Digital ID Firms Will Cash in As Consumers Pour into Online Commerce, Juniper Projects

Consumers worldwide went online in unprecedented numbers following the onset of the pandemic, but along with that trend comes an increasing need to establish the identities of users, according to a report issued Monday by Juniper Research.

As a result, revenue for companies around the world that develop technology that can verify identity online will more than double, from $26 billion last year to $53 billion in 2026, Juniper forecasts in its report, “Digital Identity: Key Opportunities, Regulatory Landscape & Market Forecasts 2022-2026.” 

Indeed, the report underscores the part of this market that establishes, or verifies, digital identities for onboarding and other purposes. That part of the market will grow from $9 billion to more than $16 billion over the same span of time, according to Juniper, a United Kingdom-based research firm. 

Nor will a one-size-fits-all solution be likely to work well. The technology will have to be customized to suit the needs of particular industries. “Digital identity verification tools have become more critical across a broader range of industries than ever, from banking and financial services to e-government, health care, and others,” says co-author Damla Sat, in a statement. “Developing effective user experiences for different verification scenarios will be important for realizing digital identity’s potential.”

Identity verification tools could be especially crucial in the U.S. market, which is underspending on the technology, according to Juniper, which projects the country will account for just 7% of the 2026 revenue. The report blames an absence of both national identity programs and “coordinated strategies” for the weak investment.

U.S. consumers spent $214.6 billion online in the third quarter of 2021, up 6.6% year-over-year, according to the latest figures from the Census Bureau. But the year-over-year increases in the third and fourth quarters of 2020 and the first period of 2021 all exceeded 30% as many consumers who had never shopped digitally before crowded online.