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Benefits of Digital Identity Solutions

The market for Digital Identity solutions has grown significantly in recent years due to a combination of technological, economic, social and regulatory factors that drive its evolution and adoption by companies in all sectors.

According to the latest global figures published in the IMIR Market Research Report: Global Digital Identity Solutions Market Opportunity and Forecast 2024-2032, the global digital identity software market size was valued at $42 billion in 2023 and is projected to reach 114.99 billion dollars in 2032, growing at a CAGR of 18.6% during the forecast period (2023-2032).

What are the causes of the Digital Identity Solution market quick growth?

The COVID-19 pandemic accelerated the adoption of digital services due to the need to reduce physical contact. This drove demand for digital identity solutions to access remote services securely.

This demand is here to stay, and consequently, since 2020, we have seen a growing digitalisation of services in all sectors, such as banking, government, health, and education. The growth of digital services, such as e-commerce, has also promoted an increase in the variety of digital identity systems that can verify users quickly and securely, facilitating online transactions and services. 

Unfortunately, with the growth of digitalisation, there has been an increase in cyber threats. As the number of digital transactions has increased, so have attempted fraud, identity theft, and other cyberattacks. According to Check Point Research (CPR), cyberattacks continued to rise after the pandemic. In 2022, they increased by 38% compared to 2021, and this number has not decreased since. 

Regulatory Framework

The regulatory framework is another factor driving the growth of the global digital identity market. Legislations such as eIDAS, the General Data Protection Regulation (GDPR) in Europe, and the California Consumer Privacy Act (CCPA) require organisations to manage and protect user identities appropriately. Digital identity solutions help businesses comply with these regulations, avoiding penalties and improving consumer trust.

Technological advances

Advances in technologies such as artificial intelligence, machine learning, biometrics, and blockchain have significantly improved the effectiveness and security of digital identity solutions, making them more attractive and accessible for a wide range of applications.

These combined factors drive rapid growth in the digital identity solutions market, with companies and institutions investing significantly in technologies and systems that offer security, privacy, and efficiency in identity management.

7 Benefits of Digital Identity Solutions

Below, we are going to analyse the benefits that digital identity solutions like nebulaSUITE can offer:

1. Improved Security

Most digital identity solutions have technologies such as biometrics and multifactor authentication (MFA) that help reduce fraud or data encryption for data protection.

  • Biometrics: Implementing biometric authentication (fingerprints, facial recognition, voice recognition) adds extra security layers, making it difficult for cyberattacks or fraud. For example, many financial institutions now use biometrics to authenticate transactions, reducing fraud in mobile payments.
  • Multifactor Authentication (MFA) combines several verification methods, such as passwords, biometrics, and temporary codes sent to mobile devices, providing an additional layer of security. This is crucial in the online banking and electronic commerce sectors, where robust authentication is essential to prevent unauthorised access.
  • Advanced Encryption: Digital identity solutions use advanced encryption techniques to protect personal data during transmission and storage.

2. Operational Efficiency

Digital identity solutions increase the productivity of companies that implement them by automating processes such as identity verification and data validation, reducing costs and eliminating the percentage of human errors. 

  • Real-time verification: Digital identity solutions allow instant identity verification, eliminating the need for slow and expensive manual processes. For example, automated checks can reduce the opening time from days to minutes when opening bank accounts online.
  • Automatic Validation: Digital solutions can automatically validate the accuracy of the data entered, reducing the human errors common in manual processes. For example, digitising registration forms in medical services minimises errors in the registration of patient data and speeds up the registration process.

3. Improvement in the User Experience

Thanks to digital identity solutions, the user experience of banking applications, for example, has improved significantly by offering quick and easy access to services. This combination of simplified access and remote convenience optimises usability and enriches the user’s digital experience.

  • Single Sign-On (SSO): Allows users to access multiple applications and services with a single authentication, eliminating the need to remember numerous passwords.
  • Remote Access: Digital identity solutions allow users to access services from anywhere, essential for remote work and online services. For example, mobile banking and health applications enable users to access their accounts and medical records anywhere.

4. Regulatory Compliance

Digital identity solutions play an essential role in legal compliance, especially in compliance with strict regulations such as eIDAS (EU) and the protection of personal data. In addition, these solutions provide advanced registration and auditing capabilities, which facilitate regulatory compliance monitoring and reporting.

  • Personal Data Protection: Digital identity solutions help organisations comply with laws such as the GDPR in Europe, which requires strict protection of citizens’ data. Companies that use digital identity solutions can easily demonstrate how they protect their users’ data.
  • Registries and Audits: They provide advanced registration and audit capabilities, facilitating regulatory compliance monitoring and reporting. For example, financial services companies must keep detailed records of transactions to comply with anti-money laundering (AML) regulations.

5. Innovation

Some Digital identity solutions integrate emerging technologies such as blockchain, opening up new opportunities.

  • Blockchain: Blockchain-based digital identities offer a level of security and transparency that is crucial for applications such as smart contracts and decentralised financial transactions.
  • Internet of Things (IoT): Integrating digital identities with IoT devices allows the safe and efficient management of multiple connected devices. For example, digital authentication in smart homes ensures that only authorised users can access and control devices.

6. Sustainability and Environmental Efficiency

Digital identity solutions contribute significantly to sustainability and environmental efficiency by reducing paper and carbon footprint use. 

  • Digitalisation of Processes: Digitalizing administrative and identity verification processes significantly reduces dependence on paper. This is especially relevant in sectors such as education and health, where digital documentation is gradually replacing paper records.
  • Teleworking: Secure digital authentication facilitates teleworking, reducing the need for daily travel and, therefore, reducing the carbon footprint associated with transport.
  • Online Services: Access to digital services reduces the need for physical travel to carry out procedures, contributing to lower carbon emissions.

7. Resilience and Adaptability

Digital identity solutions strengthen organisations’ resilience and adaptability, ensuring business continuity and flexibility in times of crisis. 

  • Crisis resilience: In crises like the COVID-19 pandemic, digital identity solutions allow companies and governments to maintain operational continuity. Educational institutions, for example, have been able to continue operating through the digital verification of student identity for online classes.
  • Adaptation to Changes: Digital identity solutions are highly flexible and quickly adapt to new regulations, technologies, and threats, allowing organisations to remain agile and prepared for future challenges.

All these benefits illustrate how the adoption of digital identity solutions like nebulaSUITE can positively transform the company that implements them due to their ability to improve security, comply with regulations, improve the user experience, support the growth of electronic commerce, promote financial inclusion, facilitate digital transformation and guarantee interoperability. Its adoption and evolution will continue to be a priority as the world becomes increasingly digital and connected.

Contact us and learn from our experts how a digital identity solution like nebulaSUITE can improve your company’s productivity and security.

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