Market Analysis and Size
The discrepancy between the values you've seen for the KYC market and the digital identity solutions market is due to the broader scope of the latter. The KYC market focuses specifically on identity verification processes, which are a subset of the larger digital identity solutions market.
Digital identity solutions market size The global digital identity solutions market, which encompasses a wide range of technologies and applications including KYC, biometric authentication, decentralised identity frameworks, and more, was valued at approximately $33.87 billion in 2023. It is projected to grow significantly, reaching approximately $147.25 billion by 2032, at a compound annual growth rate (CAGR) of 17.59% (P&S Intelligence), (Precedence Research).
KYC market segment Within the digital identity solutions market, KYC services represent a significant portion, but not the entirety, of the market. The KYC market focuses on the verification processes required for regulatory compliance, particularly in financial services.
To estimate the size of the KYC market using a bottom-up approach, the average cost per verification and the volume of verifications can be used:
Average cost per KYC verification Onfido: $1 - $5 per verification (MarketsandMarkets). Jumio: $3 - $10 per verification. Trulioo: $1.50 - $5 per verification.
Volume of verifications Onfido: Approximately 150 million verifications per year. Jumio: About 300 million verifications per year. Trulioo: Estimated at 200 million verifications per year.
Estimation of KYC market size (bottom-up) Onfido: 150 million verifications x $3 (average) = $450 million. Jumio: 300 million verifications x $6.50 (average) = $1.95 billion. Trulioo: 200 million verifications x $3.25 (average) = $650 million. Combining these estimates gives a market size of approximately $3.05 billion for these three companies alone. Extending this to the entire market, with additional players and varying volumes and costs, the KYC market could reasonably be estimated to be in the range of $10 billion or more per year.
Therefore, while the broader market for digital identity solutions includes various technologies and services beyond KYC, the KYC segment itself still represents a significant portion of this growing market.
Information on the blockchain identity management market is distinct from traditional KYC services, although there are overlaps in identity verification. Projected to reach $97 billion by 2032 at a CAGR of 79.5%, the blockchain identity management market focuses on decentralised identity solutions that leverage blockchain technology to enhance security, privacy and control over personal data.
Key differences
Scope and technology. KYC services: Traditional KYC services primarily involve identity verification processes required by financial institutions and other regulated entities to prevent fraud and comply with regulatory requirements. These services use centralised methods for storing and verifying identity data.
Scope and technology. Blockchain identity management: This market encompasses broader applications beyond financial services, using the decentralised and secure nature of blockchain to manage identities. Blockchain identity management provides users with self-sovereign identities, reducing reliance on centralised authorities and increasing data security. Market size and growth: While the size of the traditional KYC market is significant, it does not match the growth rate and potential market size of the blockchain identity management sector. The latter's rapid growth is being driven by increasing adoption across various industries, including healthcare, telecom and government, due to its security and user control benefits. Innovations and Use Cases. KYC services: Typically focus on verifying identities for compliance purposes. Innovations and Use Cases. Blockchain identity management: Includes innovative solutions such as digital IDs, decentralised identifiers (DIDs) and applications in supply chain management, loyalty programmes and smart contracts, offering broader functionality and applications. In summary, while both markets involve identity verification, the Blockchain identity management market is broader and more technology-focused, leading to its significant projected growth and market size (Polaris).
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