Tokenization Market - Snapshot
Tokenization is a data security system which converts sensitive data into a unique ID, referred to as token, to avoid unauthorized access to sensitive information. This process then preserves all the information in a format that allows the information’s security not to be compromised. Tokenization is beneficial for enterprises as it makes it difficult for individuals to hack the system or breach security, to gain access to user data. The advantages of tokenization include the ability to secure sensitive data, reduced data loss, reduced payment card industry data security standard (PCI-DSS) compliance scope, compatibility with other technologies, and overall internal protection. The market for tokenization is forecasted to grow to US$ 6,901.1 Mn by 2026, recording a CAGR of 18.6%.
The major factor responsible for growth of the tokenization market is rising data security concerns in all the data sensitive companies around the world. The tokenization market has experienced considerable growth due to large number of financial firms opting for increasing security in payment processing systems. With increasing credit card fraudulent activities, there is a rise in demand for payment security. Tokenization is often used for credit card processing. The payment card industry (PCI) council describes tokenization as a method in which the primary account number (PAN) is substituted with a surrogate/alternate value called a token.
The tokenization market is driven by the increase in cyberattacks and data breaches. This in turn is boosting the tokenization sector globally. For instance, in May 2017, cyberattacks by the WannaCry ransomware struck several banks, financial institutions, and hospitals. More than 200,000 computers around the world were hacked due to these attacks. Many such cyberattacks have raised concerns about data security. Moreover, they have boosted the demand for security solutions (such as tokenization) even in small and medium enterprises (SMEs). The global tokenization market is anticipated to grow significantly during the forecast period, attributed to rapidly growing demand for market surveillance.
However, high cost of implementation and upgrade of hardware required for tokenization is expected to be one of the major restraints pulling back the market growth. The cost of hardware (storage and security), software (synchronization & replication), and technical support required to maintain in-house tokenization is a major concern for organizations, particularly small- and medium-sized organizations and enterprises.
The tokenization market is segmented on the basis of components, solution, enterprise size, and end-use. Based on components, the market has been segmented into hardware, software (on- premise, cloud) and services (managed/outsourced services, professional services). Based on solution, the market has been segmented into payment security, customer data management, compliance & policy management, omni-channel management, and encryption. Payment security solution held the major share in 2016 in the overall tokenization market. However, compliance & policy management, and omni-channel management are expected to display comparatively fast growth during the forecast period. On the basis of enterprise size, the market has been divided as small & medium enterprise and large enterprise. In terms of end-use, the market has been bifurcated into BFSI, retail & consumer goods, government, education, military & defense, automotive, IT & telecom, energy & utilities, manufacturing, and others (hospitality & transportation).
From a geographical standpoint, North America is expected to hold a major share in the tokenization market. Growth in this region is attributed to strong adoption and penetration of tokenization software, hardware and services, as well as considerable application of tokenization in different end-user segments across the region. Asia Pacific region is expected to witness lucrative growth due to rising adoption of such software in India, Japan, Philippines, and Singapore. Furthermore, the markets in Middle East & Africa (MEA) and South America are also expected to grow significantly during the forecast period.
Attracted by this fast technological advancements and rising spending on cybersecurity, many players are driven to develop comprehensive security suites comprised of hardware (HSM), and software. Some of the key players profiled in the tokenization market report include Gemalto NV, Futurex, Thales e-Security, Inc., CipherCloud, Inc., Symantec Corporation, Hewlett Packard Enterprise Development L.P., Protegrity USA, Inc., TokenEx, First Data Corporation, and CyberSource Corporation
Tokenization Market: Overview
The tokenization market report provides analysis for the period 2016 – 2026, wherein the period from 2018 to 2026 is the forecast period and 2017 is the base year. The report covers all the major trends and technologies playing an influential role in the market’s growth over the forecast period. It also highlights the drivers, restraints, and opportunities for the analysis of market growth during the said period. The study provides a complete perspective on the evolution of the global tokenization market throughout the above mentioned forecast period in terms of revenue (US$ Mn).
The market overview section of the report demonstrates market dynamics such as the drivers, restraints, and opportunities that influence the current nature and future status of this market, key indicators, adoption analysis (by application), and trends of the market. Further, key market indicators included in the report highlight the factors which are capable of changing the market scenario. These indicators are expected to define the market position during the forecast period and provide an overview about the global tokenization market. A market attractiveness analysis has also been provided for every segment in the report, in order to provide a thorough understanding of the overall scenario in the tokenization market. The report also provides an overview of various strategies adopted by key players in the market.
Global Tokenization Market: Scope of the Report
The tokenization market has been segmented based on components, solution, enterprise size, and end-use. Based on components, the market has been segmented into hardware, software (on- premise, cloud) and services (managed/outsourced services, professional services). Based on solution, the market is segmented into payment security, customer data management, compliance & policy management, and encryption. On the basis of enterprise size, the market has been divided as small & medium enterprise and large enterprise. Based on end-use, the market has been bifurcated into BFSI, retail & consumer goods, government, education, military & defense, automotive, IT & telecom, energy & utilities, manufacturing, and others (hospitality & transportation). The report provides in-depth segment analysis of the global tokenization market, thereby providing valuable insights at the macro as well as micro levels.
The report also highlights the competitive landscape of the global tokenization market, positioning all the major players according to their presence in different regions of the world and recent key developments initiated by them in the market. The comprehensive tokenization market estimates are the result of our in-depth secondary research, primary interviews, and in-house expert panel reviews. These market estimates have been analyzed by taking into account the impact of different political, social, economic, and technological factors along with the current market dynamics affecting the growth of the tokenization market.
The report provides all the essential information required to understand the key developments in the tokenization market, and growth trends of each segment and region. It also includes strategies, financial information, and developments under the company profile section. The report provides insights related to trends and their impact on the market. Furthermore, Porter’s Five Forces analysis explains the five forces, namely buyers bargaining power, suppliers bargaining power, threat of new entrants, threat of substitutes, and degree of competition in the tokenization market. The report also provides a comprehensive ecosystem analysis for the tokenization market. It explains the various participants including software & hardware vendors and system integrators of the ecosystem in the market.
Global Tokenization Market: Research Methodology
The research methodology is a perfect combination of primary research, secondary research, and expert panel reviews. Secondary research sources such as annual reports, company websites, broker reports, financial reports, SEC filings and investor presentations, national government documents, internal and external proprietary databases, statistical databases, relevant patent and regulatory databases, market reports, government publications, statistical databases, World Bank database, and industry white papers are usually referred.
Primary research involves telephonic interviews, e-mail interactions, and face-to-face interviews for detailed and unbiased reviews on the tokenization market, across geographies. Primary interviews are usually conducted on an ongoing basis with industry experts and participants in order to get latest market insights and validate the existing data and analysis. Primary interviews offer firsthand information on important factors such as market trends, market size, competitive landscape, growth trends, and outlook, etc. These factors help to validate and strengthen secondary research findings and also help to develop the analysis team’s expertise and market understanding. Moreover, the data collected and analyzed from secondary and primary research is again discussed and examined by our expert panel.
Global Tokenization Market: Competitive Dynamics
The research study includes profiles of leading companies operating in the global tokenization market. Some of the key players profiled in the tokenization market include Gemalto NV, Futurex, Thales e-Security, Inc., CipherCloud, Inc., Symantec Corporation, Hewlett Packard Enterprise Development L.P., Protegrity USA, Inc., TokenEx, First Data Corporation, and CyberSource Corporation.
The tokenization market has been segmented as below:
Market Segmentation: Global Tokenization Market
- Payment Security
- Customer Data Management
- Compliance & Policy Management
By Enterprise Size
- Small & Medium Enterprise
- Large Enterprise
- Retail & consumer Goods
- Military & Defense
- IT & Telecom
- Energy & Utilities
- Others (Hospitality & Transportation)
In addition, the report provides analysis of the tokenization market with respect to the following geographic segments:
- North America
- The U.S.
- Rest of North America
- Rest of Europe
- Asia Pacific (APAC)
- Rest of Asia Pacific
- Middle East & Africa (MEA)
- South Africa
- Rest of MEA
- South America
- Rest of South America