Out of Band Authentication Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Key Highlights

• The global out of band authentication market was valued at USD 443.81 million in 2020, and it is expected to reach a value of USD 846.80 million by 2026, registering a CAGR of 11.37% over the forecast period 2021 - 2026. Digitalization and advancement of technology have increased the number of connected devices that have fueled the frequency of cyber-attacks and boosted the adoption of authentication solutions and services by governments and enterprises.
• Rapid penetration of consumer electronics such as laptops, tablets, smartphones, and smart gadgets has increased the usability of the various internet-based solutions and services across the world. For instance, in 2019, the global internet users reached 4.38 billion, and unique mobile users stood at 5.1 billion. It has forced the services providers to opt-out of band authentication solutions to prevent any compromise of their services in the future. Moreover, growing cloud adoption across most enterprises and the growth of emerging technologies, such as artificial intelligence, big data, and blockchain across various end-users have also impelled the market.
• Additionally, widespread adoption of portable own devices in a modern work environment provides flexibility, reduces IT costs and enhances employee’s productivity. Due to this, there is a sudden spike in the number of businesses implementing enterprise mobility solutions that enable and encourage employees to work at any time, anywhere, from a wide range of devices.
• Some studies show that BYOD (bring your own device) approach lets employees utilize the benefits of greater flexibility, collaboration, and work-life balance to improve productivity by up to 34%. However, it also raised security-related issues which are expected to drive the out of band authentication market as many enterprises are increasingly adopting software solution that generates one-time passcodes (OTPs) and sent using via email or SMS text message to establish a secure connection to secure their networks from the security threats.

Key Market Trends

BFSI Segment is Expected to Witness Significant Growth and Drive the Market

• Increasing internet penetration, growing m-commerce market, and early adoption of online payment services is expected to drive the out of band authentication market, which is often used in financial institutions and other organizations with high-security requirements.
• Most financial institutions are utilizing various forms of out of band authentication methods, for instance, voiceprint technology used to provide biometric verification by the user or the user is asked to text a code displayed after login from their registered smartphone to the institution. It secures the communications with only a slight increase in complexity for a user. Moreover, the methods are also much cheaper to financial institutions to deploy than security key fobs or more complex biometric methods and hence, are expected to drive the market.
• In addition, the number of security concerns associated with mobile payments is on the rise and is expected to compel the market growth. For example, malicious app clones are a major problem when it comes to android phones as such apps are either published on alternate, less regulated app stores or distributed as standalone.apk packages. In the case of iOS fraudsters target via jail-broken devices. Owing to this, various vendors are increasingly spending on payment security and are tying up with the out of band authentication providers and accelerating the market.

North America Will Experience Significant Growth and Drive the Market

• North America is expected to hold a prominent share in the out of band Authentication market owing to the increase in the number of Internet of Things (IoT) and connected devices and vulnerabilities associated with them are some of the factors driving the adoption of OOBA solutions and services.
• The government of Canada and the United States relies heavily on the use of information systems to support its basic and essential business functions and to deliver programs and services their citizens. For instance, the Government of Canada uses an out-of-band token, which is a combination of a physical device (e.g., mobile phone, landline telephone) and a secret that is transmitted to the device by a verifier each time authentication is required.
• Also, the COVID-19 pandemic has resulted in an increase in mobile payments in the United States. For instance, San Francisco-based AppsFlyer, a software-as-a-service (SaaS) mobile analytics and attribution platform, reports a 22% increase in in-app purchases during the month of March. This, as United States residents, has begun to rely even more on their mobile devices while being stuck at home due to the global Coronavirus (COVID-19) pandemic.
• For instance, digital banking apps managed to procure a 17% increase in revenues by 17%. Virtual banking apps in the United States experienced a 60% increase in downloads and installations as customers weren't able to visit brick-and-mortar retail locations due to lockdowns. It is expected to temporarily drive the market in North America.

Competitive Landscape

The out of band authentication market is concentrated and is dominated by a few significant players like NortonLifeLock Inc, Cisco Systems Inc., Censornet Ltd., Deepnet Security Ltd. and Early Warning Services LLC. These major players, with a prominent share in the market, are focusing on expanding their customer base across foreign countries. These companies are leveraging strategic collaborative initiatives to increase their market share and increase their profitability. However, with technological advancements and product innovations, mid-size to smaller companies are growing their market presence by securing new contracts and by tapping new markets.

• June 2020 - Thales Technologies has signed a contract with Samsung through which it will provide next-generation single-chip solutions embedded in Samsung's latest flagship smartphone. Its secure solution enables connectivity and contactless services in Samsung’s Galaxy S20 series. The single-chip combines an embedded secure element (eSE) and an embedded SIM (eSIM) that enables high-performance contactless services and a fully digitalized mobile connectivity experience for highly compact smartphones, smartwatches, and tablets.
• May 2020 - OneSpan, one of the global leaders in securing remote banking transactions, announced that leading Turkish bank, DenizBank, is using OneSpan’s Mobile Security Suite to protect 2.6 million mobile customers across the bank’s mobile banking app MobilDeniz, mobile wallet fastPay and card management application DenizKartım.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support