A new study from Juniper Research has found that the number of digital identity apps in use will exceed 4.1 billion globally by 2027; rising from 2.3 billion in 2023.
This represents a growth of 82% over the next four years. This increase will be driven by the use of government-backed digital identities to replace physical identity documents as a source of verification for third-party apps, such as banking and financial services. This will be critical, as businesses aim to reduce identity theft and meet increasingly stringent KYC (Know Your Customer) regulations.
Verification moves to zero trust
The research also identified a move away from reliance on passwords for identity verification, with these replaced by biometric verification and MFA (Multi-factor Authentication) under a zero-trust model, where identities are authenticated continuously.
This approach is more resistant to traditional hacking methods, such as phishing; reducing the risk of data breaches.
SSO (Single Sign On)
Consumers are motivated by convenience; making streamlining of user experience for retaining them"
Zero trust will be delivered via SSO (Single Sign On), which allows the user to access multiple accounts via a central, secured system. Critical to SSO is the use of mobile subscriber identity, with the number of mobile devices using their mobile number for SSO predicted to reach 2 billion in 2027; up from 922 million in 2023.
Research Author - Michael Greenwood explained, “Consumers are highly motivated by convenience; making a streamlining of user experience significant for attracting and retaining them. SSO can achieve this, while also appealing to security-conscious users.”
Identity apps vs Digital wallets
The primary competition for dedicated digital identity apps will come from digital wallets, which offer payment functionality alongside a digital identity capability. For instance, in some US states, digital driver’s licenses held within Apple Wallets are fully recognized.
However, these digital wallets will struggle to monetize identity in the same way as they have payments, due to competition from government-run schemes limiting adoption.
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