In 2025, the digital identity technology sector experienced a surge in consolidation, with nearly 50 acquisitions reported, marking a significant increase from the prior year’s activity. This trend, highlighted by Alan Goode, CEO of Goode Intelligence, signals a pivotal moment as companies adapt to impending shifts driven by verifiable credentials. Goode stated in an interview that the current market landscape is pushing identity verification providers to evolve their offerings amid rising fraud and the rapid advancement of artificial intelligence.
The acquisitions varied widely, from Incode‘s purchase of AuthenticID to enhance its document verification features, to DNP acquiring Laxton to expand its international reach in identity management. Simultaneously, Metropolis integrated Oosto‘s facial recognition technology into its operations. Liminal CIO Filip Verley expects continued activity in the first half of 2026 as these market pressures persist.
Fraud has become a critical concern for various organizations, driving collaboration between enterprise teams and market players in adjacent sectors. Verley emphasized that the rise of AI has lowered the barriers to entry for cybercriminals, enabling scalable forgeries that were previously unimaginable. The emergence of generative AI tools has also transformed biometric liveness detection, making injection attack detection (IAD) essential for secure remote user onboarding, a standard that has replaced the significance of presentation attack detection (PAD).
As organizations grapple with high rates of fraud, it has become increasingly clear that more signals are necessary to combat these challenges effectively. Goode’s analysis from the end of last year noted the importance of digital identity and biometrics in industries undergoing digital transformation, particularly aviation.
In 2025, notable transactions included IN Groupe‘s acquisition of Idemia Smart Identity and LexisNexis Risk Solutions‘ purchase of IDVerse. These moves were part of a broader trend of consolidation in digital ID and biometrics, raising questions about corporate strategies and investment cycles. Goode pointed out that the M&A landscape is shaped by long-term expectations, as companies strategize based on projections of what digital identity will look like in three years.
The period of low interest rates and the unique conditions created by the COVID-19 pandemic fostered a funding boom, allowing many businesses to acquire the technologies necessary to secure their market positions. As these businesses assess their investments, many are now under pressure to deliver returns, particularly as valuations from the pandemic era face challenges in a more stabilized market.
The push towards digital assets and credentials is reshaping the identity verification landscape, leading traditional security printer companies to explore acquisitions to enhance their roles in the evolving ecosystem. This shift has been particularly evident in the travel sector, where a convergence of digital and physical credentials is sought to streamline processes.
Fraud emerged as the predominant theme in 2025 for both businesses and public sector organizations, according to Verley. The interplay between cybersecurity, identity verification, and fraud prevention has intensified, with each sector showing increasing interest in solutions that address overlapping concerns. This convergence highlights a broader trend where compliance companies are positioning themselves as fraud prevention providers, responding to the central pain point identified by buyers across industries.
The sophistication of AI-generated fakes poses significant challenges for identity verification. While IAD has gained traction as a result, companies are still struggling to balance fraud prevention with customer experience. The transition to digital identity documents is underway, exemplified by Signicat‘s acquisition of Inverid, which aims to reduce fraud as the European Union prepares to launch its Digital Identity Wallet, linking digital IDs to government-issued biometric documents.
As businesses that previously depended on identity services during the pandemic now have more options, providers are emphasizing fraud protection to demonstrate the value of their solutions. The year’s acquisitions often reflect this trend, as established players acquire companies with complementary fraud-prevention capabilities, further consolidating the market. For instance, Ping Identity‘s acquisition of Keyless integrates privacy protection features into its platform.
The accelerated use of AI has significantly altered the market landscape, with mentions of AI in press releases skyrocketing from 152 in Q4 2023 to 2,571 in Q3 2025, according to Liminal’s statistics. The necessity for comprehensive solutions that merge identity verification, deepfake detection, and IAD is becoming increasingly evident. As companies strive to interpret data from diverse sources, the pressure to consolidate strengths is likely to drive further M&A activity.
Despite the potential for a downturn in the AI market, with predictions of a bubble burst in 2026, the need for effective strategies against synthetic fraud remains critical. Verley noted that while awareness of generative AI and deepfake threats is high, only about 20 percent of buyers feel prepared to address these challenges. The majority of the market, particularly in areas like border control, still relies heavily on traditional document-based systems, indicating that the transition to digital credentials will continue to influence market dynamics for years to come. As Verley anticipates ongoing M&A activity in early 2026, the landscape remains poised for further evolution.
For more information on digital identity trends and acquisitions, visit Goode Intelligence, Liminal, and Incode.
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