The Challenge
With the continuous growth of fraudulent behavior and data breaches, organizations are increasingly focusing on implementing new technologies to verify the identity of their customers while minimizing user friction. An industry-leading behavioral biometrics company that provides customer onboarding and authentication solutions engaged with Liminal to explore growth opportunities to expand its market reach across new use cases and verticals. The company specializes in a specialized class of authentication solutions that incorporate dynamic identifiers based on human behavioral patterns that are kinesthetic (e.g., body movements, posture) or device-based (e.g., keystroke dynamics, touchscreen pressure, cursor movements). Our team was engaged to provide market sizing forecasts and analysis across different verticals, perform competitor benchmarking analysis, and to propose a strategic roadmap outlining inorganic and organic paths to expand its product capabilities.
The Action
In the first three phases of the engagement, Liminal collaborated with our client team to conduct:
Size the market:
Customer onboarding and passive authentication solutions are growing in market opportunity due to increased fraudulent online activity at account opening. Banking has historically been the leading vertical for the adoption of behavioral biometrics due to the compromising nature of fraud vectors such as account takeover (ATO). Behavioral biometrics technologies, however, have applicability across myriad use cases that are subject to sophisticated fraud attacks. Specifically, there is a large opportunity for growth in adjacent market verticals, especially amongst those with growing acceptance of incorporating probabilistic data sets. Based on our analysis, our team provided a detailed analysis of market sizing opportunities across target verticals with CAGR forecasts that outlined industries with the most significant opportunity for expansion.
Market Dynamics & Competitive Benchmarking:
As the market experiences both growth and consolidation, incumbent solution providers and new entrants continue to race towards adopting frictionless authentication solutions that are highly automated, low latency, and that can solve for onboarding across high and medium assurance levels. To provide a comprehensive view of the market dynamics of the existing digital identity landscape, Liminal conducted a detailed assessment of tangential solution segments including future headwinds and tailwinds anticipated to impact an increasingly competitive landscape. Based on the outcomes, we were able to determine competitive penetration by vertical based on technical differentiators and to propose industry use cases that rely on real-time risk scores combined with predefined rule logic to identify and block fraudulent activity.
Evaluated and measure the opportunity across target use cases, geographies, and verticals:
To help our client better assess their organization’s competitive positioning, our team proposed technological features to help with expansion across new use cases and verticals. Liminal performed a deep-dive assessment of our client’s existing business model, cost drivers, and operational improvement potential. Liminal provided our client with a customized analysis of the serviceable obtainable market (SOM), accounting for critical drivers like digitalization, smartphone adoption, online transactions, and rising demand for onboarding solutions that are high assurance and low friction. Included was an evaluation of barriers to entry and disruptive market risks including the introduction of integrated digital identity services by institutional market players and evolving regulations, including Payment Services Directive 2 (PSD2) and the General Data Protection Regulation (GDPR). The deliverables included an assessment of the viability of market entry across each target use case and the revenue potential for each product segment our client can be expected to capture over a five-year growth horizon.
The Outcome
As a result of our engagement, our team was able to collaborate with our client further on future product positioning, outlining the risks, costs, and considerations of build versus buy decisioning. As a team, we outlined several future paths for consideration including global product expansion, entrance into new industry verticals, data partnerships to support organic growth, and M&A considerations. One of our direct contributions was outlining the opportunity for our client across mule tracking and age verification. Since our engagement, our client’s team has successfully deployed two new, innovative products to detect mule activity and detect fraud across more vulnerable demographics.
