Category: AI

Biometric Update reported on nearly 50 acquisitions in total during calendar 2025, about 10 more than in 2024, which had a handful more than 2023.

There was “a significant amount of consolidation” among digital identity technology suppliers in the assessment of Goode Intelligence CEO and Chief Analyst Alan Goode. He told Biometric Update in an interview that technology providers in current identity verification stacks are under pressure to remake their offerings for the inflection point that verifiable credentials are about to create, in one of several market conditions encouraging deal-making.

The crop of consolidations deals ranged from Incode’s acquisition of AuthenticID, largely to add document verification capabilities to its digital identity platform, to DNP adding Laxton’s international market reach and experience to its identity management core and AI parking lot operator Metropolis bringing Oosto’s facial recognition in-house.

Liminal CIO Filip Verley tells Biometric Update he sees the market as likely to remain active in the first half of 2026, due to the same forces that shaped the past year.

Fraud has overwhelmed organizations of all kinds, and Verley emphasizes the degree to which this has pulled enterprise teams and market players in adjacent areas together.

AI has contributed to this wave of fraud in several important ways. The barrier to entry has been lowered, and forgeries are now scalable in a way cybercriminals could only have dreamed of just a few years ago. The proliferation of generative AI tools has also changed the state of the art in biometric liveness detection, with injection attack detection (IAD) now table stakes for secure remote user onboarding the way presentation attack detection (PAD) has been for the last several years.

And even then, more signals are needed to have a significant impact on mountainous fraud rates.

These intertwined developments are occurring right at the same time as many market players have reached natural decision-making junctures.

Interest rates are up, identity technology providers have tested their products in the new AI threat environment and investors are increasingly looking to cash out.

Goode’s analysis of industry consolidation at the end of last year highlighted the role of digital identity and biometrics in digital transformation, such as in the aviation industry.

IN Groupe’s acquisition of Idemia Smart Identity had already been announced, as had LexisNexis Risk Solutions’ deal for IDVerse. But 2025 had plenty of consolidation and acquisition activity in store for biometrics and digital ID.

Cycles align

Corporate strategy tends to work in two to three year cycles, Goode points out.

During that process, biometrics and digital identity providers that enter the M&A market do so based on “what the product is going to be like in three years time,” he says. “It’s quite a significant amount of investment time, considering the whole process of understanding what that product is, then who the match is, and the kind of companies that can boost or add to that particular product, with an eye on what they believe the future will entail.”

The funding boom that accompanied the historically low interest rates and unique market pressures of the COVID pandemic allowed businesses to pursue the capabilities they would need to fight for market share, whether by investing in research and development to build it or buying it. Each did so based on its answer to: “What does digital identity look like in three years time?”

The timing lines up with the expectations of investors who raced into the space during the pandemic, Verley notes.

“Guess what? Most investors are looking for a return in three, four, five years.”

A lot of money was invested during the low-interest period, when rapid digitization created growth curves shaped like hockey sticks. But the curve has plateaued somewhat, Verley says, putting pressure on the massive valuations of the pandemic era.

Those anxious for a return on their investments may be especially motivated to act if the tech market sours in other areas, as well, Goode warns.

At the same time, he says, “the move from documents and card to digital assets and digital credentials is shaking this market up.”

At the beginning of the identity lifecycle, the traditional security printers are looking at ways to extend their role in the ecosystem, Goode says. They have been looking at acquisition as a way to build capabilities that, even if they are “not necessarily full stack,” provide an element to “get them over the line for an individual tender.”

That shift is also seen in areas like travel where digital and physical credentials are coming together as the aviation industry looks for ways to automate processes.

Overwhelming fraud

Fraud was “the number one topic in 2025” for businesses and public sector organizations, Verley says, driving a convergence within them. “Cybersecurity is now very interested in identity, identity is very interested in fraud, fraud is interested in identity and cybersecurity,” he says.

In some cases, each of these teams has already purchased solutions, so the ability to coordinate signals between them is increasingly important.

Verley noticed at a recent ACAMS (Association of Certified Anti-Money Laundering Specialists) event that every compliance company also billed itself as a fraud prevention provider.

“That is the number one pain point for buyers” across industries, according to Verley.

AI has made fakes too good and too easy to make, whether for biometrics or ID document spoofs. This is buoying injection attack detection (IAD), Goode notes, but relying parties are still having trouble on both the fraud prevention and customer friction sides of the ledger, Verley says.

Goode noted in last year’s wrap-up that the process of migrating to digital identity documents is well underway, and this progress is reflected in the timing of Signicat’s acquisition of Inverid, in one example.

Reducing fraud is part of the motivation behind the EU Digital Identity Wallet, which launches in the year ahead. By tying digital IDs to government-issued biometric documents with electronic chips.

“That’s going to mean a huge uptick in onboarding people to issue them these new credentials that are going to be big in identity verification, and that’s going to be the best way to do that,” Goode says.

At the same time, businesses that had no choice but to pay for identity services during pandemic now have more choice, Verley says. So providers are emphasizing fraud protection to justify the value of their products.

Several of the year’s other digital identity acquisitions could also be characterized as providers with traction adding fraud-prevention capabilities.

“We’re seeing that consolidation where vendors, the ones that are strong, are now picking up other vendors, or consolidating these vendors,” Verley says. “Instead of building, they’re buying. And they’re buying technology that can solve that next use case that it right next to” the one they’ve already solved.

Ping Identity’s acquisition of Keyless is an example of this kind of transaction, adding attractive privacy protection capabilities to a successful platform.

AI for everything

This is a much more compelling pitch, he points out, in the age of AI.

The threat landscape has changed just as AI agents join the ecosystem, and practically every business attempts to find ways to put them to work.

From 2023 to last quarter, use of AI in press releases and fundraising materials accelerated from 152 mentions in Q4 2023 to 2,571 in Q3 2025, according to Liminal stats.

With the ease of AI-powered fakes and the volume of real data available to criminals, IAD is becoming table stakes, and Goode points to it as another potential area for consolidation, as identity verification, deepfake detection and IAD “become more tightly integrated.

Businesses want to combines these capabilities with systems that can pull together and interpret data from additional sources, Verley suggests, putting further pressure on market players to consolidate their strengths.

“You can’t just rely on your document scanning or your selfie,” he says. “You’ve got to figure out what are some of these probabilistic signals around it, behavioral intelligence, device intelligence, all of these signals that build a complete picture.”

Uncertainty is a central feature of the AI market landscape, and Goode notes the possibility that if predictions of the AI market popping like a bubble in 2026 come true, restricted credit availability “could put a damper on acquisitions.”

But one use case for AI, a deluge of market reports show, is here to stay.

“More than 90 percent of buyers are aware of gen AI, deepfakes and synthetic fraud, only about 20 percent feel ready to tackle it,” Verley says. “It is the biggest awareness to preparedness gap we’ve ever measured over the five years we’ve been running the surveys. You’re not alone knowing it’s a problem, and you’re not alone not knowing how to fully solve it.”

In some market areas, like border control, “the majority of the market is still document based, and will remain so for a significant amount of time,” Goode says, which means the transition to digital credentials will continue to heavily influence market consolidation for the next couple of years.

“We’re seeing a lot of merger and acquisition deals across cyber and fraud that are happening in this space,” Verley says. “And I’m assuming we’re going to see a ton more, maybe in Q1, Q2; I think we’re going to see a lot of activity.”