According to a new market research report published by Credence Research “Tokenization Market (Component- Software (On-premise and Cloud-based), Hardware, Services (Managed Services and Professional Services), (End-user- BFSI, Consumer goods & Retail, Education, Defense, Automotive, IT and Telecom, Healthcare, Energy & Utilities, Manufacturing, Others (Hospitality & Transportation, etc.), Solution- Payment Security, Customer Data Management, Compliance and Encryption) – Growth, Future Prospects and Competitive Analysis, 2019 – 2027”, the overall tokenization market worldwide was valued at US$ 880.9 Mn in 2018 and is set to grow with a CAGR of 18.9% during the forecast period.
Robust need of protecting crucial data information from disclosure, is the major growth driving factor for tokenization market. Replacing data with unique identification symbols which hold all the necessary information for the data is called as tokenization. To protect sensitive data information from fraud, the tokenization system has been used nowadays. Tokenization has various benefits such as gives protection from hackers and thieves, reduced PCI scope, provide online protection, and internal protection among others. Increase of data breach and cyber-attacks worldwide are the other major drivers for the increased demand of tokenization. On account of wide application of tokenization in financial sector, the market is showing huge demand. Therefore, we expect that the tokenization market will show robust growth throughout the forecast period.
Based on application, the tokenization market is led by BFSI (banking, financial services and insurance) segment in 2018. The BFSI segment has around 25% of the revenue share in the same year. While payment at various shopping stores, tokenization exempts merchants to keep client’s data in their systems. Growing cash less transactions worldwide is the major growth factor for the segment. According to World Payments Report (WPR), the cash less transactions volumes are valued at US$ 482.6 Bn in 2016 and growing with around 10% annually. Further, for the security of client’s privileged information banks, financial services and insurance companies are adopting tokenization. As a result, we expect that the BFSI segment will show substantial growth during the forecast period.
Based on the geography, North America was the largest region in 2018 for tokenization market backed by Europe and Asia Pacific. North America has over 35% value contribution in the same year. North America has highest share owing to early adoption and penetration of tokenization system. In North America tokenization is widely being used in various industries such as BFSI, retail, defense, healthcare and others. Strict government regulatory compliance and growth in payment security concerns in the region, are the other major growth factors. Therefore, we expect that the North America will show stagnant growth during throughout the forecast period from 2019-2027.
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