Global Out-of-Band Authentication Market by Authentication Method (SMS-Based Authentication, Phone Call-Based Authentication, Email-Based Authentication, Software Token-Based Authentication, Hardware Token-Based Authentication), by Deployment Mode (Cloud-Based, On-Premises), by End-Use Industry (Banking and Financial Services, Government and Defense, IT and Telecommunication, Healthcare, Retail): Insights & Forecast (2024 – 2030)

As per Intent Market Research, the Out-of-Band Authentication Market was valued at USD 1.7 Billion in 2024-e and will surpass USD 3.2 Billion by 2030; growing at a CAGR of 11.7% during 2025 - 2030.

The Out-of-Band (OOB) Authentication Market has gained significant traction as businesses and individuals seek enhanced security solutions to combat cyber threats, identity theft, and fraud. OOB authentication involves verifying a user’s identity using a second communication channel, ensuring that even if one channel is compromised, the other remains secure. This added layer of security is crucial for industries dealing with sensitive data, including banking, healthcare, and government services. With the growing emphasis on cybersecurity and stricter regulatory requirements, OOB authentication is becoming an essential tool for securing online transactions and digital access.

SMS-Based Authentication Is Largest Authentication Method Owing to Accessibility

SMS-based authentication remains the largest segment in the OOB authentication market due to its widespread accessibility and ease of implementation. This method sends a one-time passcode (OTP) to the user’s mobile phone via text message, which is then used to verify identity during login or transaction processes. The simplicity of SMS authentication, combined with the ubiquity of mobile phones, makes it an ideal solution for businesses looking to deploy secure, yet user-friendly, authentication systems.

Though it has faced some challenges in terms of susceptibility to SIM-swapping attacks, SMS-based authentication is still favored by many organizations due to its low cost and broad adoption across various sectors. Additionally, its integration with multi-factor authentication (MFA) systems further strengthens its position as the leading OOB authentication method.

Cloud-Based Deployment Mode Is Fastest Growing Owing to Scalability and Cost-Effectiveness

The cloud-based deployment mode is the fastest-growing segment in the OOB authentication market, driven by the increasing adoption of cloud computing and the need for scalable, cost-effective security solutions. Cloud-based authentication systems offer several advantages, including remote access, easy integration with existing infrastructure, and the ability to scale as needed. Businesses can easily deploy and manage cloud-based OOB solutions without investing in expensive on-premises hardware, making it an attractive option for organizations of all sizes.

The flexibility and convenience of cloud-based systems, coupled with the growing trend of remote work and digital transformation, have accelerated the demand for cloud-based OOB authentication solutions. This trend is particularly strong in industries such as IT, finance, and healthcare, where securing access to sensitive data and systems is paramount.

Banking and Financial Services Is Largest End-Use Industry Owing to High Security Requirements

Banking and financial services dominate the OOB authentication market as the need for secure digital transactions continues to rise. Financial institutions are prime targets for cybercriminals, making robust authentication methods essential for protecting sensitive customer data and preventing unauthorized access to accounts. OOB authentication plays a crucial role in securing online banking, mobile payments, and digital wallets, where the risk of fraud is high.

The growing adoption of online and mobile banking services has further fueled the demand for OOB authentication in this sector. By adding an additional layer of security, banks can ensure that their customers’ transactions and personal information remain protected, thereby enhancing trust and customer satisfaction.

North America Is Largest Region Owing to Advanced Cybersecurity Infrastructure

North America is the largest region in the OOB authentication market, driven by the high adoption of advanced cybersecurity solutions and the presence of numerous key players in the market. The U.S. and Canada are at the forefront of integrating secure authentication technologies, especially in industries such as banking, government, and IT services. The region’s strong regulatory framework for data security, combined with the growing threat of cyberattacks, has led businesses to prioritize OOB authentication as part of their security strategies.

Additionally, the widespread adoption of cloud computing and mobile banking in North America has further fueled the demand for secure authentication methods, reinforcing the region’s position as a leader in the global OOB authentication market.

Competitive Landscape and Key Players

The OOB authentication market is highly competitive, with key players such as RSA Security, Symantec, VASCO Data Security, and Duo Security dominating the space. These companies offer a range of solutions that leverage SMS, phone calls, and software or hardware tokens to ensure secure user authentication. Strategic partnerships, acquisitions, and continuous innovation in authentication technologies are key factors driving the competition in this market.

As businesses continue to prioritize cybersecurity, the OOB authentication market is expected to experience strong growth, with companies focusing on providing more secure, flexible, and user-friendly authentication solutions. With increasing demand for multi-factor authentication and integration with other security technologies, the competitive landscape will continue to evolve, with both established players and new entrants vying for market share.

List of Leading Companies:

• Entrust Corporation
• OneSpan
• Broadcom Inc. (Symantec Corporation)
• RSA Security LLC
• Microsoft Corporation
• Ping Identity Corporation
• Thales Group
• SecureAuth Corporation
• Okta, Inc.
• Micro Focus International plc
• Gemalto (Thales Group)
• Cisco Systems, Inc.
• Authy (Twilio Inc.)
• Duo Security (Cisco)
• BIO-key International, Inc.

Recent Developments:

• Entrust Corporation launched an advanced SMS-based authentication solution with enhanced encryption.
• OneSpan introduced a biometric-enabled out-of-band authentication method for banking clients.
• RSA Security announced the integration of its OOB authentication tools with leading cloud platforms.
• Microsoft Corporation upgraded its Azure Active Directory with new out-of-band authentication features.
• Cisco Systems expanded its Duo Security platform, incorporating AI-driven authentication analysis.

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