One-time password (OTP) security vendors are to increase the variety of their solutions as they try to keep pace with the changing nature of security threats, according to a Frost & Sullivan report.
The firm's latest analysis of the OTP market found revenues of $825m in 2012, which it predicts to reach $1.18bn by 2017 at a compound annual growth rate of 7.5%.
Global programme director Jean-Noel Georges claimed that OTP vendors are set to expand their portfolios to include hardware, software, mobile, desktop and USB to allow IT administrators to offer OTP services to more employees.
"In addition, some vendors enable organisations to host their authentication platforms in-house or as authentication as a service (AaaS). This type of flexibility provides organisations with greater transparency," he added.
The report said that 94 million records of personal information have been lost since 2009 in America, 81 million of these down to the loss or theft of mobile devices.
Frost & Sullivan predicts that the growing complexity of security threats and the proliferation of mobile devices will spur further expansion from OTP vendors into areas like SIM verification.
They will also try to change the perception of their solutions as complex by introducing two-factor authentication technology and educating company decision makers of the benefits of software-based authentication as compared to single-factor authentication.
"Competition and market maturity have made digital identification deployment both affordable and faster," said Georges. "To thrive in this dynamic environment, OTP vendors should accelerate their progress toward this technology in the next two to three years."