Passwordless Authentication Market SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024 - 2031)

Passwordless Authentication Market Size - Analysis

Passwordless Authentication Market Trends

As enterprises adopt digital transformation strategies and move operations and services online, the exposure of businesses and individuals to cyber threats has increased manifold. Advanced hacking methods such as phishing scams and credential stuffing attacks attempt to steal user login credentials by exploiting human errors or technical vulnerabilities. These traditional cybercrimes have evolved rapidly alongside technological evolution and are becoming significantly more sophisticated.

Biometric login options using fingerprints, facial recognition or iris scanning are gaining traction due to their convenience and ability to uniquely identify individuals. Behavioral biometrics that analyze typing patterns or gestures are also emerging as highly secure passwordless authentication alternatives. The imperative to boost security in today's digital landscape without compromising convenience is a key driver propelling growth of the passwordless authentication market.

Market Driver - Rising Adoption of Biometric Technologies

Touchless biometrics leveraging facial recognition and other contactless biomarkers have gained strong demand amid the ongoing pandemic, enabling touch-free commerce without compromising verification. In manufacturing, biometric time & attendance and access control using fingerprint or iris scans have improved workforce management and security. Governments worldwide are increasingly mandating digital ID programs utilizing biometric identifiers for welfare distributions, driving adoption. Growth in use of biometric modalities for passwordless multi-factor authentication on employee and customer-facing applications is also being witnessed across sectors.

Market Challenge - High Initial Implementation Costs for SMEs

This includes purchasing new smartphones, biometric devices, security keys, setting up single sign-on platforms, and integrating authentication systems with existing applications and databases. For cost-sensitive SMEs, such large capital expenditures pose significant financial constraints that discourage adoption of passwordless authentication technologies. Additionally, SMEs have smaller user bases for distributing implementation costs.

One major opportunity in the passwordless authentication market is the high level of investment being made in next-generation secure authentication technologies. Cybersecurity risks continue rising with digital transformation. So, there is growing recognition among enterprises, technology leaders, and investors of the need for advanced identity verification beyond passwords. This has driven significant capital inflows into developing novel biometric, behavioral, and contextual authentication solutions without compromising user experience.

Key winning strategies adopted by key players of Passwordless Authentication Market

Promoting Convenience: Many players have focused on promotions around how their passwordless solutions provide a more seamless and frictionless user experience compared to passwords. Companies in the passwordless authentication market like Google, Microsoft and Okta have heavily marketed their solutions as making sign-ins fast, easy and hassle-free.

Partnering with developers: FIDO Alliance and other standards groups have actively collaborated with developers to integrate passwordless APIs into websites, applications and devices. Partnerships between FIDO, MasterCard, Microsoft and others in 2020-21 led to passwordless checkouts being optionally available on over 5,000 online stores within a year, driving significant new customer signups.

Segmental Analysis of Passwordless Authentication Market

Insights, By Type: Personalized and Convenient Identification Drives Fingerprint Authentication Adoption

Furthermore, continual technological developments have improved fingerprint sensors' accuracy rates and large-scale deployment has optimized authentication speeds. These advantages have spurred several organizations, particularly financial institutions and e-commerce platforms, to integrate fingerprint login, driving its widespread adoption in the passwordless authentication market.

Insights, By Authentication Type: Ubiquitous Usage Fuels One Time Password as Leading Authentication Method

As OTP generation does not require dedicated hardware, it can be easily implemented into existing authentication architectures. Its minimal setup and operational costs have led to OTPs being commonly used for high-risk transactions, password recovery functions, and employee access. Moreover, regulations like two-factor authentication for banking and finance domain have accelerated OTP adoption in the passwordless authentication market.

Insights, By Deployment Mode: Advantages over On-Premise Drive Cloud Deployment Preference

Cloud platforms also provide automatic firmware updates and patching to keep systems secure. These on-demand, elastic qualities are appealing to organizations wanting to reduce capital expenditure. Furthermore, the Cloud enables applications to be accessed from any internet-connected device, improving workforce mobility, and productivity.

Additional Insights of Passwordless Authentication Market

• Industries with high user interaction, such as BFSI and retail, are increasingly adopting passwordless authentication solutions to reduce helpdesk costs associated with password resets.
• Additionally, a notable statistic is the anticipated acceleration of implementation in developing regions as cybersecurity frameworks evolve. This steady rise in adoption is underlined by the growing preference for biometric systems due to their ease of use, increased accuracy, and robust fraud prevention measures.
• As data protection legislation tightens worldwide, organizations will be compelled to migrate toward passwordless frameworks, driving both awareness and tangible growth in the passwordless authentication market.

Competitive overview of Passwordless Authentication Market

The major players operating in the passwordless authentication market include Microsoft Corporation, Google LLC (Alphabet), IBM Corporation, Thales Group, HID Global Corporation, Fujitsu Limited, NEC CORPORATION, Okta, Inc., Secret Double Octopus (SDO), Cognitec Systems GmbH, Ping Identity, Yubico Inc., Duo Security (Cisco), OneLogin (One Identity), HYPR Corp., Trusona Inc., IDEMIA (formerly known as OT-Morpho), and Privy, formerly PrivyID.

Recent Developments in Passwordless Authentication Market

Passwordless Authentication Market Segmentation

• By Type
  • Fingerprint Authentication
  • Face Recognition
  • Challenge-Response Mechanism
  • Others
• By Authentication Type
  • One Time Password (OTP)
  • Biometric Authentication
  • Token-based Authentication
  • Smart Card-based Authentication
  • Others
• By Deployment Mode
  • Cloud
  • On-premise
• By End-use Industry
  • BFSI (Banking, Financial Services, and Insurance)
  • Retail & E-commerce
  • Healthcare
  • IT & Telecom
  • Government
  • Others