Digital Identity in BFSI

Global Digital Identity in BFSI Market to Reach US$81.7 Billion by 2030

The global market for Digital Identity in BFSI estimated at US$33.9 Billion in the year 2024, is expected to reach US$81.7 Billion by 2030, growing at a CAGR of 15.8% over the analysis period 2024-2030. Solutions Offering, one of the segments analyzed in the report, is expected to record a 17.2% CAGR and reach US$60.1 Billion by the end of the analysis period. Growth in the Services Offering segment is estimated at 12.3% CAGR over the analysis period.

The U.S. Market is Estimated at US$9.2 Billion While China is Forecast to Grow at 21.1% CAGR

The Digital Identity in BFSI market in the U.S. is estimated at US$9.2 Billion in the year 2024. China, the world`s second largest economy, is forecast to reach a projected market size of US$18.0 Billion by the year 2030 trailing a CAGR of 21.1% over the analysis period 2024-2030. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at a CAGR of 11.5% and 14.2% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 12.6% CAGR.

Global Digital Identity in BFSI Market – Key Trends & Drivers Summarized

Why Is Digital Identity Becoming a Cornerstone of the BFSI Sector’s Transformation?

Digital identity systems are rapidly transforming how banking, financial services, and insurance (BFSI) institutions onboard customers, authenticate transactions, and manage regulatory compliance. By enabling secure, remote verification of individuals through biometric data, document scanning, AI-powered facial recognition, and blockchain-based credentials, digital identity tools replace slow and error-prone manual verification processes. These systems support not only frictionless customer onboarding but also continuous authentication throughout the customer lifecycle, improving security and user experience.

As the BFSI industry accelerates digital transformation and expands remote access to services, digital identity solutions are emerging as critical infrastructure. They allow institutions to verify users across mobile banking apps, digital wallets, insurance portals, and investment platforms—without requiring physical presence. Moreover, they enable institutions to maintain real-time Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance, helping avoid regulatory penalties and enhance risk management. Digital identity frameworks are increasingly seen as strategic enablers of trust, scalability, and innovation in financial ecosystems.

What Technologies Are Reinventing Digital Identity in Financial Services?

Digital identity platforms in BFSI are leveraging a suite of advanced technologies to ensure security, compliance, and user convenience. Biometric verification—including fingerprint, facial, iris, and voice recognition—is being widely deployed for identity proofing and multi-factor authentication. Optical Character Recognition (OCR) and AI-powered liveness detection ensure document authenticity and prevent spoofing during remote onboarding. Machine learning algorithms further strengthen fraud detection by analyzing behavioral patterns, login anomalies, and device fingerprints.

Blockchain and decentralized identity frameworks are also gaining momentum for their ability to give users control over their personal data while ensuring immutability and traceability. Digital identity wallets—where users store credentials on their mobile devices—are being developed for real-time authentication across banking services. Interoperability with national digital identity systems, such as Aadhaar in India or BankID in Scandinavia, is allowing financial institutions to expand their reach, reduce onboarding costs, and offer faster, compliant services to wider populations.

Which Use Cases and Institutions Are Leading Digital Identity Implementation?

Retail banking and neobanks are at the forefront of digital identity adoption, using it for seamless onboarding, instant account creation, passwordless logins, and customer self-service portals. Credit card providers and lenders use digital identity solutions to assess creditworthiness, authenticate applications, and reduce fraud in digital transactions. Insurance companies rely on these platforms to verify claimants, prevent duplicate policy submissions, and streamline policy issuance, especially in direct-to-consumer channels.

Corporate banking, wealth management firms, and fintech platforms are increasingly integrating digital identity tools to enable secure B2B and B2C interactions. Payment service providers and digital wallet operators are embedding biometric and token-based identity layers into their apps to ensure secure transactions and fast KYC updates. Cross-border financial services, such as remittances and foreign exchange, benefit significantly from digital identity as it reduces dependency on local branches while ensuring compliance with international AML frameworks.

What Is Driving Growth in the Digital Identity Market Across BFSI?

The growth in the digital identity in BFSI market is driven by several factors, including the widespread digitization of financial services, growing pressure to meet stringent KYC and AML regulations, and the need to prevent identity fraud and cybercrime. The increasing adoption of mobile banking, contactless payments, and remote financial advisory services is prompting institutions to deploy scalable and secure digital identity infrastructures. Regulatory mandates for eKYC and data privacy laws are further pushing institutions toward advanced identity verification and consent management tools.

End-use trends such as the expansion of neobanking and embedded finance, the need to onboard underserved and unbanked populations digitally, and the adoption of decentralized finance (DeFi) platforms are accelerating the integration of identity solutions into digital channels. Additionally, the growing importance of customer trust, personalization, and frictionless service delivery is driving financial institutions to invest in intuitive, compliant, and resilient digital identity ecosystems. As fraud tactics evolve and digital adoption deepens, digital identity in BFSI is poised to become the foundational layer of secure and inclusive financial engagement.

SCOPE OF STUDY:

The report analyzes the Digital Identity in BFSI market in terms of units by the following Segments, and Geographic Regions/Countries:

Segments:
Offering (Solutions Offering, Services Offering); Identity Type (Biometric Identity, Non-Biometric Identity); Deployment (Cloud-based Deployment, On-Premise Deployment)

Geographic Regions/Countries:
World; United States; Canada; Japan; China; Europe (France; Germany; Italy; United Kingdom; Spain; Russia; and Rest of Europe); Asia-Pacific (Australia; India; South Korea; and Rest of Asia-Pacific); Latin America (Argentina; Brazil; Mexico; and Rest of Latin America); Middle East (Iran; Israel; Saudi Arabia; United Arab Emirates; and Rest of Middle East); and Africa.

Select Competitors (Total 36 Featured) -

• ACI Worldwide
• Auth0 (part of Okta)
• BioCatch
• Daon
• Entrust
• Experian
• Gemalto (Thales Group)
• HID Global
• ID Analytics (LexisNexis Risk Solutions)
• IDnow
• Jumio
• Kount (Equifax)
• Mitek Systems
• NEC Corporation
• Onfido
• OneSpan
• Ping Identity
• Socure
• TransUnion
• Veriff

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