As credit and debit cards are increasingly used, more people seek ways to keep their identity to themselves.
Los Angeles, CA (PRWEB) November 12, 2012
The Identity Theft Protection Services industry has experienced slow growth over the past five years, growing at an annual average of 2.6%. This includes an expected 4.6% revenue expansion in 2012 to reach $3.7 billion. The industry remained relatively resilient in the face of the economic downturn, with revenue falling only slightly in 2009 despite significant drops in consumer and business income. Since then, the slowly recovering economy has helped the industry grow due to increased demand from consumers and businesses.
Rising demand has mostly been the result of the proliferation of the internet into nearly all financial activities. Most point-of-sale systems quickly accept credit or debit cards for payment, which also makes them an easy target for identity fraud. In addition, the rise of internet banking has made it easy for a person's entire finances to come under threat as the result of compromised passwords. Finally, the use of mobile phones in both financial account management and, increasingly, financial transactions has created another target for identity thieves. Due to all these factors, demand for identity protection has steadily increased over the past five years. Also bolstering demand, a number of high-profile security breaches compromised the financial information of millions of consumers, namely the 2011 breach of the PlayStation Network and the 2012 breaches of Zappos and LinkedIn. “These breaches demonstrate to consumers the need for identity protection services and, as a result, demand has increased,” says IBISWorld industry analyst Dale Schmidt. The slow and steady growth is expected to continue over the five years to 2017. This growth will come on the back of the continued recovery of consumer income and business spending, which will lead them both to invest more in identity theft protection services, and the further growth of online financial activities. Increased regulation poses a threat to long-term growth of the industry, as industry firms are frequently on the receiving end of complaints regarding misleading advertising and contract terms. Regulatory intervention in this regard will likely lead to depressed revenue for industry firms.
The Identity Theft Protection Services industry has a low level of market share concentration. In 2012, the four largest firms in the industry account for less than 20.0% of industry revenue. Due to the relatively low barriers to entry in this industry, new entrants are able to offer similar products to major players. However, as more firms enter the industry, firms are becoming less able to distinguish themselves from one another. According to Schmidt, the breadth of services offered between large and small industry firms are becoming more similar, deterring some companies without brand recognition to enter the industry. As a result, over the past five years, the number of firms in the industry declined at an average annual rate of 0.5% to 79 companies in 2012. For more information, visit IBISWorld’s Identity Theft Protection Services in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in this industry primarily provide software and services aimed at reducing the risk of identity theft from online or electronic media. Firms frequently use monitoring software to track unauthorized use of credit and other personal information.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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