PSD2 & Open Banking Biometric Authentication Market by Function (Authentication & Authorization, Content Based Attacks Detection, Data Encryption), End Users (Banks, Customers, Marchants) - Global Forecast 2024-2030

PSD2 & Open Banking Biometric Authentication Market by Function (Authentication & Authorization, Content Based Attacks Detection, Data Encryption), End Users (Banks, Customers, Marchants) - Global Forecast 2024-2030

The PSD2 & Open Banking Biometric Authentication Market size was estimated at USD 5.64 billion in 2023 and expected to reach USD 6.21 billion in 2024, at a CAGR 10.27% to reach USD 11.18 billion by 2030.

The second payment services directive (PSD2) is a regulation in the European Union aimed at reshaping the payment landscape by introducing enhanced consumer protection and fostering innovation among payment services. A foundation of PSD2 is the strong customer authentication (SCA) mandate, ensuring that electronic payments are safeguarded by at least two verification elements categorized as knowledge, possession, and inherence. Within this framework, biometric authentication has emerged as a critical tool in open banking, offering a secure and user-friendly way to authenticate users through unique biological attributes such as fingerprints, facial recognition, or iris scans. Embracing biometrics aligns with PSD2's security directives and also elevates user experience by eliminating dependency on conventional tokens or passwords, thereby mitigating fraud risks and streamlining access to financial services. The advent of mobile banking applications has catalyzed a notable upsurge in the integration of biometric authentication within the financial sphere, driving the adoption of PSD2-compliant and open banking biometric solutions. This is complemented by the escalating significance of application program interfaces (APIs) across financial sectors, optimizing the synergy between various banking services and applications. Further propelling this trend is the imperative need to mitigate high-security risks associated with financial transactions, underpinning the necessity of robust multi-factor authentication mechanisms. However, the substantial costs involved, alongside the potential for inaccuracies and false positives that could undermine system efficiency, hinder the adoption of these solutions. Despite these hurdles, there are profound opportunities on the horizon; financial institutions are increasingly pivoting online, prompted by customer-centric regulatory enhancements, presenting ripe conditions for tech startups to innovate in the biometric authentication domain within the PSD2 and open banking biometric authentication market.

Regional Insights

In the Americas, the adaptation to PSD2 and open banking biometric authentication has seen a gradual increase, with the market showing a positive trajectory for digital payment methods. Financial institutions in North America, particularly in the United States and Canada, are investing substantially in biometric technologies to meet the growing demand for secure and convenient authentication methods. Latin America is also witnessing growth in PSD2 and open banking biometric authentication adoption, spurred by regulatory changes and digital transformation initiatives among banks aiming to improve financial inclusivity. In the EMEA region, the market for PSD2 and open banking biometric authentication has shown robust growth, primarily influenced by the European Union's regulatory framework. The PSD2 directive has been a major catalyst in this market, as it emphasizes strong customer authentication (SCA), where biometrics play a pivotal role. European financial institutions are actively incorporating biometric technologies to comply with these regulations and to offer a more personalized banking experience. The Middle East and Africa are also seeing emerging adoption trends, with financial sectors innovating to include biometric systems for identity verification and transaction authentication. Within the APAC region, the adoption of PSD2 and open banking biometric authentication is varied, with advanced economies including Japan, Australia, and Singapore, being at the forefront of implementation. These countries are early adopters of innovative banking technologies, and there is an increasing preference for PSD2 and open banking biometric authentication solutions due to their enhanced security and convenience. Emerging economies in this region have also started embracing biometric authentication systems, aligning with the shift towards digital banking services.

Market Insights

• Market Dynamics
  
  The market dynamics represent an ever-changing landscape of the PSD2 & Open Banking Biometric Authentication Market by providing actionable insights into factors, including supply and demand levels. Accounting for these factors helps design strategies, make investments, and formulate developments to capitalize on future opportunities. In addition, these factors assist in avoiding potential pitfalls related to political, geographical, technical, social, and economic conditions, highlighting consumer behaviors and influencing manufacturing costs and purchasing decisions.
  • Market Drivers
    • Increasing Number of Users with Mobile Banking Application
    • Rising Importance of Application Program Interfaces (APIs) in Different Financial Sectors
    • High-Security Risk in Financial Transactions and Need For Multi-Factor Authentication in Payment Systems
    • Market Restraints
      • High Cost for Security Solution and Potential False Positives & Inaccuracy
      • Market Opportunities
        • Major Shift of Financial Institutions Toward the Online Business and Improving Financial Services with Customer-Centric Regulation
        • Favorable Ecosystem for Tech-Startups to Develop Biometric Authentication
        • Market Challenges
          • Complexities in Minimizing Demographic Bias in Biometrics
          • Market Segmentation Analysis
            • Function: Growing significance of real-time identity and access management systems
            • End Users: Higher deployment of PSD2 and open banking biometric authentication solutions by merchants for reducing friction in payment processes
            • Market Disruption Analysis
            • Porter’s Five Forces Analysis
            • Value Chain & Critical Path Analysis
            • Pricing Analysis
            • Technology Analysis
            • Patent Analysis
            • Trade Analysis
            • Regulatory Framework Analysis
            FPNV Positioning Matrix
            
            The FPNV positioning matrix is essential in evaluating the market positioning of the vendors in the PSD2 & Open Banking Biometric Authentication Market. This matrix offers a comprehensive assessment of vendors, examining critical metrics related to business strategy and product satisfaction. This in-depth assessment empowers users to make well-informed decisions aligned with their requirements. Based on the evaluation, the vendors are then categorized into four distinct quadrants representing varying levels of success, namely Forefront (F), Pathfinder (P), Niche (N), or Vital (V).
            
            Market Share Analysis
            
            The market share analysis is a comprehensive tool that provides an insightful and in-depth assessment of the current state of vendors in the PSD2 & Open Banking Biometric Authentication Market. By meticulously comparing and analyzing vendor contributions, companies are offered a greater understanding of their performance and the challenges they face when competing for market share. These contributions include overall revenue, customer base, and other vital metrics. Additionally, this analysis provides valuable insights into the competitive nature of the sector, including factors such as accumulation, fragmentation dominance, and amalgamation traits observed over the base year period studied. With these illustrative details, vendors can make more informed decisions and devise effective strategies to gain a competitive edge in the market.
            
            Recent Developments
            • Tell Money Limited Partners with Moorwand for PSD2 Compliance
              
              Tell Money Limited, a PSD2 compliance solutions provider, has formed a strategic alliance with Moorwand, an e-money institution (EMI). This partnership is poised to bolster regulatory adherence, safeguarding EMIs from the perils of non-compliance, including thorough investigations, hefty fines, and operational limitations. As part of the collaboration, Moorwand is expected to leverage tell.money's flagship product, tell.gateway, to expedite the deployment of an all-encompassing PSD2 solution.
              
              Banfico and InfoCert Announce Exclusive Partnership to Offer Open Banking / PSD2 Certificates from Banfico’s OB Directory
              
              Banfico Ltd, a provider of open banking technology solutions, has announced its collaboration with InfoCert S.p.A, Europe's certificate authority, to bolster security in its OB directory service. Renowned for verifying open banking certifications and enabling real-time third-party provider (TPP) regulatory status checks, Banfico's offering is now further reinforced by InfoCert's security and trust service expertise. This partnership facilitates banks and TPPs in obtaining and managing their open banking certificates, such as QWAC/QSealC or OBWAC/OBSealC, through the open banking directory, ensuring adherence to regulatory standards and safeguarded financial data transactions throughout Europe.
              
              Shanghai Commercial Bank Taps Salt Edge for PSD2 Compliance Solution
              
              Shanghai Commercial Bank, based in Hong Kong, has strategically allied with Salt Edge to embrace PSD2 compliance for its online banking functions, tapping into the innovative realm of open banking to enrich customer experiences. This partnership positions Shanghai Commercial Bank to extend a more connected financial management experience to its customers, empowering them with secure access to external applications and thus enabling them to keep track of their financial health across various platforms with ease.
            Strategy Analysis & Recommendation
            
            The strategic analysis is essential for organizations seeking a solid foothold in the global marketplace. Companies are better positioned to make informed decisions that align with their long-term aspirations by thoroughly evaluating their current standing in the PSD2 & Open Banking Biometric Authentication Market. This critical assessment involves a thorough analysis of the organization’s resources, capabilities, and overall performance to identify its core strengths and areas for improvement.
            
            Key Company Profiles
            
            The report delves into recent significant developments in the PSD2 & Open Banking Biometric Authentication Market, highlighting leading vendors and their innovative profiles. These include Accenture PLC, Apple Inc., Avanade Inc., Banfico Ltd, Capgemini SE, CardinalCommerce Corporation, ClearBank Ltd., Enfuce Financial Services Ltd., Fujitsu Limited, Google LLC by Alphabet Inc., Incode Technologies Inc., InfoCert S.p.A., INFOSISTEMA, SISTEMAS DE INFORMAÇÃO, S.A. by JYON Group, iProov Limited, LexisNexis Risk Solutions Inc. by RELX Group PLC, Mastercard International Incorporated, Metro Bank PLC, Mollie B.V., Moneyhub Financial Technology Ltd, National Westminster Bank plc, Nok Nok Labs, Inc., Okta, Inc., Plaid Financial Ltd., Salt Edge Inc., TAS S.p.A., Tata Consultancy Services Limited, Tell Money Limited, Temenos Headquarters SA, and Thales Group.
            
            Market Segmentation & Coverage
            
            This research report categorizes the PSD2 & Open Banking Biometric Authentication Market to forecast the revenues and analyze trends in each of the following sub-markets:
            • Function
              • Authentication & Authorization
              • Content Based Attacks Detection
              • Data Encryption
              • Identity Tracking
              • Message Validation
              • Traffic Management
              • End Users
                • Banks
                • Customers
                • Marchants
                • Payment Service Provider
                • Region
                  • Americas
                    • Argentina
                    • Brazil
                    • Canada
                    • Mexico
                    • United States
                      • California
                      • Florida
                      • Illinois
                      • New York
                      • Ohio
                      • Pennsylvania
                      • Texas
                      • Asia-Pacific
                        • Australia
                        • China
                        • India
                        • Indonesia
                        • Japan
                        • Malaysia
                        • Philippines
                        • Singapore
                        • South Korea
                        • Taiwan
                        • Thailand
                        • Vietnam
                        • Europe, Middle East & Africa
                          • Denmark
                          • Egypt
                          • Finland
                          • France
                          • Germany
                          • Israel
                          • Italy
                          • Netherlands
                          • Nigeria
                          • Norway
                          • Poland
                          • Qatar
                          • Russia
                          • Saudi Arabia
                          • South Africa
                          • Spain
                          • Sweden
                          • Switzerland
                          • Turkey
                          • United Arab Emirates
                          • United Kingdom
                          
                          
                          Please Note: PDF & Excel + Online Access - 1 Year