Digital identity (finally) broke through in 2021, with more unicorns minted last year than ever before. We could not be more excited about the prospects for 2022, as digital identity strategy remains top of mind for investors and executives alike. This year’s Liminal Landscape has a few significant changes from the 2021 landscape. We added a few new features, introduced several new solution segments, and said goodbye to solution segments that have been with us for the past few years.
If you are new to Liminal Landscapes, you may find it helpful to start by watching some of our introductory videos available here. As a reminder, The Liminal Landscape is intended to be a tool for creative exploration and decision-making. We’ve intentionally left logos off the landscape to reduce noise and minimize complexity.
Every summer we begin our re-evaluation of the digital identity landscape. Over a series of internal workshops, we agree on the biggest shifts in the market that require adjustments to the landscape. These shifts can be technological, process-oriented, regulatory, or purely based on product-market awareness. We test our hypotheses with over 100 trusted advisors and experts to align on what eventually becomes the next year’s landscape.
This year, we sharpened our pencils to introduce two new features:
Product Feature to Solution Segment Mapping
Based on over 200 client engagements across nearly every solution segment on the landscape, we’ve identified the 10-15 most defining product features for each segment. This has been incredibly helpful for determining when to merge and when to split solution segments.
If a solution segment’s product features shrink below 7, we make the decision to either merge the solution segment with a similar segment with overlapping features or remove the solution segment altogether, if we can find the right home for the product features.
If a solution segment’s product features grow to over 17, we make the decision to either split the solution segment into two segments or re-allocate features to an adjacent segment based on product-feature fit.
By placing boundaries around the product feature to solution segment mapping, our landscape has become much more useful for company benchmarking. You can learn more about the product feature to solution segment mapping by contacting us directly.
New Solution Segment Type: Ubiquitous Features
In previous years, we’ve simply removed solution segments as their product features become ubiquitous or simply become table stakes for many solution segments. We decided that it was better to show which solution segments are going through this transition over time, rather than removing them altogether. Now you will be able to see which solution segments we expect to become critical components to the entire landscape vs. component pieces across product suites.
Introducing the 2022 Liminal Digital Identity Landscape
Based on the product feature to solution segment mapping, we had more changes this year than in previous years, including the splitting and merging of solution segments and the placement of the solution segment on the landscape.
The Landscape now includes 31 solution segments (down from 33 in 2021). The Landscape includes 11 platform segments (8 of which are self-managed data-type solutions), 7 enablers (6 of which are deterministic data-type solutions), 6 ubiquitous features segments (5 are self-managed data-type solutions), and 7 golden cogs (3 deterministic, 3 probabilistic, and 1 self-managed data-type solutions). The security-focused solution segments are maturing faster than the rest of the landscape, resulting in more M&A opportunities. The risk and compliance-focused solution segments are in growth mode, raising crazy rounds by leading VCs.
There are five major shifts from 2021 to 2022.
1. We introduced one new segment: “eID, Civil IDs, and Identity Networks,” which replaced the self-sovereign identity segment on the landscape. While we had a difficult time landing on a singular term, we expect this segment to have the most change over the next 24 to 36 months as product features become more well-defined and companies in this segment mature. While we will continue to track SSI companies internally, we believe that the product features that define these companies are less unique, especially with the commercial adoption of W3C DID standards by companies across the landscape.
2. KYB and KYC split into two separate segments: “Business and Entity Verification” and “Identity Verification”. Based on the product features, we combined features of the previously defined “Identity Verification and Document Verification” segment into the newly minted Identity Verification segment and split out Document Verification into a new segment. This shift was driven by the demand for solution providers to specialize in the different operational steps at account opening - data collection, document capture, and biometric checks.
3. Behavioral biometrics is no longer its own solution segment. While there are so many great behavioral biometrics-focused companies out there, we found it difficult to split the hairs enough when it came down to product feature fit. The product features previously aligned to behavioral biometrics have been placed into solution segments: “Biometrics”, “Authentication”, and “Fraud Detection and Prevention"
4. A small but mighty shift - we removed the “alt” in front of credit and financial identity to acknowledge that there is less of a difference between traditional and alternative data for credit decisioning and analytics. Subsequently, we migrated credit bureaus to the credit and financial identity segment; leaving data aggregators as their own distinct segment.
5. We also updated several solution segment titles to align more closely with market-defined terms.
Several solution segments dropped completely this year, including both of the healthcare-related segments - EMPI and EMR. While these segments have a slew of healthcare-specific digital identity providers, we found it difficult to differentiate their product features from the product features mapped within other solution segments on the landscape. We expect to see these back in the coming years as healthcare is one of the next clear battleground areas for the digital identity industry
While the Landscape is a living framework that is never complete, we hope that you find it helpful when building your strategy. We will be producing several videos and blogs throughout the year breaking down the market shifts as they happen. Sign up for our newsletter to get updates on the Landscape, our research, events, and everything else at Liminal.
If you have any questions or would like to learn more about how we can help your business, please feel free to reach out through our contact form on our website liminal.co.