Out-of-Band Authentication Market is Estimated to Witness High Growth Owing to Continued Digitalization
The out-of-band authentication market enables two-factor authentication, providing an additional layer of security to user credentials and login information. It helps verify user identity and prevents unauthorized access to critical systems and network infrastructure. Out-of-band authentication solutions leverage separate communication channels like SMS, phone calls, or push notifications to verify user identity, addressing the limitations of single-factor authentication which relies only on passwords vulnerable to attacks like phishing.
The global out-of-band authentication market is estimated to be valued at US$ 1.36 Bn in 2023 and is expected to exhibit a CAGR of 5.5% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics
Continued digitalization and increasing instances of cyberattacks targeting user credentials are expected to drive the adoption of robust identity verification solutions like out-of-band authentication. As per the report, advanced authentication mechanisms leveraging secondary channels for identity verification offer additional security against threats posed by password reuse, weak passwords and phishing attacks. Out-of-band authentication authenticates users through a separate, additional channel of communication to cross-check identity and prevent unauthorized account or system access even if primary credentials are stolen or compromised. Growing volumes of digital transactions and remote access to applications amid hybrid work conditions have intensified the need for multi-factor authentication, projecting lucrative opportunities for providers of out-of-band authentication solutions. However, lack of widespread network connectivity in some regions remains a challenge for adoption of solutions relying on SMS or push notifications as secondary channels.
SWOT Analysis
Strength: The out-of-band authentication market benefits from growing need to improve cybersecurity. Increasing regulations mandating stronger authentication are also driving demand. Authentication methods in this market provide an additional layer of security beyond usernames and passwords. Providers can leverage various technologies like one-time passwords and security tokens to offer multi-factor authentication.
Weakness: While effective for security, out-of-band authentication does place an additional burden on users with multiple devices or credentials required. This convenience factor can reduce adoption rates. Token management and lost devices also pose challenges. Technical difficulties integrating these solutions also create barriers for some organizations.
Opportunity: Growing digitization and remote work trends are exposing more networks and data to online threats. This expanding attack surface increases the need for robust yet user-friendly authentication solutions. The market has an opportunity to develop authentication methods that are even more seamless and transparent for users. Emerging technologies may also allow for new authentication factors like biometrics.
Threats: Stricter data privacy regulations pose compliance challenges. Solutions must respect user privacy and obtain clear consent. Low cybersecurity budgets and lack of expertise remain hurdles for adoption in some segments. Free or low-cost alternatives can also grab market share for less sensitive applications.
Key Takeaways
Global Out-Of-Band Authentication Market Demand is expected to witness high growth over the forecast period driven by rising cyberattacks. Remote work adoption has accelerated the need for securing network access and preventing unauthorized access to applications and data. Out-of-band multi-factor authentication provides an additional layer of security that goes beyond basic passwords. Important tools in this market include one-time passwords, security software and hardware tokens.
Regional analysis
North America currently holds the largest share of the out-of-band authentication market due to stringent compliance mandates and rapidly growing digital payments and e-commerce sectors that require robust user verification. The Asia Pacific region is expected to grow at the fastest pace with increasing internet and smartphone penetration driving online transactions. Countries like China and India are prioritizing cybersecurity to unlock the potential of digital economies.
Key players
Key players operating in the out-of-band authentication market are The Chemours Company (US), Daikin Industries, Ltd. (Japan), 3M (US), The AGC Group (Japan), Solvay (Belgium), HaloPolymer, OJSC (Moscow), Dongyue Group Limited (China), Gujarat Fluorochemicals Limited (India), Jiangsu Meilan Chemical Co. Ltd. (China), and Shanghai Huayi 3F New Materials Co. Ltd. (China).
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