Global spending by businesses on Identity and Access Management (IAM) services is projected to increase by 55 per cent to $40.5 billion in 2031, from $26.2 billion in 2026, as the growing use of artificial intelligence creates new security risks for organisations.
According to a new study by Juniper Research, the expansion of AI across business operations is changing how organisations manage digital identities and control access to corporate systems, increasing demand for more advanced identity management solutions.
The research found that AI adoption is influencing the IAM market in two ways. While the technology is making identity verification and access control systems more sophisticated through continuous monitoring and adaptive authentication, the growing use of AI agents is also introducing new security challenges.
AI agents are increasingly accessing business applications and systems to perform tasks on behalf of users and organisations. However, many existing access management systems were not designed to accommodate the scale and complexity of these non-human identities, creating additional vulnerabilities for businesses.
The report identified small businesses as particularly exposed to these risks, noting that many lack dedicated IAM solutions or rely on limited tools to manage access to their systems.
This leaves smaller organisations more vulnerable as AI agents become increasingly integrated into business operations, while larger companies are generally better equipped with dedicated identity management systems that are adapting to the growing risks associated with non-human identities.
Nick Maynard, vice-president of research at Juniper Research, said small businesses would need to strengthen how they manage access to digital systems as the use of AI agents expands.
“Small businesses must change the way they manage access to systems, or they will encounter significantly elevated risks as AI agents become increasingly widespread,” Maynard said.
He urged IAM providers to develop solutions that smaller businesses can deploy without requiring specialised technical expertise, adding that modular and scalable systems would position vendors to benefit from rising adoption among smaller enterprises.
The findings suggest that the growing deployment of AI is expanding the security responsibilities of identity management systems beyond verifying human users to monitoring and controlling access by automated systems and AI-powered agents.
