The number of digital identity apps being used globally is set to almost double in the next four years.,
That is according to a new study from Juniper Research that has projected the usage of these apps will exceed 4.1 billion by 2027; rising from 2.3 billion in 2023 and representing a surge in growth of 82%.
This increase will be driven by the use of government-backed digital identities to replace physical identity documents as a source of verification for third-party apps, such as banking and financial services. This will be critical, as businesses aim to reduce identity theft and meet increasingly stringent KYC (Know Your Customer) regulations.
Moving to a zero-trust model
The research also identified a move away from reliance on passwords for identity verification, with these replaced by biometric verification and MFA (Multi-factor Authentication) under a zero-trust model, where identities are authenticated continuously. This approach is more resistant to traditional hacking methods, such as phishing; reducing the risk of data breaches.
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Zero trust will be delivered via SSO (Single Sign On), which allows the user to access multiple accounts via a central, secured system. Critical to SSO is the use of mobile subscriber identity, with the number of mobile devices using their mobile number for SSO predicted to reach 2 billion in 2027; up from 922 million in 2023.
“Consumers are highly motivated by convenience; making a streamlining of user experience significant for attracting and retaining them. SSO can achieve this, whilst also appealing to security-conscious users,” said Research author, Michael Greenwood.
Identity Apps vs Digital Wallets
The primary competition for dedicated digital identity apps will come from digital wallets, which offer payment functionality alongside a digital identity capability. For instance, in some US states, digital driver’s licences held within Apple Wallets are fully recognised. However, these digital wallets will struggle to monetise identity in the same way as they have payments, due to competition from government-run schemes limiting adoption.
Achieving a common standard in the EU
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In fact, the spotlight has already turned towards digital identity apps in Europe and how governments can use these to replace physical documents on a wider level. In February, the European Commission (EC) published the first version of a common EU Toolbox, or guide, aimed at helping Member States implement the European Digital Identity Wallet (EUDI Wallet) prototype.
On March 1st the European Commission said it had presented proposals to modernise driving licence rules, including the introduction of a digital driving licence valid throughout the EU.
“To simplify the recognition of driving licences between Member States, the Commission proposes the introduction of a digital driving licence, in a world first. It will be much easier to replace, renew or exchange a driving licence since all procedures will be online. In the same vein, it will also be easier for citizens from non-EU countries with comparable road safety standards, to exchange their driving licence for an EU one,” it said
