New digital ID entrants and growth opportunities appear on OWI’s 2021 Identity Landscape
The digital ID ecosystem has been undergoing rapid change over the past year, which has brought new players into the space, but also created opportunities for growth and scale, according to One World Identity. OWI introduced its 2021 Identity Landscape in an online event featuring the organization’s CEO Travis Jarae and Managing Director Cameron D’Ambrosi, who broke down their key findings.
OWI was originally founded on the concept that digital identity was broken, with too many data silos. Over the past five years, the organization has launched about 25 products, and completed close to $4 billion in client transaction services, according to the presentation.
In its first investor forum of the year, ‘Riding the Digital Wave to Identity Strategy,’ OWI examined the 2021 Identity Landscape from a strategy perspective, looked at investment trends in the space, and spotlighted decentralized identity startup Gataca.
Jarae notes that the OWI Identity Landscape originally sought to define digital identity and how its ecosystem can be engaged with, and with the market coming together in 2017, 2018, the group began looking at it in terms of “building blocks, platforms and enablers, consumer applications.”
OWI began by asking, “How do we actually measure this market? How do we look at it?” Jarae explains. Looking at this way can be productive for evaluating problem statements, piece together use cases, measure market segmentation, he says.
One change is that OWI is now referring to what it formerly called “market segments” as “solution segments,” which Jarae explains is “because all of these things are not standalone markets anymore.”
Once the segments are mapped out, OWI seeks to identify “platforms,” “enablers,” and “golden cog opportunities.” The later are enablers with a “propensity” to become platforms; with a little help from tailwinds, ‘golden cogs’ may have opportunity for growth and scale.
The 2021 Identity Landscape
Examining the notable features of this year’s landscape, Jarae says that identity and access management (IAM) and fraud prevention are “two very influential, likely platforms sitting right in the middle of this map.” Growth and risk areas are found in the areas around it.
Mobile identity device intelligence, identity resolution, and identity proofing were three previously identified golden cog opportunities.
“A lot of this goes back to thinking about digital identity not as a ‘what,’ but as a ‘how,’” D’Ambrosi explains.
As the market matures, Jarae says, “We’re starting to see market segments either collapse into each other or to grow out and become solution segments on their own,” splitting off from related solutions.
New solution segments introduced this year include consent management, digital identity wallets, and three new cybersecurity segments. Cybersecurity companies are pushing into space as they seek to leverage data they already collect by looking at in in a new way, and OWI expect to see more of them enter the digital identity field.
Identity wallets have been broken out from consumer segment, while other consumer items like biometric rings have so far turned out not to play into identity use cases as much. Big tech companies have been getting into wallets, Jarae notes, and could overhaul what was recently viewed as a niche market.
Inorganic growth is coming for IAM, risk management, mobile identity and device intelligence to allow those vendors to provide full-stack solutions, OWI believes.
Community coming together
D’Ambrosi says he is optimistic for 2021, with COVID eliminating the crutch of physical interaction that had been preventing change in some industries. There is no going back to legacy processes once you make things easier for people with digital interactions, he notes.
Similarly, Jarae observes, “Standards are starting to actually become standard, which is phenomenal, two; we’re seeing interoperability start to play out, we’re seeing cross-collaboration.”
A common thread is that the consumer is in driver’s seat in many more conversations. With so many different kinds of interactions requiring digital ID, the opportunity is increased, but the criteria for success is also becoming clearer.
For identity wallets to work, they must satisfy both low assurance and high assurance use cases, from access to a Spotify account up to mobile drivers’ license (mDL) management.
Vendors will have to therefore continue combining technologies, and taking advantages of developments in areas like behavioral biometrics.
Jarae recalled conducting behavioral biometric testing when at Google 5 years ago. The technology did not really work yet, he says, but is now a “major trend.” Significant investment and real-world implementations are now happening, and in addition to improved sensors, wearables add even more sensors that can be used to identify the individual.
The next big challenge is how to manage all the data. The industry will need to address whether consumers will have control, and if so how.
Resources are being dedicated addressing that challenge, as close to $30 billion was invested in the 2,000 companies OWI examined for the 2021 Identity Landscape.
The discussion also covered the impact of COVID on travel and ecommerce, including mention of American Airlines recent deal with Daon. Companies like ID.me and Idemia were also identified as working on digital ID for contact tracing and similar applications with tremendous potential for adoption over the year ahead. These apps may be initially deployed to serve work cases such as air travel access, but their use could easily expand to events, hotels and a wide range of other industries.