Biometric Banking Market Expected to Reach $23.6 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Biometric Banking Market By Component (Hardware, Software, Service), By Type (Fingerprint, Facial Recognition, Hand Geometry, Iris Recognition, Others), By End User (Retail, Government, Transportation, Healthcare, Hospitality, Others)": Global Opportunity Analysis And Industry Forecast, 2023-2032" The biometric banking market was valued at $5 billion in 2022, and is estimated to reach $23.6 billion by 2032, growing at a CAGR of 17.2% from 2023 to 2032.

The biometric device for banking has experienced a steady growth, owing to the surge in demand for online banking and cashless transactions. The increase in adoption of digital banking services has increased the demand for secure and user-friendly authentication methods. Biometric authentication methods such as fingerprint scanning and facial recognition offer a seamless and quick way for users to access their accounts and authorize transactions. This eliminates the need to remember complex passwords and reduces user frustration.

Moreover, regulations such as the Revised Payment Services Directive (PSD2) in Europe and various data protection laws worldwide have pushed financial institutions to implement stronger authentication methods. Biometric solutions help to meet these regulatory compliance requirements. In addition, the widespread adoption of smartphones and tablets equipped with biometric sensors has made it convenient to integrate biometric authentication into mobile banking apps, further driving market growth. Furthermore, continues advancements in biometric technology may lead to the integration of new and more secure modalities, such as palm vein recognition, gait analysis, or even brainwave-based authentication. Therefore, these are the major biometric banking market trends in recent years. 

Furthermore, major market players have undertaken various strategies to increase the competition and offer enhanced services to their customers. For instance, in June 2021, Visa Inc. partnered with Abu Dhabi Islamic Bank (ADIB). The partnership makes use of Visa Consumer Authentication Service, which employs novel techniques for payment authentication, such as fingerprint and facial recognition. Through this interface, bank clients utilized the ADIB mobile app to validate online transactions.

Additionally, it was the first e-commerce biometric authentication system in the UAE. This strategic implementation helped Visa Inc. to get more involved in an area that was becoming more and more popular, which aided in keeping the company from losing market share to fintech and ensuring that it continues to dominate the payments sector. Moreover, in July 2023, IDEX Biometrics collaborated with Goldpac Fintech Hong Kong Limited, a Goldpac Group Company to internationally implement biometric smart cards based on IDEX Biometrics full fingerprint solution for identity access and payments. This strategic implementation is done to strengthen IDEX biometrics position in the biometric banking market share.   

On the end user, the retail segment attained the highest biometric banking market size in 2022. This is attributed to the fact that retail sector is embracing multi-modal biometrics methods such as voice, iris, fingerprint, and facial identification. In addition, biometric authentication offers a high level of security by preventing unauthorized access, identity theft, and fraudulent transactions by identifying physical characteristics and behavioral patterns.

On the basis of region, Asia-Pacific is considered to be the fastest growing region during the forecast period. This is because industries, including banking, are undergoing rapid digital transformation in Asia Pacific. Biometric authentication played a crucial role in this transformation by enabling secure online and mobile transactions. Furthermore, the growth of digital banking and fintech solutions in the Asia-Pacific region could lead to further integration of biometric authentication in mobile apps and online platforms, providing secure and user-friendly access to financial services.

The pandemic accelerated the adoption of digital technologies across industries, including banking. Banks and financial institutions were prompted to expedite their digital transformation efforts, leading to increased investment in biometric authentication solutions to enhance security and streamline digital processes. As people became more cautious about physical contact, there was a surge in the use of contactless payment methods. Biometric authentication methods such as facial recognition and voice recognition gained prominence as they offered secure and convenient ways to authorize transactions without physical contact. In addition, the pandemic accelerated innovation in biometric technology, leading to advancements such as more accurate facial recognition algorithms, better voice recognition systems, and improved liveness detection. Therefore, COVID-19 had a positive impact on the biometric banking market growth.

Key Findings of the Study

• By component, the hardware segment led the biometric banking market in terms of revenue in 2022.
• By type, the fingerprint segment led the biometric banking market in terms of revenue in 2022.
• By end user, the retail segment led the biometric banking market in terms of revenue in 2022.
• By region, North America generated the highest revenue in 2022.

The key players profiled in the biometric banking market analysis are Charles Schwab and Co., Visa, Inc, JPMorgan Chase & Co, Diebold Nixdorf, Incorporated., NEC CORPORATION, IDEMIA, Infineon Technologies AG, IDEX Biometrics ASA, Synaptics Incorporated, and Axon. These players have adopted various strategies to increase their market penetration and strengthen their position in the biometric banking industry.