The global out-of-band authentication market was valued at USD 2.39 billion in 2023. The global market is predicted to reach USD 2.98 billion in 2024 and usd 17.20 billion by 2032, growing at a CAGR of 24.5% during the forecast period.
Out-of-band authentication (OOBA) is a validation process involving a communication channel different from the main communication channel of entities planning to create a secured connection. This provides better security for the organization, as the use of a separate channel makes it much more difficult for an attacker to intercept and corrupt the authentication process, forcing the attacker to compromise two communication channels. The rapid penetration of consumer electronics products such as laptops, tablets, smartphones, and smart devices has increased the usability of various Internet solutions and services worldwide.
For example, in 2019, global internet users reached 4.38 billion, and individual mobile users 5.1 billion. It has forced service providers to move away from tape authentication solutions to avoid compromising their services in the future. Furthermore, the increasing adoption of the cloud in most companies and the growth of emerging technologies, such as artificial intelligence, big data, and blockchain among various end-users, have also stimulated the market.
Increased Internet penetration, growing mobile commerce market, and early adoption of online payment services are expected to drive the market for out-of-band authentication, often used in financial institutions and other organizations with high security requirements.
Most financial institutions use different forms of out-of-band authentication methods, such as fingerprint technology, which provides biometric verification by the user, or the user is asked to send the text shown after the login of their smartphone registered in the institution. These methods provide secure communications with only a slight increase in complexity for a user. Furthermore, the methods are also much cheaper to implement for financial institutions than the more complex security key fobs or biometric methods and are therefore expected to drive the market.
In addition, the number of security concerns associated with mobile payments is increasing and is expected to offset the growth of the market. For example, malicious app clones are a major problem on Android phones as these apps are released in less regulated alternative app stores or distributed as standalone.apk packages. In the case of iOS fraudsters, they attack via devices with prison. Because of this, various providers are spending more and more on payment security, connecting with out of band authentication providers and accelerating the market.
Implementing robust two-factor authentication to comply with legal directives in highly regulatory sectors is a notable trend that reinforces the demand for OOBA. In the wake of the growing tenacity of authentication fraud and the resulting revenue loss, the demand for strong two-factor authentication, such as OOBA, is imperative in economies around the world. However, there is a big caveat. The effectiveness of OOBA in saving online fraud largely depends on strict adherence to secondary procedures. For example, the method is more effective if financial institutions strictly adhere to regulatory guidelines. If the hacker clones the phone or changes the mobile phone number registered with the bank, the organization still needs to request additional authorization. On the other hand, the dizzying increase in digital payment methods, especially in developing economies, is also creating a lucrative ground for the expansion of the out-of-band authentication market. Small and medium-sized businesses, especially in the e-commerce industry, are increasingly realizing the benefits of OOBA and are, therefore, integrating it into their authentication methods. The growing adoption of connected devices based on rapid advancements in IoT is catalyzing the growth of the global out-of-band authentication market.
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REPORT METRIC |
DETAILS |
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Market Size Available |
2023 to 2032 |
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Base Year |
2023 |
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Forecast Period |
2024 to 2032 |
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CAGR |
24.5% |
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Segments Covered |
By Component, Authentication Channel, Deployment Type, Organization Size, Vertical and Region |
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Various Analyses Covered |
Global, Regional & Country Level Analysis, Segment-Level Analysis, DROC, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview on Investment Opportunities |
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Regions Covered |
North America, Europe, APAC, Latin America, Middle East & Africa |
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Market Leaders Profiled |
Gemalto (Netherlands), CA Technologies (USA), Symantec (USA), Ping Identity (USA), RSA Security (USA), Entrust Datacard (USA), EZMCOM (United States), Duo Seguridad (United States), StrikeForce Technologies (United States), Nok Nok Labs (United States), SolidPass (Turkey), Protectimus (United Kingdom), SAASPASS (United States), DynaPass (United States), and I-Sprint Innovations (Singapore) and Others. |
North America is expected to hold a significant share of the out-of-band authentication market due to the increase in the number of Internet of Things (IoT) and connected devices, and the vulnerabilities associated with them are some of the factors that motivate the adoption of OOBA solutions and services.
The Governments of Canada and the United States rely heavily on information systems to support their basic and essential business functions and deliver programs and services to their citizens. For example, the Government of Canada uses an out-of-band token, which is a combination of a physical device (for example, a mobile phone or a landline phone) and a secret that an auditor transmits to the device each time authentication is required.
In June 2020, Thales Technologies signed a contract with Samsung, under which it will provide next-generation single-chip solutions integrated into Samsung's latest flagship smartphone. The single chip combines an Integrated Secure Element (eSE) and an Integrated SIM Card (eSIM), allowing high-performance contactless services and complete digital connectivity for highly compact devices like smartphones, smartwatches, and tablets.
In May 2020, OneSpan, a leading security provider for banking transactions, announced using OneSpan's Mobile Security Suite in DenizBank of Turkey to protect 2.6 million mobile customers worldwide. MobilDeniz mobile banking app, FastPay mobile wallet and DenizKart?m card management app.
By Component
By Organization Size
By Deployment Type
By Authentication Channel
By Vertical
By Region
Frequently Asked Questions
The banking and financial services sector is a key adopter of Out of Band Authentication solutions to enhance security measures for online banking, mobile payments, and ATM transactions. These solutions help mitigate fraud risks and ensure secure financial transactions for customers globally.
Technological advancements such as biometric authentication, behavioral analytics, and machine learning algorithms are driving innovation in the Out of Band Authentication Market. These advancements offer more robust and seamless authentication solutions to combat evolving cyber threats.
Some of the key barriers to adoption include high implementation costs, interoperability issues with existing IT infrastructure, and user resistance to change. Addressing these challenges requires effective communication, cost-effective solutions, and user-friendly interfaces tailored to regional preferences.
Emerging economies present significant growth opportunities for the Out of Band Authentication Market due to increasing digitization, rising cyber threats, and government initiatives to enhance cybersecurity. As these economies continue to modernize their IT infrastructure, the demand for Out of Band Authentication solutions is expected to surge.
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