Its new market study The Future of Personal ID to 2023, charts how this will grow at 2.5% across the next five years to reach $10.30 billion in 2023. As this happens the personal ID industry will have to respond to new threats, evolving government priorities, the challenge of integrating new technologies, and reposition itself in a landscape increasingly dominated digital identity platforms.
Smithers Pira’s expert analysis identifies the following four trends as being key to shaping the future of this physical identity across the next five years:
The transition to electronic passport (epassports) – while no longer revolutionary – is poised to be the key driver across 2017-2023, making this the fastest growing document type covered by Smithers Pira’s study.
The largest share by value goes to other chip-enabled national identity documents (eNIDs). In 2018 these represent just over two thirds of the market. In contrast non-electronic version of both documents will see a decline across the forecast period.
In 2018 it is estimated that more than 600 million epassports will be in circulation from over 122 issuing countries. By 2023, 135 countries will have epassports and collectively represent more than 96% of the total number of passports issued.
There will be a noticeable increase in demand for birthing documents across the next five years due to a series of initiative to enrol citizens of some the world poorest countries for the first time in government programmes.
One of the most significant changes that will impact how epassports are used across this time will be the implementation of the International Civil Aviation Organization’s (ICAO) logical data structure 2 (LDS2). While interoperability and readability of information implanted on a passport’s integrated circuit were the key focus for LDS1, LDS2 will open a whole new toolkit for operators and technology suppliers.
LDS2 will move such passports from a largely static to a truly dynamic document, with the option to incorporate more secure digital storage of travel data (visas and travel stamps) and other information that could facilitate the travel of the holder (additional biometrics) over its lifetime. The ability to add secondary biometrics (iris and fingerprint) post-issuance provides states with more choices in national policy regarding secondary biometric storage and trusted traveller programmes.
At airports and other controlled points in travel LDS2 will give scope for greater automation of passenger and document processing. Streamlining various processes has strong potential to improve the flow of passenger traffic, and will enable authorities to redirect border staff to more high-value activities.
The current schedule is for the ICAO new technologies working group to complete work on LDS2 in late 2018 or early 2019.
Public and private sector convergence
Historically government authorities issued a range of static identity documents to provide evidence of an individual’s identity, like permission to enter a country. In contrast the private sector – financial institutions, mobile network operators, etc – focused more on maximising authorised transactions and minimising fraudulent ones.
In an increasingly electronically interconnected world the needs and technologies of these two formerly distinct segments are increasingly converging. For example, eGovernment programmes are rapidly expanding worldwide, because they are much more cost-effective, but rely on leveraging transactional processes pioneered and refined by business users.
Simultaneously the private sector is seeking to reduce its risk exposure to identity theft and synthetic identities created from data breaches, to comply with new government regulations related to privacy (GDPR), digital identities (eIDAS), and anti-money laundering (AML) and others, and to minimize friction caused by onboarding.
From an industry perspective this is seeing companies that previously focussed on the production of components and the printing of the physical documents, increasingly turning their attention to post-issuance verification and use processes. This demands new skills and technology – principally in software platforms – and these are being acquired via takeovers, and commercialised via the creation of new dedicated business units.
A threat however comes from the ease with which companies that already have a presence in the online world could exploit these opportunities. Large internet companies like Google, Facebook and Alibaba are acquiring start-ups in biometrics and verification software.
While much of the contemporary focus is on electronic rather than physical security, this remains a threat. One trend in the security features market is the arrival of additional features that inhibit surface attack, where the photo printed at issuance is altered or replaced.
One such solution from Surys is HoloID. This is a photopolymer patch that is a holographic copy of the issuance photo on a passport. It is applied to the third – or observation – page of the passport book to pose an additional and complex challenge to counterfeiters.
An alternative approach developed by Canada’s Opulux is Polycarbonate ID-Lock (PC ID-Lock). This is a multi-colour colour-shift security feature that sits on top of the laser-engravable polycarbonate layer, to verify that it has not been penetrated. The PC ID-Lock is embedded within the polycarbonate structure during lamination process.
The Future of Personal ID to 2023 explores these and other changes that will help define the future of this market, and quantifies them in an exclusive, comprehensive data set. For more information on this industry-leading business intelligence tool download the brochure today.
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