The UK's digital identity sector has experienced explosive growth, with revenues projected to reach an estimated £2.027 billion by 2024/2025. A recent report from the Office for Digital Identities and Attributes (OfDIA) highlights the dynamic market, now home to 275 firms - a nine-company increase on last year.
One of the most striking findings is the significant boost in productivity within the sector. Gross Value Added (GVA) has surged by 17% since the previous year, reaching £1.037 billion. This translates to an impressive GVA per employee figure of £107,800 - comparable to that seen in the cybersecurity sector (£116,200) and outpacing the wider digital sector (£89,200) and UK workforce average by approximately 46%. However, this increased productivity has come at a cost: despite a rise in overall revenue, the number of full-time equivalent (FTE) employees has dropped by 6%, falling to 9,624. This reduction is largely due to market consolidation, increased integration of Artificial Intelligence (AI), and broader pressures on headcount within the technology sector.
Consumer attitudes towards digital identity services are shifting rapidly. A survey of over 5,600 UK residents conducted by Survation in November 2025 found that a staggering 81% now have some level of understanding of digital identity - an increase from 71% at baseline. Consequently, the proportion of individuals with limited or no understanding has decreased significantly from 29% to 19%. Moreover, 77% of respondents reported using a digital identity service for at least one purpose, with common applications including insurance, credit applications, and opening bank accounts.
Among those who remain non-users (23%), the primary reasons cited were a preference for physical identification (29%) and not having encountered a situation requiring digital identity proof (29%). Access barriers, such as the unavailability of a digital option (15%) or a lack of necessary documents (13%), also played a role. The report indicates that while financial and professional services remain the core customer base for digital identity providers, accounting for 90% of firms, the healthcare and public services sectors have shown significant growth in adoption, rising from 58% to 72%.
The increasing adoption and understanding of digital identity services present both opportunities and challenges for UK businesses and consumers. For businesses, streamlined digital identity verification can enhance security, reduce fraud, and improve customer onboarding processes. However, ensuring data privacy and compliance with evolving regulations, such as the UK ICO's guidelines and the upcoming EU AI Act, remains crucial. For consumers, the convenience of digital identity is growing, but addressing concerns around data security and access will be essential to unlock its full potential.