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More than 4.1 billion apps to enable consumers to verify their identity online are projected to be in use globally by 2027, up 82% from 2.3 billion this year, according to Juniper Research.
Use of government-backed digital identities that replace physical-identity documents as a source of verification for third-party apps, such as banking and financial services, will be a key driver behind the trend, according to Juniper’s report, released early Monday. The growing use of digital-identity apps will be key for businesses as they look to reduce identity theft and meet increasingly stringent know-your-customer regulations, the report says.
Juniper defines a digital identity as a digital representation of an entity, which can be one or more individual pieces of identity data, an event, or a signal.
As adoption of these apps increases, the report projects consumers will move away from reliance on passwords for identity verification in favor of biometric verification and multi-factor authentication under a zero-trust model, where identities are continuously authenticated.
The move away from passwords for identity verification is being driven by the belief that other forms of authentication, such as one-time passwords and biometrics, are more secure than passwords. One advantage of biometrics is that the technology is not vulnerable to many techniques used by hackers, such as brute force and dictionary attacks. A dictionary attack attempts to break into a password-protected device or network by entering every word in a dictionary as a password.
Other advantages of moving away from passwords include faster account log-in and elimination of the need to remember a password and of the need to regularly change a password to reduce the risk of it being compromised, the report says.
While digital-identity apps are expected to grow in popularity, so too is the use of digital wallets, which can hold key pieces of identification, such as a driver’s license, to verify a consumer’s identity online. While digital wallets will be the primary competitor to identity apps, one downside with wallets is that wallet providers struggle to monetize identity in the same way as they have payments, due to competition from government-run schemes limiting adoption, the report adds.
