Behavioral Biometrics Market

The global Behavioral Biometrics Market is valued at USD 1.3 Billion in 2022 and is projected to reach a value of USD 5.8 Billion by 2030 at a CAGR (Compound Annual Growth Rate) of 23.9% between 2023 and 2030.

Premium Insights

Increased online transactions and fraudulent activities drive global demand for digital authentication. According to the world bank, Two-thirds of adults worldwide now make or receive a digital payment, with the share in developing economies growing from 35% in 2014 to 57% in 2021. In developing economies, 71% have an account at a bank, other financial institution, or with a mobile money provider, up from 63% in 2017 and 42% in 2011. A study commissioned by Gemalto showed that 44% of consumers would leave a bank in case of a security breach, and 38% were switching to another service provider offering better services. This is driving banks and other financial institutions to take advantage of biometric technology, which, through strategic cooperation with partners in the fields of security and technical knowledge, they aim to ensure that all links within the chain will be protected. The US Treasurys subsidiary, one of the five largest banks in the United States, has just begun using Biocatchs Behavioral Biometrics to identify 95% of all malicious cases with a false negative rate below 0.05%.

Increasing smartphone usage for entertainment, socializing, and work-related purposes is leading to an increase in mobile applications that provide these services. Numerous security and privacy concerns are being raised due to the escalating use of mobile applications and data exchange over the Internet. Trends like continuous authentication based on Behavioral Biometrics are gaining popularity due to this development. Identity fraudsters are increasingly exploiting the rise in online services, such as webmail, e-Banks, and e-commerce, that verify users with a username and password. The report of IBM in 2020 indicates a high level of malicious activity due to damaged credentials. Moreover, about 19% of all malicious breaches were the cause behind malicious attacks in 2020.

Key Takeaways

• North America accounts for 30% of revenue share in 2022 and is expected to grow at a CAGR of 10.7% during the forecast period
• Asia-Pacific is expected to witness fastest CAGR between 2022 and 2030.
• Based on Application, the identity and access management segment dominated the market and contributed more than 20% of the total revenue share in 2022.
• The On-premises model held a substantial share of the deployment model segment in revenue in 2022.

The emergence of technologies such as Machine Learning (ML) and Artificial Intelligence (AI) and the increasing adoption of these technologies in applications such as authentication and identification may present a growth opportunity for market participants. Fingerprint biometrics remains the dominant technology, claiming two-fifths of the overall market. However, DNA analysis and retina scanning-based alternatives are under intense research and soon to be utilized on a broader scale.

Economic Insights

Bank of America has reported that small firms have seen nearly 300% increases in digital sales, with emerging services like buying now paying later taking off at unprecedented rates. Behavioral Biometrics can help banks to meet their fraud management and digital business objectives as they move from point solutions to focusing on user experience. A new level of visibility gained by the issuer enables them to distinguish legitimate applicants from cybercriminals, thereby accepting more applications with a higher degree of confidence.

Top Market Trends

1. BSFI Industry to Promote Growth: With the rise of fraud and cybercrime, as well as a focus on enhancing the customer experience, banks have prioritized the prevention of consumer exposure to risk. As new threats emerge almost daily, end-user protection against malware and fraud must be provided without compromising the user experience. With the rise of fintech start-ups and the impending PSD2 (Revised Payment Service Directive) regulations set to increase competition in the sector, the customer experience is becoming an increasingly essential competitive differentiator, necessitating a more nuanced approach. Gemalto commissioned a recent study that revealed 44% of consumers would abandon their bank in the event of a security breach, while 38% would switch to a competitor with superior service. It has sparked the interest of banks and other financial institutions in implementing biometric technology. They are strategically collaborating with partners with security and technological expertise to safeguard every link in the chain.
2. Technological Domination to Augment Growth: Throughout the forecast period, the market is anticipated to be driven by the rising demand for frictionless, uncomplicated client experiences. Moreover, the current processes in cybersecurity and design for client satisfaction are key investment areas for market leaders. Behavioral biometric verification methods are increasingly used to bridge the authentication divide by incorporating a secure, data-driven authentication layer that enables a superior user experience. Behavioral Biometrics systems that can analyze a variety of personal characteristics have proliferated as a result of advances in technology. Constant innovation and simple access to one-of-a-kind solutions have increased the prevalence of technology in various industries. Global networks, the proliferation of devices, and the Internet of Things (IoT) have generated unprecedented data that humans cannot analyze or comprehend. As a result, artificial intelligence, which enables computers to analyze and utilize this data, has skyrocketed. In addition, machine learning, a subfield of artificial intelligence, has played a crucial role in the markets sustained expansion.

Market Segmentation

The global Behavioral Biometrics market can be categorized into the below-mentioned segments Application, Component, Organization Size, Deployment Model, Vertical, and Region. Based on Application, the market can be categorized into Identity & Access Management, Fraud Detection & Prevention Management, and Risk & Compliance Management. Additionally, based on Component, the market can be split between Software and Services. Moreover, based on Platform, the market can be segregated into Small & Medium-Sized Enterprises (SMEs) and Large Enterprises. In addition, based on Deployment Model, the market can be fragmented into On-Premises and Cloud. Furthermore, based on Vertical, the market can be segmented further into BFSI, Retail & eCommerce, Healthcare, Government & Defence, Telecommunications, and Others (Education, Real Estate, & Travel). Likewise, based on Region, the market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Based on Application

Identity and Access Management Services to Dominate Market Due to Rising Integration within Various End Users

The identity and access management segment dominated the market in 2022 and is anticipated to maintain its dominance throughout the forecast period. Identity verification solutions provide various authentication options depending on a users privilege level. Developing fail-safe mechanisms, these solutions also aid in establishing authentication policies for sensitive applications. The application-based market segments are identity verification, continuous authentication, risk and compliance management, and fraud detection and prevention. Increasing awareness among organizations regarding the need to maintain the confidentiality of their data and defend against increasingly frequent and sophisticated intrusions, malware, identity-related fraud, and data breaches aimed at their data is anticipated to propel the segments growth further.

Based on Organization Size

Large Enterprises to Use Behavioral Biometrics on a Larger Scale

In 2022, the segment of large enterprises dominated the market. Large organizations prioritize integrating Behavioral Biometrics into their business applications to increase consumer loyalty and decrease infrastructure costs. This trend is anticipated to increase the demand for Behavioral Biometrics among large enterprises. Large enterprises are adopting Behavioral Biometrics-based cybersecurity measures that provide adaptive authentication and persistent security in response to the sophistication of data theft and intrusions. In addition, Behavioral Biometrics tools enable large organizations to comply with increasingly stringent cybersecurity regulations and standards, such as ISO 27001, NIST 800-171, and the Health Insurance Portability and Accountability Act (HIPAA). Growing technological advancements and technology-driven business models raise consumer expectations for a premium security experience to safeguard personal information. To offer secure services to their consumers, businesses are implementing a combination of two or more biometrics modalities, such as Behavioral Biometrics, facial recognition, voice biometrics, and fingerprint scanning, to enhance the security experience.

Based on Deployment

On-Premises Solutions to Accommodate Largest Market Share due to a Higher Level of Customization

In 2022, the on-premises segment dominated the market. This is because on-premises Behavioral Biometrics solutions are simple to configure and integrate with existing online offerings. In addition, the on-premises implementation offers organizations a high level of customization and incurs lower costs if additional resources are required. The market has been segmented into on-premises and cloud deployments. Cloud deployment facilitates the integration of business applications with third-party applications and provides security for online offerings. Increasing numbers of businesses are employing cloud applications to streamline their data storage.

Based on Vertical

BSFI to Account for Maximum Revenue Share Due to Integration of Heavier Banking Solutions

The BFSI segment ruled the market in 2022 and is anticipated to continue to do so throughout the forecast period. Utilizing Behavioral Biometrics, organizations in the BFSI sector are developing future identification options to combat criminal behavior and secure transactions. The global increase in government initiatives and financial regulations is compelling businesses in the BFSI sector to adopt Behavioral Biometrics solutions to protect customer data and enhance the customer experience. The market is segmented by end-use into BFSI, retail and e-commerce, healthcare, government and defense, IT and telecommunications, and others. The global expansion of open banking systems, which requires banks to expose their digital infrastructure to third parties via application programming interfaces (APIs), can lead to increased fraudulent activities. In addition, the increasing digitization of financial institutions to enhance the customer experience increases the demand for network infrastructure protection measures.

Based on Region

North America to Lead Global Sales Due to Rising Applications of BSFI and Telecom Services

In 2022, North America ruled the market. In North America, market growth is anticipated to be driven by the increasing demand for data security via Behavioral Biometrics solutions and the presence of leading technology suppliers. In addition, end-use industries in the region, such as BFSI, government, IT, and telecom, significantly emphasize implementing Behavioral Biometrics to secure their offerings and consumer data. Governments in the region have a particular interest in behavioral biometric applications and are aggressively funding and coordinating numerous research programs to develop advanced behavioral biometric applications. In October 2017, for instance, the Intelligence Advanced Research Projects Activity (IARPA) initiated the Odin program to develop sensors, algorithms, and other components for advanced biometric technology to combat the rise of cyberattacks in the United States.

The Asia Pacific region is anticipated to experience substantial growth over the forecast period. The increasing prevalence of mobile payment and real-time payment platforms in the region has led to increased fraud occurrences, thereby propelling the demand for Behavioral Biometrics. In addition, financial service providers in the region emphasize providing their consumers with secure authentication solutions based on Behavioral Biometrics. Mastercard, a financial services provider, launched a Behavioral Biometrics-based mobile authentication solution in India in August 2019 to increase the security of e-commerce transactions.

Competitive Landscape

Key actors are implementing new product launches, collaborations, mergers and acquisitions, and enhancements to strengthen their market positions. For instance, Fair Isaac Corporation (FICO) acquired security access provider EZMCOM Inc. in November 2019. The acquisition enabled the former to introduce digital enrollment technology, FICO identity verification, and FICO user identification using multi-factor behavioral authentication capabilities. Key market participants also invest significantly in R&D to enhance their capabilities across new and emergent technologies and integrate them into their products. Fair Isaac Corporation, for example, invested USD 149.5 billion in R&D in 2019 to develop new products and services and update their existing offerings.

The key players in the global Behavioral Biometrics market include - BioCatch Ltd. (Israel) among others.

Recent Market Developments

• February 2023: BioCatch, the leading global provider of behavioral biometric information and cutting-edge fraud prevention technology, has established its headquarters in Australia. In addition, as it expands its activities in Asia Pacific with offices in Australia and Singapore, the company is reinforcing its dominant position in the global market.
• October 2020: BioCatch raised USD 91 million in fresh capital. It added USD 20 million to its Series C, bringing the total investment amount to USD 168 million through October 2020. Major institutions Barclays, Citi, HSBC, and National Australia Bank (NAB) spearheaded the investment.
• June 2020: SecureAuth, an independent software vendor (ISV) for identity security based in the United States, has inked a distribution agreement with Arrow Electronics for Australia and New Zealand. Arrow will offer SecureAuths entire technology portfolio in Australia and New Zealand exclusively through its Enterprise Computing Solutions (ECS) division, establishing the vendors first presence in the region, according to the distributor.

Segmentation of the Global Behavioral Biometrics Market