Homomorphic Encryption Market Size By Component (Solution [Encrypted Data Analytics, Encrypted AI/ML Data Modelling, Encrypted Data Linkage, Encrypted Database Querying, Encrypted Biometrics and Behavioral Data], Service [Professional Service, Managed Ser

Homomorphic Encryption Market Size By Component (Solution [Encrypted Data Analytics, Encrypted AI/ML Data Modelling, Encrypted Data Linkage, Encrypted Database Querying, Encrypted Biometrics and Behavioral Data], Service [Professional Service, Managed Service]), By Type, By Application, By End-Use & Global Forecast, 2023 - 2032

Homomorphic encryption industry will expand substantially over 2023-2032 due to the increasing number of cyberattacks.

In recent years, globally generated data volume has increased significantly, driven by the ongoing industrial efforts toward digitization and automation. Rapid integration of cloud technologies and IoT has further aggravated the risk of cyber breaches and data security concerns. An array of business verticals, right from private companies to government and general consumers, are experiencing a grave threat of cyber-attacks, causing the loss of valuable and confidential data.

K-12 schools across Western countries have been the victim of cyberattacks over the last couple of years after the onset of e-learning and the rapid adoption of online-educational platforms during the COVID-19 pandemic. For instance, in a series of ransomware and cyber-attacks, Chicago Public Schools reported a ransomware attack, which resulted in the loss of personal information of more than 500,000 students, and staff members. Prior to this, the Winthrop Public Schools in Massachusetts and the Miami-Dade County Public Schools faced denial-of-service attacks in February 2021 and September 2020, respectively.

The homomorphic encryption market is segregated based on type, component, application, end-use, and region.

By type, the industry is classified into fully homomorphic encryption and partially homomorphic encryption. The fully homomorphic encryption (FHE) segment size could reach over USD 140 million by 2032, owing to its resilience against quantum attacks. FHE has emerged as a promising cryptographic scheme that helps users perform computations on encrypted data without any arrangement between data privacy and data usability.

Based on application, the homomorphic encryption market share from data privacy applications will grow significantly over 2032, led by the increasing volume of digital data and the growing concerns associated with data privacy. Giant tech companies such as Amazon, Google, and Microsoft are focusing on novel technologies to strengthen data security. This will favor market growth in the long run.

In terms of end-use, the market is segmented into BFSI and healthcare. The demand for homomorphic encryption across the BFSI sector will rise substantially by 2032 due to strict government regulations and directives pertaining to data privacy and protection. The banking sector is highly prone to data breaches and cyber-attacks, causing both data and monetary losses. One of the most common problems associated with cybersecurity in banking is phishing assaults.

As per the Hong Kong Monetary Authority (HKMA), banks reported 169 cases of suspicious websites, phishing SMS, emails, and mobile applications in the first half of 2021, 145% higher than the 69 cases detected during the same time in 2020.

Regionally, APAC homomorphic encryption market was worth over USD 20 million in 2022. With the rising number of SMEs in India and China, the demand for homomorphic encryption is set to witness significant expansion through 2032. The rising number of internet users in the region, and substantial developments focusing on providing nationwide internet connection will spur market growth. Moreover, a significant rise in the adoption of digital banking and e-wallets is fueling the risk of cyber threats.