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CIAM 101

Customer Identity and Access Management (CIAM) helps you safeguard accounts and data from unauthorized access and build customer trust

The UN’s ITU agency estimates that 5.3 billion people, or 66% of the Earth’s population, used the Internet in 2022. Statista reports that by 2026 online sales are expected to account to close to one quarter of total global retail sales and generate $8.1 trillion, up from $5.2 trillion in 2021.

As online sales rise, so does the number of customer accounts that need protection from fraudsters and cyber criminals. According to Javelin Strategy’s 2022 Identity Fraud Study, in the US alone, identity fraud losses amounted to $24 billion and affected 15 million consumers in 2021.

Customer Identity and Access Management (CIAM) provides a way to safeguard accounts and data from unauthorized access by integrating authentication and authorization into your customer applications. It enables your company to securely capture and store customer identity data and control account access without creating additional customer friction.


CIAM vs IAM: What’s the Difference?

Your business may already use Identity Access Management (IAM) to control internal employee access to networks, applications, and resources. While CIAM extends some of the functionality of an IAM solution to managing access for external customers and partners, its characteristics and use cases differ.

Increased Efficiency vs. Better Experience
While the purpose of both IAM and CIAM is securing and controlling access, the focus of IAM is typically increasing operational efficiency for internal teams, while CIAM is focused on customer experience and revenue generation. A recent study from Qualtrics and ServiceNow found that 80% of customers have switched brands after a bad customer experience. CIAM can provide the right balance of security and ease of access to satisfy both your business and your customers.

As an internal system, you have full control over IAM: how users access the system, how often it’s updated, how to scale the system as employees join the company, and more. As a customer-facing system, CIAM needs to be more flexible. You still control the system, but it needs to be responsive to changing customer preferences and expectations that you can’t control.

For example, you can ask all employees to log in through a portal that they access on their computer using a single factor, but customers may want to access their account through different verified methods using your website, an app on their mobile phone, or their Google or Facebook access credentials.

CIAM also needs to be able to scale in unpredictable ways. Your products may be part of a trend, or have seasonal upticks, or marketing may be running a two-month campaign and your CIAM system has to be able to handle the changes in customer base.

Authorization requirements
Because IAM systems are used with a captive employee audience, their authorization capabilities typically include single sign-on (SSO), provisioning, app access control, directories, delegated administration, and multi-factor authentication (MFA).

In contrast, CIAM systems can require registration, identity verification, SSO, consent management, strong authentication, identity data, attribute directories, delegated authority, authorization workflows, and MFA.

Because it is customer-facing, CIAM falls under a wider range of regulations around privacy and consent management than IAM. These regulations typically differ by region and jurisdiction – such as the European Union’s GDPR, California’s CCPA, and New York’s SHIELD Act – and the CIAM system must be able to accommodate them based on the rules in effect where a customer is located.

For IAM, analytics reveals risks in terms of users with higher privileges than they need, dormant or orphaned accounts that could be used for malicious access, and user activities. CIAM analytics reveal risks, but also opportunities for improving experience, and they contribute to your company’s 360-degree view of the customer.


What Are the Core Features of a CIAM Solution?

CIAM solutions enable you to manage customer identities and protect their data without adding friction to the customer access process. There are several core features that enable this balance between security and experience.

Business growth means adding customers. But new customers may come one at a time or all in a rush in response to a campaign, trend, or other factors. No matter how new customers come, or how many there are, CIAM solutions need to scale seamlessly to accommodate them without decreasing security or exposing accounts or data to risk.

Security and Privacy
CIAM solutions provide end-to-end security for customers and their accounts. They enable you to manage authentication mechanisms, encrypt data, define information download restrictions, receive alerts when risky activities occur, and gain a granular view for detecting unusual user and administrator behavior.

These solutions also enable you to comply with wide-ranging governmental and industry-specific privacy regulations and your corporate privacy policies in how you capture and use customer data. Good stewardship of customer data helps you build trust and brand loyalty.

With CIAM solutions, you can adapt authentication to user preferences for a better experience. You can offer SSO, biometric authentication, one-time passcodes, sign-on using social media credentials, and email links. Multi-factor authentication that combines two or more of these methods can be used to protect highly sensitive data and accounts that require extra security.

CIAM solutions integrate customer data from CRM, CMS, CDP, and other systems into a unified customer view. This view can include purchase history, customer identities, trends, and other details that help you personalize and deliver a consistent customer experience across all the channels and applications a customer uses to interact with your business.


How CIAM Helps Your Business

The ability to balance security and customer experience provides benefits for businesses of all sizes and across industries. Whether you work with enterprises, consumers, citizens, financial clients, or patients, CIAM solutions can increase security, compliance, and satisfaction with your organization.

Reduce Fraud
CIAM solutions help you reduce fraud in two ways. First, CIAM enables strong security for account setup and access. Second, by creating a unified customer view, it helps you identify anomalies and unusual behavior that could indicate fraudulent activity.

Avoid Fines
The way businesses capture, protect, and use customer data can be highly regulated, depending on location and industry. Being out of compliance with these regulations can be costly. For example, Santander Bank in the UK was fined £108 million for failing to comply with anti-money laundering (AML) regulations, Meta was fined €405 million for Instagram GDPR violations in Ireland, and violations of U.S. HIPAA rules could result in penalties of $50,000 per incident.

Finding a CIAM solution that meets the unique needs of your organization and successfully implementing it can help you stay within regulatory compliance. You can avoid fines, headlines, and potential lost customers.

Meet Customers Where They Are
According to the UN’s ITU agency, 75% of the world’s population aged 10 and over owns a mobile phone. The Pew Research Center reported that 76% of U.S. adults say they buy things online using a smartphone. A study by the Influencer Marketing Factory found that 29% of respondents purchase items once a week using social media.

However customers want to engage with you – whether it’s to make a purchase, inquire about benefits, or book an appointment – CIAM lets you give them secure account access across any of the channels they choose.

Strengthen Customer Relationships
CIAM solutions help you strengthen the customer relationships that grow your business. It lets you find the right balance of ease-of-access and security.  Customers know you’re committed to protecting their accounts and data without increasing friction for them. The unified customer view it provides lets you offer a personalized experiences that makes them feel valued and understood, and increasing their loyalty to your organization.


How CIAM Protects Customers

Your customers trust you with their data. CIAM solutions let you choose the best way to protect that data, based on its value and the experience your customers want. Here’s how CIAM can help you balance security and access across the customer lifecycle.

When a customer or client establishes their account, a CIAM solution lets you establish the information they need to provide, verify their identity, and set up the credentials they’ll use for future logins. The flexibility of CIAM solutions means you can provide security while focusing on the customer experience. Registration can be smooth and easy and allow them to securely establish how they will log into their account for future access.

The login process should be simple and convenient, using the credentials the customer or client established at registration. This could be a password, already established credentials such as Facebook or Google accounts, or something stronger, like biometrics. Because they offer the least protection, passwords can be augmented with one-time codes or email links. Typical biometric login measures can include a smartphone face scan or a fingerprint reader in a computer key.

Extra Security
MFA takes security up a notch. Often thought of as protection for accounts that include sensitive information, like bank accounts and patient records, as hacking and data breaches abound, it can also make sense to secure customer data across a wide range of industries using MFA – preferably, with biometric MFA.

CIAM solutions let you easily establish which factors customers need to provide at registration and later use to access their accounts, balancing security and convenience.

As an industry leader in next-gen identity verification, biometric authentication, and digital onboarding, Daon understands your need for security and your customers’ desire for a smooth experience. To see how we can help you deliver on both, learn more about our CIAM Solutions.