Video: Watch Juniper Research and Thales discuss the future of personal identity

The digital identity market is on the cusp of a huge transformation. According to a study by Juniper Research, the value of the sector will grow from $51 billion in 2025 to $80 billion in 2030. That’s a 56 percent spike in just five years.

It’s easy to explain the boom. As people and businesses move online, they demand identity services that are simultaneously secure and user friendly. Existing processes that rely on scanned passport photos, passwords and memorable dates fail on both counts. Fraudsters bypass them with ease. Consumers find them frustrating.

Now, an alternative approach is gaining momentum – a model based on storing secure identity credentials in digital ID wallets.

These documents (identity card, passport, driving licence, professional qualifications etc) take the form of encrypted verifiable credentials issued by governments and trusted organisations (banks, universities etc). When asked to prove his or her identity, the wallet owner simply presents the specified credential. The system is both secure and user friendly. It’s also ‘self-sovereign’ giving citizens much more control over how they share their data and who with.

Governments, financial institutions and enterprises increasingly see digital ID wallets as the foundation for reusable identity, secure onboarding, cross-border transactions and more.

Already, digital ID schemes are rolling out all over the world. Examples include Estonia’s Electronic Identity eID, Australia’s Digital ID app and many more. Meanwhile, in the US, 21 states now let citizens use an app-based mobile driver’s licence to identify themselves at airports and federal agencies.

Europe will embrace the model over the next 12 months with the launch of the EU Digital Identity Wallet (EUDI). The EU has been testing the system – and developing a harmonised approach to the tech standards underpinning the wallet – since 2024. Each EU member state must offer at least one version of the wallet by the end of 2026.

Juniper Research expects the EUDI to “have a transformative effect on identity in the region” and adds that “focusing on self-sovereign principles, which give citizens control of their own data, will go a long way in improving support.”

The world will be scrutinising the EU project carefully. However, for all the excitement around this bold new approach to personal identity, challenges remain. Thales is one of the stakeholders racing to overcome the three main obstacles: interoperability, regulation and security. The company is well-placed to lead the mission. Juniper Research just ranked Thales as #1 in Digital Identity in its competitive leaderboard.

In a video interview Nick Maynard, VP of Fintech & Digital ID Market Research at Juniper Research and Guillaume Lefevre, VP of Civil Identity at Thales, shared their thoughts on the big talking points in the digital identity space. Here are some highlights of their conversation:

The challenge of interoperability

Building any new ecosystem raises a “chicken-and-egg” dilemma. This is true in digital ID wallets. Citizens are more likely to adopt them once widespread acceptance is in place, but organisations are reluctant to invest in verification infrastructure until citizen adoption reaches critical mass. Interoperable standards are therefore key.

Guillaume Lefevre: “Fragmentation exists because numerous private and public actors issue digital identities or digital wallets, yet these schemes do not work together. This creates friction for users and drives down adoption.
There is a clear need for greater interoperability, where stakeholders collaborate to define and implement international standards. eIDAS 2 in Europe is a strong example of regulation that has driven alignment between stakeholders.”

Nick Maynard: “We’re also seeing interoperability being explored in the form of digital travel credentials… it will be a major future trend within interoperability and identity. However, this is something that is going to take a while to scale up. It will take a long time for all the different partners that need to accept this to do so.”
 

Building in cybersecurity across the ecosystem

Cybersecurity is a critical challenge. Ensuring protection across the entire infrastructure – from mobile devices and wallets to cloud services and back-end systems – is essential.

Guillaume Lefevre: “As more personal and sensitive data is stored and exchanged online, digital identity systems become attractive targets for cyber attacks. Ensuring protection across the entire infrastructure, from mobile devices and wallets to cloud services and backend systems, is essential to safeguarding user information and maintaining trust. Robust security measures, continuous monitoring, and proactive threat mitigation are necessary to defend against increasingly sophisticated attacks. Ultimately, cyber resilience must be prioritised throughout the digital identity value chain to prevent data breaches and maintain the integrity of digital services.

At Thales, we have a maximalist approach to cybersecurity — from the handset through the infrastructure and across the entire lifecycle of a digital identity, from onboarding to everyday use. Security and interoperability are at the heart of everything we do. For example, we currently support more than 20 digital identity programmes worldwide, working with public administrations, banks, telecom operators, and airports in their digital transformation.”

The power of hybrid physical/digital credentials

Hybrid credentials, where digital identity and physical identity are used in a hybridised manner, are important as they boost convenience and security. When combined, they add extra value and open the door to new use cases. They also allow governments to leverage some of the physical identity infrastructure they’ve already built.

Nick Maynard: “The hybridisation of identity has a few different advantages. Where there has been public scepticism around digital identity, having both a physical and a digital identity means that you’re not forcing a mandatory requirement on people. Thales is strong in this space. It has a wide range of deployment methods and credential types in both physical and digital identity deployments. We have also identified a key new trend: hybrid credentials. Thales’ leadership here is noteworthy too.”

Guillaume Lefevre: “Being a leader in both physical ID document issuance and digital ID credentials unlocks unique synergies and security advantages. Physical documents equipped with secure chips and NFC technology are ideal companions for mobile wallets. They enable secure and seamless remote onboarding. A physical ID read via NFC can verify identity to the highest eIDAS standards.

“Conversely, digital wallets can serve as valuable companions to physical cards. They support updates to the card’s software post-issuance through remote management. This dual expertise supports end-to-end trust, flexibility and a superior user experience across both physical and digital identity ecosystems. Today, one in three ID documents is produced by Thales. Millions of citizens, customers and employees across the world are equipped with a digital ID powered by Thales.”

The impact of regulation

Nick Maynard: “One of the major trends we’re seeing is the introduction of regulation that’s driving digital identity forward, whether this is the eIDAS 2 within the EU, or the Online Safety Act and the introduction of reusable digital identity identities in the UK market, or NIST in the US. Fundamentally, we expect these regulations to have a major impact on what digital identity means for each country, and it's important to watch for the future of the space.”