerability of password-based authentication. By implementing MFA, businesses can improve their security posture and ensure data integrity. With the rise of smart thermostats, industrial sensors, and other interconnected devices, the MFA market has substantial market potential to drive customer trust and protect against cybersecurity threats like APTs and zero-day threats.
The innovative features and user interfaces are notably driving the market growth. Consumers depend on the Internet to perform transactions. Online transactions are instant and easy. However, financial transactions are vulnerable to cyberattacks. The frequency of cyberattacks is increasing on websites where a large number of online transactions take place. Hackers aim at sectors having a huge online customer base. Many organizations have started employing authentication methods, such as phone-based authentication, software OTP tokens, hardware OTP tokens, and e-mail, to make online transactions more secure.
Additionally, e-commerce sales in the US grew by 32.4% in 2020 in comparison to 2019. E-commerce still represents a small portion of retail purchases in the US. Therefore, ample opportunities exist in the US e-commerce market. Mobile operators are providing high-speed mobile broadband services that have enabled users to use bandwidth-intensive business applications. High-speed Internet services are necessary to avail of cloud-computing services, which are in high demand among enterprises. The availability of 3G and 4G networks will further boost online transactions, leading to the increased adoption of multi-factor authentication solutions and services during the forecast period.
The emergence of cloud-based multi-factor authentication is the primary trend driving the market growth. The rise in maintenance costs for hardware and software-based two-factor and three-factor authentication models has attracted the interest of many companies in adopting cloud-based multi-factor authentication solutions and services. The adoption of the cloud is rapidly increasing among industries, giving rise to many security challenges for cloud service providers and other ecosystem vendors, especially in dealing with complex regulations for privacy and data protection.
Moreover, to guarantee the security and safety of data on the cloud, cloud service providers are adopting technologies such as tokenization, biometric authentication, and others by implementing various models of multi-factor authentication, which can provide authentication for the safety of data stored on the cloud. The demand for multi-factor authentication for securing the data and information in the cloud environment is likely to provide huge opportunities to multi-factor authentication solution providers and cloud service providers, which will drive the growth of the market during the forecast period.
The increase in the cost of OTP tokens may impede market growth. High initial deployment and replacement costs have increased the total cost of OTP tokens. The total cost of OTP tokens includes the initial pricing and licensing fees, infrastructure and hardware requirements, token warranty, and efforts and resources required for deploying and managing the solution. This is because regions such as South America and Eastern Europe have limited vendor penetration.
Further, companies that operate in these regions are players based in the US and Europe, such as Entrust, RSA Security, and VASCO. A small number of companies control the market, and the lack of stiff competition is resulting in high initial deployment and replacement costs. Thus, the increasing cost of OTP tokens will hamper the growth of the market in focus during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.
Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Thales Group - The key offerings of the company include multi-factor authentication, namely SafeNet Trusted Access.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market share growth by the services segment will be significant during the forecast period. These market solutions and services are gaining prominence in organizations to prevent people from gaining unauthorized access to critical data and tampering with critical information. People are granted access after their identity is confirmed with the information stored in the database. The major factors expected to drive the market are the increased number of data breaches and cyber-attacks and the growing adoption of BYOD among enterprises.
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The services segment showed a gradual increase in market share, from USD 4.01 billion in 2018. Increasing online transactions and e-commerce and the digitalization of financial and welfare services are the key drivers for the high adoption rate of multi-factor authentication solutions and services during the forecast period.
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North America is estimated to contribute 32% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. North America is more technologically developed than other regions, and therefore, the adoption of multi-factor authentication is high in the region. The increase in regulatory requirements for large banks and Payment Card Industry (PCI) companies is the major factor driving the adoption in the region.
In addition, advances in authentication solutions, such as phone-based authentication and SMS tokens, and OPT tokens integrated with biometric authentication, have boosted the market growth in the US. There are also stringent government regulations in the region that compel enterprises to incorporate multi-factor authentication into their credential authentication paradigm. Government spending is on the rise, driven by the need to safeguard confidential data from external threats. The US government is one of the key adopters of advanced solutions. Such factors drive the regional market expansion during the forecast period.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
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The market is crucial in enhancing security measures across various IT environments, addressing threats such as malware, phishing, spoofing, and ransomware. Mandated by regulatory compliances like the Federal Trade Commission (FTC) Safeguards Rule, MFA employs higher-order authentication models beyond simple passwords or authorized device. It integrates biometric data, hardware and software tokens, and physical authenticators to fortify cloud security and on-premises data. Chief information security officers prioritize authentication-as-a-service solutions from companies like Symantec Corporation, driven by R&D investments to combat APT and other advanced persistent threats. As enterprise mobility and cloud technologies expand, so does the need for robust data security standards and implementation complexities management. Industries like financial data, utilities, and manufacturing increasingly adopt MFA to safeguard customer accounts, prevent payment fraud, and mitigate identity theft across heterogeneous IT environments.
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Market Scope |
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Report Coverage |
Details |
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Page number |
172 |
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Base year |
2023 |
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Historic period |
2018 - 2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 28.83% |
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Market growth 2024-2028 |
USD 38.97 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
22.45 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 32% |
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Key countries |
US, China, Germany, UK, and Japan |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Beyond Identity Inc., Broadcom Inc., Duo Security Inc., Entrust Corp., FEITIAN Technologies Co. Ltd., Frontegg, Fujitsu Ltd., FusionAuth, Giesecke Devrient GmbH, HID Global Corp., Microsoft Corp., NEC Corp., Okta Inc., OneSpan Inc., Quest Software Inc., RSA Security LLC, SecureAuth Corp., Thales Group, TransUnion, and Yubico AB |
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Market dynamics |
Parent market analysis, Market forecast, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
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Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Component
7 Market Segmentation by Deployment
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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