Multi-factor Authentication Market by Component, Deployment and Geography - Forecast and Analysis 2023-2027

Multi-factor Authentication Market Forecast 2023-2027 

The multi-factor authentication market is estimated to grow by USD 20.80 billion at a CAGR of 21.41% between 2022 and 2027. 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 drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021. 

What will the Size of the Market be During the Forecast Period?

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Market Segmentation

This report extensively covers market segmentation by component (services and products), deployment (on-premises and cloud), and geography (APAC, North America, Europe, Middle East and Africa, and South America).

By Component

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 3.42 billion in 2017, and continued to grow by 2021. 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. Our report provides a brief analysis of historical and forecast market share and their segment, along with their reasons for growth from 2017 to 2027.

The growth of this segment is primarily attributed to the increasing adoption of the market by residential consumers, which is driven by changing lifestyles and a growing preference for comfort.

By Region

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North America is projected to contribute 35% by 2027. Our 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.

Market Dynamics and Customer Landscape

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 devices. 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. Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market.  

Key Market Driver

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.

There has been a significant increase in the number of online services provided by companies, leading to a surge in online transactions. This trend is driven by factors such as authentication models, the IoT environment, cyber threats, business environments, IoT devices, and the collection of biometric data.  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.

Significant Market Trend

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.

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.

Major Market Challenge

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.

Vendors that operate in these regions are players based in US and Europe, such as Entrust, RSA Security, and VASCO. A small number of vendors controls 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.

Key Market Customer Landscape

Our analysis of the life cycle of the market from the innovator’s stage to the laggard’s stage. The report illustrates the lifecycle of the market, focusing on the adoption rates of the major regions such as the US, China, Japan, Germany, and the UK. Our researchers have included key purchase criteria, adoption rates, adoption lifecycles, and drivers of price sensitivity to help companies evaluate and develop growth strategies for 2022-2027.

Global Market Customer Landscape

Who are the Major Multi-factor Authentication Market Companies?  

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. 

We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, such as

• Beyond Identity Inc.
• Broadcom Inc.
• Duo Security Inc.
• Entrust Corp.
• FEITIAN Technologies Co. Ltd.
• ForgeRock Inc.
• Frontegg
• Fujitsu Ltd.
• FusionAuth
• HID Global Corp.
• Microsoft Corp.
• NEC Corp.
• Okta Inc.
• OneSpan Inc.
• Quest Software Inc.
• RSA Security LLC
• SecureAuth Corp.
• TransUnion
• Yubico AB

Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak. 

Market Analyst Overview

The market is witnessing significant growth driven by the increasing need for security measures against cyber threats such as malware, phishing, and ransomware. Regulatory compliances like the FTC Safeguards Rule are pushing organizations to adopt higher-order authentication models despite potential inconvenience. The market is characterized by the adoption of cloud security and the rise of Chief Information Security Officers overseeing authentication processes. Technologies such as Multi-factor authentication (MFA is gaining traction, with companies like Symantec Corporation investing in R&D for more secure authentication methods. However, challenges such as implementation complexities and cost hinder widespread adoption across industry verticals like BFSI, Education, Utilities, Manufacturing, and Logistics.

Segment Overview

Our report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2028. We have segmented the market based on deployment, component, and region.

• Deployment Outlook 
  • On-premises
  • Cloud

• Component Outlook 
  • Services 
  • Product

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • South America
    • Chile
    • Argentina
    • Brazil
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

  Market Scope
  Report Coverage	Details
  Page number	159
  Base year	2022
  Historical year	2017-2021
  Forecast period	2023-2027
  Growth momentum & CAGR	Accelerate at a CAGR of 21.41%
  Market growth 2023-2027	USD 20.80 billion
  Market structure	Fragmented
  YoY growth (%)	20.37
  Regional analysis	North America, Europe, APAC, South America, and the Middle East and Africa
  Performing market contribution	North America at 35%
  Key consumer countries	US, China, Japan, Germany, and UK
  Competitive landscape	Leading companies, Competitive Strategies, Consumer engagement scope
  Key companies profiled	Beyond Identity Inc., Broadcom Inc., Duo Security Inc., Entrust Corp., FEITIAN Technologies Co. Ltd., ForgeRock Inc., Frontegg, Fujitsu Ltd., FusionAuth, HID Global Corp., Microsoft Corp., NEC Corp., Okta Inc., OneSpan Inc., Quest Software Inc., RSA Security LLC, SecureAuth Corp., Thales, TransUnion, and Yubico AB
  Market Dynamics	Parent market analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period.
  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.

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  What are the Key Data Covered in this Market Research Report?

  • CAGR of the market during the forecast period
  • Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
  • Precise estimation of the market size and its contribution to the parent market
  • Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
  • Growth of the market across Europe, North America, APAC, South America, and Middle East and Africa
  • Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
  • Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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