What to Look for in Authentication Tools When Developing a Project in 2025

Digital identity has moved well past the login screen. Consumers now expect to register, authenticate across devices, recover access, and authorize transactions with minimal friction while organizations must defend every one of those moments against phishing, account takeover, and increasingly automated attacks.

That tension is what makes consumer identity and access management (CIAM) distinct from workforce IAM, which governs employee access one of the more consequential categories in enterprise security right now. CIAM brings registration, authentication, authorization, consent, and account recovery into a single coordinated layer built around external users rather than internal ones.

The Consumer Identity and Access Management (IAM) Market reflects that shift. Next Move Strategy Consulting estimates the global market is projects it will reach USD 38.65 billion by 2030, a CAGR of 14.5% from 2024–2030.

Consumer IAM Market at a Glance (2023–2030)

Section summary: CIAM has expanded from a login-enablement feature into a broader digital-trust layer, and the market's growth reflects that shift.

• Global consumer IAM market projected to more than double, 2023–2030

• North America leads on adoption; Asia-Pacific leads on growth rate

• The category increasingly spans authentication, fraud prevention, and consent management, not just sign-in

Why the Category Is Changing: Security and Experience Are Converging

A highly secure process that creates excessive friction can still cost a business conversions and retention. A convenient login that leaves accounts exposed creates the opposite problem. Modern CIAM platforms have to manage the full identity journey account creation, verification, session management, authorization, recovery, and ongoing risk assessment, making authentication architecture decisions important from the earliest stage of a digital product, not an afterthought bolted on later.

Passkeys have crossed from emerging technology to enterprise default

Passwordless authentication is the clearest evidence of that shift. In July 2026, Microsoft announced that passkeys will become the default authentication method in Microsoft Entra ID, with rollout beginning September 1, 2026, and native SMS/voice authentication fully retired by February 1, 2027. Microsoft tied the move directly to AI-enabled phishing: its threat intelligence team found AI-generated phishing campaigns achieving click-through rates as high as 54%, compared with roughly 12% for traditional phishing attempts.

AI-Enabled Phishing vs. Traditional Phishing: Click-Through Rate Comparison

This follows a broader passkey inflection point: the FIDO Alliance's State of Passkeys 2026 report (based on 11,000 consumers and 1,400 enterprise decision-makers across ten countries) found that consumer awareness of passkeys reached 90%, with 75% of consumers having enabled a passkey on at least one account, and 68% of organizations deploying or piloting passkeys for employee sign-in.

Passwordless Adoption Signals: Key 2026 Data Points

For consumer-facing businesses, the implication is direct: identity systems need to reduce dependence on credentials that can be phished or socially engineered, without adding friction to the sign-in experience.

Fraud prevention is merging into the identity layer

Authentication and fraud prevention are increasingly the same problem. A system can validate a credential correctly and still let a compromised account, an unusual device, or an anomalous login pattern through. That's pushing CIAM platforms toward layered models: strong authentication at entry, contextual risk signals during the session, and step-up verification when behavior turns suspicious  a shift reinforced by IBM's 2026 Cost of a Data Breach Report, which found that AI-enabled breaches now cost organizations roughly $6 million on average, about $1 million above the global norm, while organizations using AI and automation in security operations cut breach costs by nearly $2 million.

Section summary: Passwordless authentication and fraud-aware, risk-based access are becoming baseline CIAM expectations rather than premium features.

• Passkeys are moving from opt-in to enterprise default, led by Microsoft's Entra ID transition

• AI is reshaping both sides of the equation  scaling phishing attacks and improving breach-cost outcomes for defenders who adopt it

• Authentication and fraud detection are converging into a single, continuous risk layer

Market Size, Segmentation, and Regional Outlook

Next Move Strategy Consulting's analysis puts the global Consumer IAM market at USD 14.96 billion in 2023, reaching USD 38.65 billion by 2030  a 14.5% CAGR. Growth is driven by two forces moving together: rising identity-related breach costs pushing up defensive spending, and the continued shift toward mobile- and cloud-first consumer experiences that require identity systems to work seamlessly across far more touchpoints than before.

The market spans offering (solutions and services), authentication type (MFA, SSO, and passwordless), deployment mode (cloud, on-premises, and SaaS), organization size, and vertical  with BFSI, healthcare, retail & e-commerce, and telecommunications among the largest adopters.

North America currently leads the market, tied to its high concentration of reported breaches and correspondingly high security spend, along with the presence of major vendors headquartered there. Asia-Pacific is the fastest-growing region, driven by rapid e-commerce expansion and rising mobile-device penetration pushing more businesses toward formal identity systems rather than ad-hoc login solutions.

Section summary: The consumer IAM market's growth reflects both defensive spending in response to breach costs and offensive investment in smoother digital experiences.

• BFSI, healthcare, and retail/e-commerce are the largest vertical adopters

• North America leads on adoption; Asia-Pacific leads on growth rate

• Solutions spending is increasingly weighted toward passwordless and risk-based authentication types

AI Agents Are Introducing a New Identity Category

The next phase of CIAM won't involve only human users. AI agents are beginning to act on behalf of consumers searching, comparing, and increasingly completing purchases  which raises question CIAM systems haven't had to answer before: how does a business distinguish a legitimate software agent acting with a customer's authority from an unauthorized automated process?

That question moved from theoretical to concrete on September 10, 2026, when Visa, Mastercard, and Ant International announced a joint initiative  a "Know Your Agent" (KYA) interoperability framework to develop common standards for identifying, verifying, and monitoring AI agents that transact on behalf of consumers. According to CNBC's coverage of the announcement, the framework is designed to let an agent verified with one participating payment provider be recognized across other networks without repeating the process, and to give merchants and payment providers a way to confirm an agent's identity and authorization before a transaction settles. McKinsey projects AI agents could handle $3–5 trillion of global consumer commerce by 2030.

For CIAM, this points toward a new set of questions the identity layer will need to answer: Is this agent authorized to act for the customer? What permissions were granted? What transaction is the agent allowed to complete? Can the organization trace and revoke that authority after the fact? Identity governance is starting to extend beyond human accounts into delegated, non-human identities.

Section summary: Agentic commerce is creating a new identity category that CIAM platforms will need to accommodate alongside traditional consumer authentication.

• Visa, Mastercard, and Ant International are jointly building shared standards to verify AI agents transacting on behalf of consumers

• McKinsey estimates $3–5 trillion in AI-agent-driven commerce by 2030

• CIAM's scope is expanding from "who is the customer" to "is this agent authorized to act for the customer"

Future Outlook

A few forces are likely to keep shaping this market. Passwordless methods will keep gaining share, but full password retirement remains a multi-year process for most organizations given legacy dependencies and account-recovery requirements even Microsoft's aggressive Entra ID timeline runs through February 2027. AI-driven risk analysis assessing device signals, behavioral patterns, and contextual data in real time is becoming a standard CIAM feature rather than a premium add-on, partly in direct response to the rise in AI-enabled attacks. And as agentic commerce standards like the Visa/Mastercard/Ant International framework mature, CIAM platforms will need to extend identity governance to delegated, non-human actors alongside the humans they represent.

For a full breakdown of market sizing, segmentation, and competitive landscape, the Consumer Identity and Access Management (IAM) Market report from Next Move Strategy Consulting offers a detailed forecast through 2030.

For More Information: Download FREE Sample on the Consumer Identity and Access Management (IAM) Market Report

Section summary: The market's direction is fairly clear even where the timeline isn't  identity systems are becoming more automated, more risk-aware, and increasingly extended to non-human actors.

• Passwordless adoption will keep climbing, but hybrid password/passkey environments persist for years

• Real-time, AI-driven risk analysis is becoming a baseline CIAM capability

• Agentic commerce is pushing identity governance beyond human accounts

Conclusion

Consumer identity and access management has moved well past being a back-office security function. It now sits at the intersection of user experience, fraud prevention, and an identity landscape that's expanding to include software agents acting on consumers' behalf. Microsoft's move to default passkeys, the rise of AI-enabled phishing, and the new Visa/Mastercard/Ant International effort to verify AI agents all point the same direction: identity is becoming the place where trust gets established or lost in digital commerce. The consumer IAM market's projected growth through 2030 reflects just how central that question has become.