The rise of customer identity and access management (CIAM) is tied to changing customer habits and expectations. The pandemic accelerated the move from face-to-face interactions to new digital channels, with customers shopping, banking, receiving telehealth services and socializing online. Having digital channels that can be securely accessed from any device at any time shifted from "nice to have" to "must have" for many organizations. A solution dedicated to customer identity became a better option from a technology and value perspective than leveraging traditional identity and access management (IAM) solutions or building customer-focused functionality in-house.

Traditional identity and access management (IAM) solutions are used by organizations to protect access to resources for their employees. These solutions are not sufficient to meet the scale, performance and security requirements associated with customer identity.

Performance & Scalability

Large employers may have to store, manage and secure identities for hundreds of thousands of employees with their workforce IAM solutions. These workforce IAM solutions are not architected to handle the data of millions of customers and the demand spikes associated with events or sales that drive thousands or millions of customers to sign up or log on to an app in a short period of time. For example, e-commerce sites without CIAM solutions in place were probably not prepared for Cyber Monday traffic spikes from both new and existing customers, and opened themselves up to fraudulent activity while also missing out on legitimate sales.

Functionality

Traditional IAM solutions proved to not have key functionality required for a customer experience because the use cases are different. The customer use case includes account registration, privacy regulations, consistent multi-channel experiences and the ability to login from social media accounts.

Employees don't expect self-service registration to create their enterprise account, nor do they expect to use their Facebook/LinkedIn/Twitter account to login to their work applications.

Frictionless Security

While employees and customers both want a frictionless experience, their level of commitment to the organization is different. Customer loyalty vanishes quickly. PwC's  "Experience is everything" report found that 32% of customers will abandon a favorite brand after just one bad experience.

It is essential customer identity solutions are seamless and easy-to-use from registration throughout the customer journey to keep customers from switching to competitors.

Some organizations looked internally to build the necessary customer identity functionality for their first project, such as an app or a website. Building and maintaining an in-house solution was time consuming and resource intensive. It also relied on employee knowledge, which may have been lacking. Let's examine the options.

Build CIAM Solutions Internally

There were numerous problems with the DIY approach to CIAM.

• Limited scope. The in-house solution typically worked for one app and had difficulties meeting requirements of other apps.

   

• Lack of expertise. Brands and developers aren't CIAM or identity experts. On-ramping takes time and keeping up-to-date on identity trends, standards and best practices can be challenging when combined with day-to-day responsibilities.

   

• Incompatible solutions and security gaps. Development teams might end up building different solutions for each app, which leads to disconnected experiences and potential gaps in security.

Buy CIAM Solutions from Experts

Experts are able to create holistic CIAM solutions that work across your apps, APIs and websites along with partner apps, APIs and websites.

• Improved Customer Experience. Organizations that have customers interact with their own apps and websites along with those of their partners reduce friction with CIAM solutions. Single sign-on (SSO) allows customers to login with one set of credentials and access multiple apps or websites. The solution also allows for progressive profiling and streamlines account updates. When a customer updates their address or other information in one app, the shared customer profile in the directory updates the information for all the apps. For example, a bank customer who updates their address in a bank's app can order checks from a connected app without having to update their address on that app too.

• Fewer Password Resets for IT Help Desks. A study by Gartner revealed that over 50 percent of all help desk calls were due to password issues. Not only are password resets costly in terms of IT support personnel, customers may get frustrated, give up and switch to a competitor. CIAM provides self-service options for password issues. At the same time, single sign-on reduces the number of accounts and passwords the customer has to create and remember.

   

• Reduce Account Takeover (ATO) Fraud. Multi-factor authentication (MFA) requires customers to prove their identities using two or more authentication categories:

   

  • Knowledge - Something you know. This includes passwords, PINs, answers to security questions and other types of information that customers share with enterprises.

     

  • Possession - Something you have. A device in the customer's possession is sent a soft token, often a one-time password, generated by a transaction or an application. Alternatively, a customer may possess a hard token, like a USB-based device or separate code generator.

     

  • Biometric - Something you are. This is an inherited trait and confirmed with a scan, such as a fingerprint scan, facial recognition or a retinal scan. Biometrics require some sort of scanning device, like a smartphone.

     

If a fraudster is trying to use compromised credentials to access a customer's account, they will also need to provide proof from the Possession category and/or the Biometric category before being granted access, which is unlikely. Keeping fraudsters from taking over customer accounts reduces theft, customer frustration and brand reputation damage.

 

• Consumer Privacy and Regulatory Compliance. Data privacy policies and regulations require enterprises to have adequate solutions in place to ensure compliance and avoid penalties. CIAM helps enterprises comply with open banking requirements like the Payment Service Directive 2 (PSD2), and data privacy regulations like the General Data Protection Regulation (GDPR) and the California Consumer Protection Act (CCPA). When regulations are updated or new regulations are introduced, CIAM allows you to move quickly and stay in compliance.

Imagine a world where drag-and-drop replaces coding. That's where CIAM is headed.

Right now, securing digital identities is a challenge because legacy identity and authentication solutions were not designed for today's use cases. Most current identity and authentication solutions are a patchwork of software and API services that are overly complicated, insufficient and expensive.

The future of CIAM involves a no-code orchestration engine that allows organizations to rapidly create, test and optimize customer digital experiences across the entire identity lifecycle. The integration works with legacy and current systems. Designing automated workflows for different identity use cases like fraud detection, identity proofing, authentication and authorization just became easier.

To learn more about customer identity and access management, please read our Ultimate Guide to Customer IAM.