Digital Identity Wallets To Reach 500 Million Users By 2026, Gartner Predicts
By 2026, it is estimated that a staggering 500 million people will employ digital identity wallets (DIWs) on their smartphones for making verifiable claims, as forecasted by Gartner, Inc. This projection underscores a significant shift towards the adoption of digital methods for identity verification, moving away from the traditional models that are currently prevalent.
Portable digital identity (PDI) solutions are at the forefront of this shift, offering a more comprehensive and user-controlled approach to digital identification. PDI allows individuals to establish their identity through a trusted entity once, after which an identity assertion is created. This assertion can then be stored either with the verifying entity in a centralized model or on the individual's smartphone in a DIW, adhering to a decentralized model. The latter not only enhances privacy and security by giving users control over their data but also leverages verifiable credentials that enable users to affirm certain attributes without disclosing excessive personal information.
Adapting to a New Era of Identity Verification
The transformation towards PDI solutions is driven by the limitations of the current identity verification (IDV) models, which generally involve users providing a photo of an identity document along with a selfie. While this method establishes a baseline of trust, it falls short in several areas. According to Akif Khan, VP Analyst at Gartner, the existing IDV methods are too focused on basic identity data like names and addresses. They lack the capacity to link additional attributes to an individual's identity, such as educational qualifications or health records, which are increasingly necessary as more services move online.
However, the evolution towards PDI is underway, marking a significant shift in how identity is verified digitally. "The market is entering a transition period as PDI solutions are starting to mature, which in the next five years, will reduce the demand for standalone IDV," Khan explained. This transition highlights the growing recognition of the need for a more dynamic and versatile approach to identity verification that extends beyond simple document checks.
One of the most telling signs of this shift is the action taken by governments, notably the European Commission's directive under the eIDAS Regulation. This mandate requires all EU member states to offer a DIW to their citizens by 2026. This move not only signifies a substantial governmental endorsement of digital identity solutions but also sets a definitive timeline for their adoption across Europe.
Vendors are already offering products that align with PDI principles, enabling organizations to harness the advantages of digital identity systems for specific applications. According to Khan, chief information security officers (CISOs) don't have to wait for governmental initiatives to start implementing PDI solutions. For instance, utilizing decentralized identity wallet products for employees can enhance security through strong authentication methods and streamline processes like onboarding and account recovery by eliminating the need for repetitive ID verification.
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